"U.S. Airlines Look for Fall Rebound"

Wednesday, October 4, 2006

Airlines Look for Fall Rebound 
By Ted Reed
TheStreet.com

 
Several airlines are reporting lower traffic tallies for September, partly
because of stepped-up security measures in recent weeks, but some said
they're hopeful that their autumn results will improve.
 
US Airways said Wednesday that consolidated passenger revenue per available
seat mile grew at a relatively slow rate of "more than 5%" last month. 

"We continued to experience some softening of close-in bookings due
partially to increased security procedures," said President Scott Kirby, in
a prepared statement. "We are hopeful that the recently altered procedures,
which allow for limited carry-on liquids, will largely reverse that trend." 

At the airline's biggest unit, US Airways, mainline traffic, as measured by
revenue passenger miles, declined by 0.6%, even as capacity rose 0.4%. At
the America West unit, revenue passenger miles declined by 7.1%, and
capacity fell 5.4%. 

AirTran Airways said revenue passenger miles grew by 11.6%, while capacity
rose 28.6% in September. Load factor fell to 61.8%, down sharply from 71.2%
for the same period a year earlier. 

Recently, the airline had warned that increased capacity in the East,
combined with security concerns, was pressuring its performance. 

"Clearly our September results reflect softer demand," said Kevin Healy,
vice president of planning, in a prepared statement. Healy said that last
year's strong load factors were driven by bankrupt competitors' capacity
reductions, and that this year's load factor is more in line with historic
September ranges of 58% to 63%. 

"The growth in total passengers continues to set records and supports the
underlying trend for a return to normal traffic levels in November and
December," Healy said.
 
UAL's United Airlines said September revenue passenger miles rose 1.3%, with
capacity increasing 2.3%. United's passenger load was 79.5%, a decline of
0.7 points. 

Following the results, the American Stock Exchange Airlines Index was up
1.1%. US Airways, however, fell 20 cents to $47.46, and AirTran traded at
$10.30, down 8 cents. UAL added 35 cents to $29.75. 

Meanwhile, Delta Air Lines reported an improvement for last month. Delta
said its load factor was 74.6%, up 1.5 points from the same period a year
earlier. Delta's September revenue passenger miles fell 3.4%, while capacity
fell 5.4%. 

Also Wednesday, the Bureau of Transportation Statistics reported that U.S.
airline traffic slowed considerably on Aug. 10, the day that new security
procedures were implemented following the disclosure of a foiled plot to
blow up airlines flying trans-Atlantic routes. 

The agency said that only 46% of flights arrived on time that day, compared
with an average August on-time arrival rate of 76%.

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