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Internet Travel Monitor - Industry News
January 30, 2008
Airlines Blame Fuel Prices for Losses But See Solid Demand
MCLEAN, VA – High fuel prices sent Northwest, JetBlue and AirTran airlines to fourth-quarter losses, but upbeat outlooks Tuesday from top executives helped calm fears that travel demand may be slowing.
Northwest CEO Doug Steenland told analysts during a conference call Tuesday that the carrier's advance bookings remain strong. "If anything, we're seeing demand a little stronger than we expected."
JetBlue said its unit revenue — the average amount collected for each mile an airline seat is flown — should rise 10% to 12% in the first quarter over the same period in 2007. CEO Dave Barger said that while "soaring fuel prices contributed to our fourth-quarter loss, we believe we are well-positioned as we move into 2008."
AirTran, which saw its fourth-quarter 2007 unit revenue rise 9.4%, said it, too, is experiencing strong advance demand.
The new reports of relatively strong travel demand amid evidence elsewhere of an economic downturn echo recent comments from other large carriers, including American, United, Delta, Continental, US Airways and Southwest. Southwest CEO Gary Kelly, however, noted that air travel demand typically is a trailing indicator of an economic slowdown.
Shares of JetBlue, whose executives were most bullish about its near-term prospects, shot up 20.2% in Tuesday trading, closing at $5.94. Northwest shares gained 3.6% to close at $18.59. AirTran stock rose 4.5% to $8.84. The Amex Airline index, a broad measure of airline stocks, rose 1.7%.
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Northwest. The USA's No. 5 carrier in passenger miles flown lost $8 million, or 3 cents a share, in the fourth quarter. That beat the 8-cents-a-share loss analysts had anticipated. A year earlier, bankruptcy-related charges took the carrier to a $267 million quarterly loss. For all of 2007, Northwest earned $2.1 billion, or $764 million excluding bankruptcy items. The carrier emerged from Chapter 11 bankruptcy on May 31.
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JetBlue. The New York-based discounter lost $4 million, or 2 cents a share, in the fourth quarter, vs. a $17 million profit in the fourth quarter of 2006. The results beat analysts' expectations of a 5-cents-a-share loss. JetBlue earned $18 million, or 10 cents a share, for all of 2007, vs. a $1 million loss the previous year.
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AirTran. A fourth-quarter loss of $2.2 million, or 2 cents a share, was a bit larger than a 1-cent-a-share loss analysts expected. But it was better than the $3.6 million loss the carrier reported in the fourth quarter of 2006. For all of 2007, AirTran earned $52.7 million, or 56 cents a share. It was the best year since 2003 for AirTran, whose hub is at Atlanta.
Copyright 2008 USA Today. All rights
reserved. From http://www.usatoday.com. By Dan Reed.
To view the Internet Travel Monitor Archive, click http://www.tripinfo.com/ITM/index.html.
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