But Low Fuel Prices Lead To Small Improvement On AMEX
Index
It was a long
November for most of the nation's airlines... as passengers flew
away from the prospect of flying on commercial airliners, even over
the traditionally packed Thanksgiving holiday weekend.
As ANN reported, Southwest saw its average
load factor plummet to just 63.2 percent, down 6.1 from November
2007 numbers. Marketwatch reports other airlines saw even worse
numbers, with cross-town rival American Airlines' traffic falling
14.5 percent in November over 2007 numbers, with a 4.6 percent drop
in load factor.
The Fort Worth-based carrier's American Eagle regional
subsidiary fared even worse... with a 21.5 percent drop in traffic,
and a paltry 67.3 percent load factor. While all airlines rely on
packed seats and healthy passenger revenue, regional airlines are
particularly susceptible to poor performance in those categories,
given the high operating costs of regional jets and the limited
number of seats available.
Continental Airlines reported its November 2008 traffic fell
10.5 percent over 2007 levels, outpacing the airline's 7.3 percent
cut in capacity and in available seat miles. Its load factor
dropped nearly 3 percent compared with November 2007, to 77.3
percent... while RASM dropped as much as 2 percent.
Things were slightly better in Tempe, AZ, home to US Airways.
The carrier reported a 6.9 percent drop in revenue passenger miles,
while its load factor only fell 0.7 percent. The airline also
posted a disquieting 3-5 percent drop in passenger revenue per seat
mile, even though the carrier charges for nearly all on-board
amenities.
Still, those numbers -- the best among a bad bunch -- actually
resulted in a 2.8 percent bump to the airline's share price
Wednesday. "Our November unit revenue was impacted by the
deteriorating macroeconomic environment," said US Airways president
Scott Kirby. "We continue to believe, however, that the impact of
lower fuel cost will more than offset the decline in demand that we
are currently anticipating."
Despite the poor performance numbers, there's reason for
airlines and investors to be optimistic. Stock prices on the AMEX
Airline Index rose 1.7 percent Wednesday, buoyed by the belief fuel
prices will stay at current levels at least through the end of the
year.
The overall index is still down 61 percent over the past year,
however... meaning there's a lot of ground to make up.