General Lee
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This is for you MEDflyer, ENJOY!
Airline revenue ascends
Industry edges past estimates despite lower business fares
11:23 PM CST on Wednesday, February 23, 2005
By ERIC TORBENSON / The Dallas Morning News
Airline industry revenue slightly edged Wall Street's expectations in January, in yet another sign that lower business fares may not be as harmful to carriers as some feared.
Revenue earned for each seat mile flown rose 1.6 percent compared with January 2004, the Air Transport Association reported.
Analysts had expected revenue to be flat or slightly above the year-earlier levels.
"Perhaps mimicking the domestic pricing philosophy of low-cost carriers and improving the value proposition of business travel though reasonable fares isn't as stupid as recently suggested by one airline management," said Jamie Baker of J.P. Morgan Chase in a research note Wednesday.
Mr. Baker was referring to remarks from Continental Airlines Inc. executives last week, criticizing Delta Air Lines Inc. for slashing many of its most profitable fares in a bid to drive up traffic.
Carriers including American Airlines Inc. matched Delta's move in most major business markets, leading many executives and analysts to fear that several billion dollars of ticket revenue would evaporate this year.
The bad news was that average fares domestically dropped 6.8 percent over last year as fierce competition continued to drive prices down.
Despite record traffic for many airlines, higher fuel prices and lower fares mean all those full planes are continuing to fly at a loss.
"While the industry has moved aggressively to cut costs, skyrocketing fuel prices have offset that progress," said Gary Chase of Lehman Bros. in a note to investors.
The industry's capacity fell about 2.2 percent in the month compared with 2004, which helped results, he said, though that will shift in the other direction as airlines add flights.
Shares of American parent AMR Corp. rose 8 cents to $8.80. Southwest Airlines Co. shares were up 30 cents to $14.09. Continental gained 24 cents to $10.26.
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Tuesday, February 22, 2005
Delta earns airport rebate
Spike in traffic is attributed to SimpliFares
By James Pilcher Enquirer staff writer
HEBRON - Delta Air Lines might have expected to see revenues drop initially from its recent fare restructuring, but the Atlanta-based carrier is getting a bonus from its SimpliFares program.
The Kenton County Airport Board reported Monday that for the first time since 2000, it will refund airlines some fees that it charges, giving back $4.4 million - with most of that to go to Delta and Erlanger-based regional subsidiary Comair.
"Thank God for SimpliFares," Robert Holscher, aviation director of Cincinnati/Northern Kentucky International Airport, said during the board's finance committee meeting. "It certainly has been a big boost for us."
Also Monday, airport officials told the board that they were beginning the process of extending the passenger-facilities charge collected on every local ticket to pay for major construction projects.
Scheduled to expire in July 2008, the $4.50-a-ticket charge would stay in effect through 2008. Pending federal approval, it then would be replaced by a $3-a-ticket charge through October 2010.
Airport officials say they need the extra money, totaling about $60 million, to cover higher-than-anticipated land costs from an ongoing $236 million runway project, as well as other anticipated construction needs.
As for the rebate, airport officials say lower fares that Delta introduced locally in August have led to a large spike in local traffic. That, in turn, has pushed parking and concessions revenue above projections.
Delta and Comair operate more than 92 percent of the flights at the airport, Delta's second-largest hub. The two airlines will get a corresponding share of the rebate.
The payments will be in the form of discounts off 2005's monthly landing fee bills.
Delta officials had said they anticipated the fare price cuts to lower revenues initially.
Airport finance director Sheila Hammons said parking revenues were up 15.4 percent in 2004 compared with 2003, caused by the jump in local traffic.
Concessions - including parking, rents and percentages of food and shopping sales - were up $2.3 million.
Last week, Delta executives said that since it launched SimpliFares in Cincinnati, local traffic was up 25 percent over last year. The airline broadened the program to the rest of its domestic system last month.
"SimpliFares has been a catalyst for a long-standing appetite here in this region," airport board chairman William T. Robinson III said.
E-mail [email protected]
Bye Bye--General Lee
Airline revenue ascends
Industry edges past estimates despite lower business fares
11:23 PM CST on Wednesday, February 23, 2005
By ERIC TORBENSON / The Dallas Morning News
Airline industry revenue slightly edged Wall Street's expectations in January, in yet another sign that lower business fares may not be as harmful to carriers as some feared.
Revenue earned for each seat mile flown rose 1.6 percent compared with January 2004, the Air Transport Association reported.
Analysts had expected revenue to be flat or slightly above the year-earlier levels.
"Perhaps mimicking the domestic pricing philosophy of low-cost carriers and improving the value proposition of business travel though reasonable fares isn't as stupid as recently suggested by one airline management," said Jamie Baker of J.P. Morgan Chase in a research note Wednesday.
Mr. Baker was referring to remarks from Continental Airlines Inc. executives last week, criticizing Delta Air Lines Inc. for slashing many of its most profitable fares in a bid to drive up traffic.
Carriers including American Airlines Inc. matched Delta's move in most major business markets, leading many executives and analysts to fear that several billion dollars of ticket revenue would evaporate this year.
The bad news was that average fares domestically dropped 6.8 percent over last year as fierce competition continued to drive prices down.
Despite record traffic for many airlines, higher fuel prices and lower fares mean all those full planes are continuing to fly at a loss.
"While the industry has moved aggressively to cut costs, skyrocketing fuel prices have offset that progress," said Gary Chase of Lehman Bros. in a note to investors.
The industry's capacity fell about 2.2 percent in the month compared with 2004, which helped results, he said, though that will shift in the other direction as airlines add flights.
Shares of American parent AMR Corp. rose 8 cents to $8.80. Southwest Airlines Co. shares were up 30 cents to $14.09. Continental gained 24 cents to $10.26.
E-mail [email protected]
Tuesday, February 22, 2005
Delta earns airport rebate
Spike in traffic is attributed to SimpliFares
By James Pilcher Enquirer staff writer
HEBRON - Delta Air Lines might have expected to see revenues drop initially from its recent fare restructuring, but the Atlanta-based carrier is getting a bonus from its SimpliFares program.
The Kenton County Airport Board reported Monday that for the first time since 2000, it will refund airlines some fees that it charges, giving back $4.4 million - with most of that to go to Delta and Erlanger-based regional subsidiary Comair.
"Thank God for SimpliFares," Robert Holscher, aviation director of Cincinnati/Northern Kentucky International Airport, said during the board's finance committee meeting. "It certainly has been a big boost for us."
Also Monday, airport officials told the board that they were beginning the process of extending the passenger-facilities charge collected on every local ticket to pay for major construction projects.
Scheduled to expire in July 2008, the $4.50-a-ticket charge would stay in effect through 2008. Pending federal approval, it then would be replaced by a $3-a-ticket charge through October 2010.
Airport officials say they need the extra money, totaling about $60 million, to cover higher-than-anticipated land costs from an ongoing $236 million runway project, as well as other anticipated construction needs.
As for the rebate, airport officials say lower fares that Delta introduced locally in August have led to a large spike in local traffic. That, in turn, has pushed parking and concessions revenue above projections.
Delta and Comair operate more than 92 percent of the flights at the airport, Delta's second-largest hub. The two airlines will get a corresponding share of the rebate.
The payments will be in the form of discounts off 2005's monthly landing fee bills.
Delta officials had said they anticipated the fare price cuts to lower revenues initially.
Airport finance director Sheila Hammons said parking revenues were up 15.4 percent in 2004 compared with 2003, caused by the jump in local traffic.
Concessions - including parking, rents and percentages of food and shopping sales - were up $2.3 million.
Last week, Delta executives said that since it launched SimpliFares in Cincinnati, local traffic was up 25 percent over last year. The airline broadened the program to the rest of its domestic system last month.
"SimpliFares has been a catalyst for a long-standing appetite here in this region," airport board chairman William T. Robinson III said.
E-mail [email protected]
Bye Bye--General Lee
