Scheduled system seat capacity for the May-Aug four-month period shows seats +4.4% y/y, down 16bp w/w. Domestic seat growth was down 14bp w/w to +4.5% y/y on cuts by almost all carriers we track. Pacific capacity was flat w/w at +0.2% y/y, transatlantic was flat w/w at +5.7% y/y, and Latin was down 49bp w/w to +3.7% y/y. Int’l capacity growth was down 29bp w/w to +3.9% y/y. Domestic competitive capacity came down 25bp w/w to +4.2% y/y. All in, MAX-related cancelations drove 37% of the gross domestic capacity reductions. Excluding all MAX-related cancelations, this summer’s domestic capacity growth rate would have ticked up by 6bp w/w due to offsetting adds elsewhere.
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1-10 out of 713 Posted on April 5, 2019
Filed under: Hunter Keay, Airlines, AAL, ALGT, ALK, CPA, DAL, Friday Flyer, HA, JBLU, LUV, SAVE, UAL, WJA
We survey investors quarterly to quantify sentiment and views on key topics. This quarter we had 92 replies. Thanks for replying, if you did. For context, about half of the survey answers were submitted before DAL’s investor update on Tuesday morning. We delineate the before/after replies where it matters. This survey had some atypically polarized and useful results.
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Posted on April 1, 2019
Scheduled system seat capacity for the May-Aug four-month period shows seats +4.6% y/y, flat w/w. Domestic seat growth was flat w/w at +4.7% y/y as reductions by DAL and HA were slightly offset by adds from SAVE and ALGT. Pacific capacity was flat w/w at +0.2% y/y, transatlantic was flat w/w at +5.7% y/y, and Latin was down 35bp w/w to +4.2% y/y. Int’l capacity growth as a whole was down 22bp w/w to +4.2% y/y. Domestic competitive capacity was also flat w/w and still showing a growth rate of +4.4% y/y for the period.
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Posted on March 29, 2019
Our quarterly review of competitive seat growth by airline shows, in aggregate, an uptick in competitive capacity (CC) growth to +2.8% y/y in 2Q19, from +2.5% y/y in 1Q19. Though U.S. airline industry capacity growth is high at +4.3% y/y in 2Q19 (on a seat basis), the +2.8% y/y CC growth rate in 2Q19 is still pretty modest relative to that overall growth rate. Note on CC data: we (and others) focus on this metric but it is flawed as it won’t capture competition on connecting itineraries, which is a growing source of RASM and earnings. Changes in direct CC overlap is certainly important, but it isn’t an all-encompassing view.
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Posted on March 25, 2019
Scheduled system seat capacity for the May-Aug four-month period shows seats +4.6% y/y, flat w/w. Domestic seat growth came up 2bp w/w to +4.7% y/y from +4.6% y/y due to rounding as additions by LUV and AAL were slightly offset by cuts from UAL. Pacific capacity was flat w/w at +0.2% y/y (technically down 7bp), transatlantic was flat w/w at +5.7% y/y, and Latin was flat w/w at +4.6% y/y (technically down 2bp w/w). Int’l capacity growth as a whole was flat w/w at +4.4% y/y (technically down 2bp w/w). Domestic competitive capacity was flat w/w at +4.4% y/y (technically up 3bp w/w).
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Posted on March 22, 2019
Filed under: Hunter Keay, Airlines, AAL, ALGT, ALK, CPA, DAL, Friday Flyer, HA, JBLU, LUV, SAVE, UAL, WJA
Entering quarter end, we’re seeing lines being drawn (and positions being built) on how airlines will report/guide/sound with investor updates and earnings. Some are clearly out of favor with high short interest and relative underperformance (HA) and some are being shunned (ALK) with low short interest and stock underperformance. But only one has high short interest and has relative outperformance to the group – DAL – which may mean it’s set up for a ‘coiled spring’ result, one way or the other, with March traffic likely on 4/2. This mix of outperformance on high short interest isn’t terribly unique in airlines, but when it happens it creates winners and losers.
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Posted on March 18, 2019
Scheduled system seat capacity for the May-Aug four-month period shows seats +4.6% y/y, flat w/w (technically up 3bp w/w). Domestic seat growth was flat w/w at +4.6% y/y (technically up 4bp w/w) as cuts by UAL and HA were offset by additions from SAVE and DAL. Pacific capacity was flat w/w at +0.2% y/y, transatlantic was flat w/w at +5.7% y/y, and Latin was flat w/w at +4.6% y/y (technically down 4bp w/w). Int’l capacity growth as a whole was flat w/w at +4.4% y/y. Domestic competitive capacity came up 9bp w/w to +4.4% y/y.
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Posted on March 15, 2019
Filed under: Hunter Keay, Airlines, AAL, ALGT, ALK, CPA, DAL, Friday Flyer, HA, JBLU, LUV, SAVE, UAL, WJA
On 4/10/19 we expect JBLU to announce its intention to serve Europe, an initiative management has teased in internal employee memos obtained by the media. We have no clue what they’ll say that day, but we make our best guess here and try to quantify the impact ahead of time.
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Posted on March 14, 2019
Some have suggested the grounding of the 737 MAX fleet in the U.S. will be accretive to earnings due to lower capacity. Does that feel right? Higher fuel prices make airlines scale back growth in their least profitable markets in a gradual and orderly fashion while pushing fares higher. A sudden grounding of a 737 MAX merely causes disruption to the schedule, annoyances to passengers, bad press, higher costs to the airline, and brand damage. Airlines won’t be raising fares on this. If anything, this feels like a winter storm, and investors don’t capitalize temporary bumps to RASM caused by uncontrollable events. If you as an investor want to be bullish on airlines, go ahead – just don’t do it because of this.
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Posted on March 11, 2019
Scheduled system seat capacity for the May-Aug four-month period shows seats +4.6% y/y, down 16bp w/w. Domestic seat growth fell 19bp w/w to +4.6% y/y from cuts mainly by UAL, AAL, DAL, slightly offset by additions from LUV (Hawaii) and ALGT. Pacific capacity was flat w/w at +0.2% y/y, transatlantic was flat w/w at +5.7% y/y, and Latin came up 11bp w/w to +4.6% y/y. Int’l capacity growth as a whole was flat w/w at +4.4% y/y. Domestic competitive capacity fell 24bp w/w to +4.3% y/y.
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