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View Full Version : Back In Black....For some.



T-Bird76
07-26-2005, 10:13 PM
While the past few years has seen loses from most of the major airlines in the billions and billions last weeks 2nd quarter reports from airlines like AMR, Continental, Jet Blue, America West and Southwest's record breaking profit announcement finally means some good news for an industry that some say was done for. What is interesting however is some airlines like Delta are still reporting huge loses in the hundreds of millions which simply doesn't make sense when you look at AMR and the profit they achieved. I'd like to take a look at some of the 2nd quarter results from the airlines and some notables that should be mentioned.

AMR- AMR corp parent company of American Airlines/American Eagle reported a 2nd quarter profit of 58 million dollars, still not enough to reverse its yearly loss but some notable accomplishments have been made by AMR.
- 700 million in annual savings built into AMR’s annual budget.
- RPM was up 7.4%
- ASM was up 2.3%
- Record load factor of 79.5%
- Cash balance of 3.9 billion
- AMR contributed 75 million to its employees pension plans

Continental- Continental Corp reported 2nd quarter profits of 100 million dollars helping to increase CO’s performance from 2004 by 53%. CO still is in the red for 2005 by 86 million dollars but with a strong 3rd quarter summer travel season and a robust 4th quarter holiday season Continental indicates it may earn a small profit for 2005.
- 82.2% load factor
- Passenger revenue increased 11.8 over the same period in 2004
- RPM was up 7.2 %
- Overall yield was up 3.2% over 2004
- ASM was up 5.5% over 2004
- OAG Airline of the year 2005
- OAG Best Airline in North America

Alaska Airlines- Alaska Air Group, which includes Alaska Airlines and Horizon Airlines, reported a strong 2nd quarter profit of 17.4 million dollars compared to a net loss of 1.7 million for the same period in 2004. These profits were made despite Alaska’s poor on time performance and operational problems in KSEA for the month of June.
- 77.9% load factor increase of 5.1% from 2004
- RPM increased 8.4% from 2004
- ASM increased 1.4% from 2004
- Horizon’s load factor was 73%, 5.5% increase from 2004
- Alaska Air group has subcontracted Ramp work at SEA which resulted in operational problems for the 2nd quarter

America West, Jet Blue, AirTran- HP reported a 13.9 million dollar profit over 2004, while JetBlue reported a 12.2 million dollar profit which was a decrease from 21 million over 2004. AirTran reported a strong 11.4 million dollar profit resulting in a 3.3 million dollar profit for 2005 thus far.

Southwest- Southwest reported their 116th straight profit of 155million dollars. Southwest attributes its record profit to its fuel hedging program, increased passenger traffic, continued lean operating model, and lower operating costs even despite higher fuel costs.

Still to report are Fly I , Midwest, Republic, and Mesa. Loses were reported by Delta and Northwest for over 600 million combined. I find the business side of the airlines just as interesting as the spotting side of it. The airline industry is one industry that for years has been stuck in the 1960’s and refused to move forward. Now with the rapid and successful growth of the LCC’s the legacies had to change their business plan almost overnight. As we’ve seen some have done it well while others still have failed to turn their company around. While the lose of a major airline would be devastating for the employees who in the end are the only ones who get hurt the industry can certainly afford to lose some of the dead weight that is flying around out there.


"Information was obtained my me reading a lot of 2nd quarter reports last night"