April numbers are in - down 3.5%

[WorldTraveler]

UA reported its traffic results for April on Friday afternoon while AA reported this morning, completing reporting for the big 4 for April.

http://finance.yahoo.com/news/united-reports-april-2015-operational-210000220.html

http://finance.yahoo.com/news/american-airlines-group-reports-april-120000827.html

Neither AA or UA report monthly RASM but AA affirmed its RASM guidance FOR THE QUARTER of an expected decrease of 4-6%

UA's domestic mainline RPMs were up 1% on 2.3% more capacity, very similar to AA mainline. UA regional traffic (almost entirely domestic) was down 3.9% on 2.5% less capacity while AA was up 6.4% on 4.2% more capacity.

UA intl traffic was flat driven by 7.5% less TATL traffic and 12% more Latin traffic while AA's int'l traffic was down 5.7% driven by an 8% reduction in Latin capacity and a 2% reductions in TATL capacity.

AA noted that higher fuel prices will increase its fuel cost by approx. 10 cents for the quarter resulting in a 17-19% pre-tax excluding specials while DL and UA did not provide any update on fuel or margin.

 

[700UW]

And there was a 1.5% gain in Domestic and 40.5% gain in the Pacific.

 

[FWAAA]

The ominous news for AA is the confirmation that PRASM is expected to decline by 5% year over year. That's a huge decline, especially when the economy isn't officially in the toilet. That's a bigger dropoff than predicted at UA or DL.

Traffic-wise, AA is in slow-shrinking mode. Revenue-wise, AA is in fall-off-the-cliff mode. Revenue falling like that when costs are increasing (primarily labor) isn't good news.

AA's fuel holiday (compared to UA and DL, which won't capture all the savings of the lower prices due to their hedging losses) is temporary, and before Parker knows it, UA and DL will have roughly the same fuel costs as AA.

Wonder if Dougie-Brand Dog Food (in First Class as of 9/1/14) has anything to do with the incredible shrinking unit revenues? By now, people have had plenty of opportunities to try the Hector Garbage for breakfast, lunch and dinner, and maybe some of them haven't returned?

 

[jimntx]

This decrease in PRASM must be due to an increase in seats available and a decrease in ticket prices.  If my flights are any indication, AA is having NO problem filling seats with revenue passengers.  I had a flight last week that had 55 non-revs on the standby list for 3 available seats on an MD-80 (140 total seats).  They had all rolled over from previous flights.  I think we managed to get 5 of them onboard.

 

[WorldTraveler]

and yes, 700, domestic has been strong for all carriers.

It doesn't offset int'l weakness - specifically for AA in Latin America. Since Latin America is AA's largest int'l revenue region, the impact will be felt more than what other carriers are reporting for weakness in other regions - which are not being impacted as much.

and AA and UA are actually forecasting similar RASM declines.

and the primary reason is likely that AA and UA have higher foreign point of sale than DL on their int'l networks and are thus more susceptible to a stronger dollar.

The biggest difference in total between the traffic reports is that AA is more aggressively growing its regional operations than other carriers.

Also, AA had a 5% or larger traffic (RPM) decline in both the Atlantic and Latin America, UA had it only on the Atlantic, and DL had no int'l region with a 5% or larger RPM decline, although DL's regional operations were down by 5.2% on 6% less capacity while DL mainline capacity was up as DL shifts capacity from regional to mainline aircraft.

and I presume you fly domestically, Jim, and an 85% LF in April is high but all of the airlines have figured out how to push those kinds of LFs.

AA's domestic LF is actually down almost a point year to date