The airlines can’t catch a break. Back when the economy was strong, insanely high oil prices kept them from turning a steady profit. And now oil’s low again, but the economy isn’t cooperating.
Consolidated load factor was down 2.8 points to 77.3%, while mainline posted a load factor down 2.6 points to 77.8%.
On a consolidated basis, traffic was down 10.5% while capacity declined only 7.3%.
But here’s the nasty news. Consolidated passenger revenue per available seat mile is estimated to have increased only between 1% and 2% compared to November 2007. while mainline passenger RASM was up between 2% and 3%.
To put these numbers in perspective, last month the airline posted a consolidated RASM figure that was up 9.5% over October 2007, while mainline passenger RASM was up 10.4% year-over-year.
In addition, these estimates are also below recent analysts’ estimates, and the airline’s own recently revised guidance, which had the airline posting RASM increases of between 4% and 6%.
For those of you who don’t follow the sector that closely, the RASM numbers that Continental reports are looked upon as an indicator for the rest of the industry. Sometimes the airline can be a bit above or below the rest of the pack for various reasons, but most of us airline financial types still use their “first out of the box” look at RASM as a kind of indicator as to what’s on the horizon.
We’re not surprised that November marked a severe downturn, and the market has seen this coming for a while.
Meanwhile, the airlines’ woes are spreading. Word is that both Northwest and Delta (DAL) are looking to modify existing orders with Boeing (BA), and they’re probably not the only ones. Boeing, which is one of the genuine true bright spots for American manufcturing, has lost 57% of its market cap this year.
Anyway, look in the bright spot. Remember last year, everyone was freaking out about an civil aviation sector that was busting at the seems with outrageous stories of planes stuck on the tarmac. We’re not hearing much of those anymore, are we?
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