Saabslime
Dysfunctional family
- Joined
- Dec 3, 2001
- Posts
- 509
AmWest enjoys robust March
By John Yantis, Tribune
America West Airlines is enjoying its best March, and the Tempe carrier anticipates it will have a surprisingly better second quarter despite higher fuel costs, CEO Doug Parker said Wednesday at a transportation conference in New York.
It was bullish day for the the East Valley’s two commercial air carriers as east Phoenix-based Mesa Air calmed investor fears at the conference by saying it can weather the storm should its second-largest partner, US Airways, shut down.
Thanks is part to a record-breaking day Sunday, America West CEO Doug Parker said the airline’s momentum this month will help shrug off a rough year in 2004.
"When all of March revenues are in, March will the highest RASM month in the history of America West Airlines, which we’re reasonably sure you’re not going to hear from anybody else," Parker told an audience of investors at the annual Goldman Sachs Transportation Conference. "The prior record was June of 2000, so the peak of the peak of the airline business."
RASM is the industry term for revenue per available seat per mile flown. Many airlines refer to it as unit revenue. The figure represents how much a carrier made spread across all the seats that were available.
Parker said full planes and decent yields on fares in March will result in a higher year-over-year RASM that is "comfortably into the double digits."
"The revenue environment is much, much stronger for us and we feel very good about that," he said.
Parker said April and May revenue did not appear as strong as March, but he still expects "solid single digits" compared to last year during the same time.
Thanks in part to falling oil prices, America West stock was up nearly 5 percent on the news Wednesday to $5.03 a share on the New York Stock Exchange. Parker said the biggest driver for increasing revenue was to skip the fare sales of many of his competitors.
"We decided a number of months ago that the industry was pricing the peaks well below where they should be priced," he said. "It’s a big risk in our business, but it was our view that we were headed into a peak period and it didn’t make sense to sell peak inventory at those fare levels."
At the same conference, Mesa Air Group’s chief financial officer Peter Murnane said the company has contingency plans should US Airways, in the midst of its second bankruptcy, liquidate. One scenario might involve investing in the airline to keep it afloat.
"We have said for quite some time now said that we would do whatever we could to be helpful to US Airways," Murnane said. "Clearly that is something we would consider under the right framework."
Mesa flies 73 regional jets and turboprops for US Air Express. About 35 percent of Mesa’s revenue come from US Air. Only America West is a larger partner.
Mesa has about $180 million in fixed costs associated with US Airways, Murnane said, but the number could be halved with deferrals on aircraft rent, something that he said financiers appear willing to do. In the event of a shutdown, Murnane said Mesa could redeploy the aircraft by using them to fly for existing or new partners.
Contact John Yantis by email, or phone (480) 898-2345
advertisement
By John Yantis, Tribune
America West Airlines is enjoying its best March, and the Tempe carrier anticipates it will have a surprisingly better second quarter despite higher fuel costs, CEO Doug Parker said Wednesday at a transportation conference in New York.
It was bullish day for the the East Valley’s two commercial air carriers as east Phoenix-based Mesa Air calmed investor fears at the conference by saying it can weather the storm should its second-largest partner, US Airways, shut down.
Thanks is part to a record-breaking day Sunday, America West CEO Doug Parker said the airline’s momentum this month will help shrug off a rough year in 2004.
"When all of March revenues are in, March will the highest RASM month in the history of America West Airlines, which we’re reasonably sure you’re not going to hear from anybody else," Parker told an audience of investors at the annual Goldman Sachs Transportation Conference. "The prior record was June of 2000, so the peak of the peak of the airline business."
RASM is the industry term for revenue per available seat per mile flown. Many airlines refer to it as unit revenue. The figure represents how much a carrier made spread across all the seats that were available.
Parker said full planes and decent yields on fares in March will result in a higher year-over-year RASM that is "comfortably into the double digits."
"The revenue environment is much, much stronger for us and we feel very good about that," he said.
Parker said April and May revenue did not appear as strong as March, but he still expects "solid single digits" compared to last year during the same time.
Thanks in part to falling oil prices, America West stock was up nearly 5 percent on the news Wednesday to $5.03 a share on the New York Stock Exchange. Parker said the biggest driver for increasing revenue was to skip the fare sales of many of his competitors.
"We decided a number of months ago that the industry was pricing the peaks well below where they should be priced," he said. "It’s a big risk in our business, but it was our view that we were headed into a peak period and it didn’t make sense to sell peak inventory at those fare levels."
At the same conference, Mesa Air Group’s chief financial officer Peter Murnane said the company has contingency plans should US Airways, in the midst of its second bankruptcy, liquidate. One scenario might involve investing in the airline to keep it afloat.
"We have said for quite some time now said that we would do whatever we could to be helpful to US Airways," Murnane said. "Clearly that is something we would consider under the right framework."
Mesa flies 73 regional jets and turboprops for US Air Express. About 35 percent of Mesa’s revenue come from US Air. Only America West is a larger partner.
Mesa has about $180 million in fixed costs associated with US Airways, Murnane said, but the number could be halved with deferrals on aircraft rent, something that he said financiers appear willing to do. In the event of a shutdown, Murnane said Mesa could redeploy the aircraft by using them to fly for existing or new partners.
Contact John Yantis by email, or phone (480) 898-2345
advertisement
