FlyBoeingJets
YES, that's NICE
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- Mar 20, 2003
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The last paragraph talks about the growth in '04
CORRECTED - Airline revenue per U.S. seat lagged in February-ATA
Monday March 22, 12:04 pm ET
In NEW YORK story headlined "Airline revenue per U.S. seat lagged in February," please read name as "Michael Linenberg" (corrects spelling throughout).
A corrected repetition follows.
NEW YORK, March 22 (Reuters) - While international air travel is coming back with strength, vacation and business travel within the United States remains miles away from a robust recovery, according to the latest set of industry figures.
Stocks of most major U.S. airlines fell as the Air Transport Association, an industry trade group, released its monthly report on revenue for each available airplane seat to members and Wall Street firms on Monday.
According to Wall Street firms, the group said international revenue per seat rose 9.1 percent in February, while domestic revenue climbed only 0.7 percent.
In a research note, Lehman Brothers analyst Gary Chase blamed capacity growth for the low domestic numbers. "The simple culprit is too much capacity growth ... It is entirely unsurprising that Northwest (most disciplined on the capacity front) is experiencing the best revenue trends."
Combined domestic and international revenue increased 2.8 percent per seat. The figure is closely watched for trends of improvement or decline.
As the travel industry claws its way out of the slump that followed the attacks of Sept. 11, 2001, increased competition among airlines has pushed ticket prices down, and carriers have also been hurt by rising jet fuel costs.
"As most carriers are only modestly hedged against rising fuel prices, the impact of higher fuel prices to the industry's bottom-line is material," Merrill Lynch analyst Michael Linenberg wrote in a research note.
Linenberg cut his 2004 industry earnings forecast to a pretax loss of $2.2 billion, from his previous estimate of a loss of $600 million, citing increased fuel prices.
UBS analyst Sam Buttrick also lowered his industry forecast last week.
Following the ATA report, most airline shares dropped in morning trading. AMR Corp. (NYSE:AMR - News), parent of American Airlines, shares were down $1.03 at $10.35, Continental Airlines (NYSE:CAL - News) shares were down 63 cents at $10.99, and Delta Air Lines (NYSE
AL - News) shares were down 21 cents, at $7.25. AirTran (NYSE:AAI - News) shares were off 72 cents at $10.47 and JetBlue (NasdaqNM:JBLU - News) shares were off 85 cents at $20.50.
"We think that the bulk of concerns are already reflected in current share prices," Linenberg wrote.
Analysts expect 2004 to be a tough year as airlines continue to fight for passengers by increasing seats. Analysts expect low-cost carriers to expand capacity by more than 10 percent this year, and regionals to expand by 24 percent. "Capacity ramp along with much tougher (comparisons) this summer troubles us," Chase said.
CORRECTED - Airline revenue per U.S. seat lagged in February-ATA
Monday March 22, 12:04 pm ET
In NEW YORK story headlined "Airline revenue per U.S. seat lagged in February," please read name as "Michael Linenberg" (corrects spelling throughout).
A corrected repetition follows.
NEW YORK, March 22 (Reuters) - While international air travel is coming back with strength, vacation and business travel within the United States remains miles away from a robust recovery, according to the latest set of industry figures.
Stocks of most major U.S. airlines fell as the Air Transport Association, an industry trade group, released its monthly report on revenue for each available airplane seat to members and Wall Street firms on Monday.
According to Wall Street firms, the group said international revenue per seat rose 9.1 percent in February, while domestic revenue climbed only 0.7 percent.
In a research note, Lehman Brothers analyst Gary Chase blamed capacity growth for the low domestic numbers. "The simple culprit is too much capacity growth ... It is entirely unsurprising that Northwest (most disciplined on the capacity front) is experiencing the best revenue trends."
Combined domestic and international revenue increased 2.8 percent per seat. The figure is closely watched for trends of improvement or decline.
As the travel industry claws its way out of the slump that followed the attacks of Sept. 11, 2001, increased competition among airlines has pushed ticket prices down, and carriers have also been hurt by rising jet fuel costs.
"As most carriers are only modestly hedged against rising fuel prices, the impact of higher fuel prices to the industry's bottom-line is material," Merrill Lynch analyst Michael Linenberg wrote in a research note.
Linenberg cut his 2004 industry earnings forecast to a pretax loss of $2.2 billion, from his previous estimate of a loss of $600 million, citing increased fuel prices.
UBS analyst Sam Buttrick also lowered his industry forecast last week.
Following the ATA report, most airline shares dropped in morning trading. AMR Corp. (NYSE:AMR - News), parent of American Airlines, shares were down $1.03 at $10.35, Continental Airlines (NYSE:CAL - News) shares were down 63 cents at $10.99, and Delta Air Lines (NYSE
AL - News) shares were down 21 cents, at $7.25. AirTran (NYSE:AAI - News) shares were off 72 cents at $10.47 and JetBlue (NasdaqNM:JBLU - News) shares were off 85 cents at $20.50."We think that the bulk of concerns are already reflected in current share prices," Linenberg wrote.
Analysts expect 2004 to be a tough year as airlines continue to fight for passengers by increasing seats. Analysts expect low-cost carriers to expand capacity by more than 10 percent this year, and regionals to expand by 24 percent. "Capacity ramp along with much tougher (comparisons) this summer troubles us," Chase said.
