Highest Load Factors Of The Majors

[Fly]

Highest load factors of the majors
by: sonsby3 01/07/04 10:01 am
Msg: 140405 of 140428

Inside the Industry: Traffic Reports
----------------------------------------------------
United had the highest load factor of the major U.S
airlines. Traffic results for all major airlines
follow below:

December 2003
Load Factor RPM ASM
(percent) (billion) (billion)

United 78.4 9.2 11.7
Northwest 78.1 5.7 7.3
Continental 77.0 5.2 6.7
Delta 74.1 8.6 11.6
American 73.7 10.4 14.0
US Airways 72.9 3.1 4.3
Southwest 64.0 3.9 6.2

* Northwest Airlines' December load factor of 78.1
percent is 1.2 points above December 2002.
Northwest flew 5.73 billion revenue passenger miles
(RPMs) and 7.34 billion available seat miles (ASMs),
a traffic decrease of 4.8 percent and a capacity
decline of 6.3 percent versus December 2002.

* Continental Airlines reported a record December
load factor of 77.0 percent, 3.1 points above last
year's December load factor. Continental flew 5.2
billion RPMs and 6.7 billion ASMs, a traffic
increase of 7.6 percent and a capacity increase of
3.3 percent as compared to December 2002.

* Delta Air Lines' traffic in December 2003
decreased 0.5 percent from December 2002 on a
capacity decrease of 0.3 percent. Delta's system
load factor was 74.1 percent, down 0.2 points from
the same period last year.

* US Airways' RPMs for December 2003 increased 4.1
percent on a 3.4 increase in ASM compared to
December 2002. Passenger load factor was 72.9
percent, a 0.5 percentage point increase compared to
December 2002.

* American Airlines reported a monthly load factor
of 73.7 percent, an increase of 0.5 points compared
to last year. Despite a decline in capacity,
December traffic was essentially unchanged compared
to last year.

* Southwest Airlines flew 3.9 billion RPMs in
December 2003, relatively the same RPMs flown in
December 2002. ASMs increased 4.3 percent to 6.2
billion from December 2002's level of 5.9 billion.
The load factor was 64.0 percent, compared to 66
percent last year.

 

[FWAAA]

Of all the airlines on the list, funny how only WN will report a profit for full-year 2003. In fact, it was profitable in December, 2003 despite its low load factor.

Profits are what matters, not full airplanes.

 

[Busdrvr]

Of all the airlines on the list, funny how only WN will report a profit for full-year 2003. In fact, it was profitable in December, 2003 despite its low load factor.

Profits are what matters, not full airplanes.

Interesting analysis, I'll now change my entire investment philosophy to focus on the past. The load factors on tell part of the story. In the case of SWA, you have yields going DOWN, and load factors going DOWN. Jetblue is seeing unit revenue going DOWN. FRNT saw it's DEC yield go down approx 7%. Meanwhile at UAL, RASM went UP 9% in oct, and 14% in November, and UAL will likely post an operating PROFIT for Q 4. A rational investor looks at the FUTURE and what the trands show, not on what happened in 1946

 

[FWAAA]

Interesting analysis, I'll now change my entire investment philosophy to focus on the past. The load factors on tell part of the story. In the case of SWA, you have yields going DOWN, and load factors going DOWN. Jetblue is seeing unit revenue going DOWN. FRNT saw it's DEC yield go down approx 7%. Meanwhile at UAL, RASM went UP 9% in oct, and 14% in November, and UAL will likely post an operating PROFIT for Q 4. A rational investor looks at the FUTURE and what the trands show, not on what happened in 1946

Who said anything about 1946?

Yes, UA may likely report an OPERATING profit for Q4, but not a NET profit. Add in the things WN pays for (that UA does not, like interest and certain rents, due to its CH 11 status) and sadly, UA is not profitable. WN is.

Hey, I'm hoping UA pulls out of the nosedive. Really. But high load factors don't mean an airline can pay its bills.

Maybe WN's growth next year (10% more airplanes than in 2003, net of retirements) will cause it to stumble. But my money is on continued profits at WN.

And it's about time the market recognized what's wrong with the numbers at B6.

 

[Busdrvr]

"Yes, UA may likely report an OPERATING profit for Q4, but not a NET profit. Add in the things WN pays for (that UA does not, like interest and certain rents, due to its CH 11 status) and sadly, UA is not profitable. WN is."

Why is it SO DIFFICULT for people to understand that ALL the bills, PAID OR NOT, make it to the balance sheet, and therefore the quarterly reports. This is basic stuff. As for "net" profits. Lets go over that aspect sloooooowly. Part of the reason UAL will show "net" losses is because of "special items". Some of those special items will actually make it into the "operating profit/loss" numbers. For example, UAL has devaluated a significant part of it's fleet in BK. UAL decides that a 737-500 isn't worth much on the open market, they lower the value of that asset on the books. SWA does not do this. Both companies operate 737-500's, but I'll guarentee UAL's have a lower "book value", and when these assets were "re-evaluated" they resulted in charge to the "net" books. Will SWA take a special charge? Only if they will still show a profit despite it. Why? too much of SWA's value is derived from the notion that they are "bullet proof" and haven't had a quarterly loss in 13 years. By the same token, UAL will emerge from BK with a shareholder equity of ZERO. That's how it's done. Someone with even a rudimentary knowledge of accounting will look past the press releases to cash flow ect to get a better understanding of the underlying situation.

 

[Fly]

I can almost hear them typing furiously away at their keyboards.

Isn't it amazing the amount of jerks that feel it necessary to take every positive thing at UAL and try to turn it around?

 

[FWAAA]

"Yes, UA may likely report an OPERATING profit for Q4, but not a NET profit. Add in the things WN pays for (that UA does not, like interest and certain rents, due to its CH 11 status) and sadly, UA is not profitable. WN is."

Why is it SO DIFFICULT for people to understand that ALL the bills, PAID OR NOT, make it to the balance sheet, and therefore the quarterly reports. This is basic stuff. As for "net" profits. Lets go over that aspect sloooooowly. Part of the reason UAL will show "net" losses is because of "special items". Some of those special items will actually make it into the "operating profit/loss" numbers. For example, UAL has devaluated a significant part of it's fleet in BK. UAL decides that a 737-500 isn't worth much on the open market, they lower the value of that asset on the books. SWA does not do this. Both companies operate 737-500's, but I'll guarentee UAL's have a lower "book value", and when these assets were "re-evaluated" they resulted in charge to the "net" books. Will SWA take a special charge? Only if they will still show a profit despite it. Why? too much of SWA's value is derived from the notion that they are "bullet proof" and haven't had a quarterly loss in 13 years. By the same token, UAL will emerge from BK with a shareholder equity of ZERO. That's how it's done. Someone with even a rudimentary knowledge of accounting will look past the press releases to cash flow ect to get a better understanding of the underlying situation.

Not difficult at all.

Some may not understand the distinction between operating profit and net profit. And my discussion has nothing to do with special charges. Most of us don't see interest expense as a special charge.

UAL actually reported an operating profit of $19 million in Q3 of 2003, but a NET LOSS of $133 million once interest expense was factored in (ignoring special charges).

Nearly every airline in the USA (except maybe USAir) reported an operating profit for Q3, so another operating profit from UAL for Q4 is hardly surprising.

BTW, are you as friendly in your everyday conversations in the air? If so, people must really love working with you. Have a great day.

 

[Borescope]

Isn't it amazing the amount of jerks that feel it necessary to take every positive thing at UAL and try to turn it around?

What's so positive? When we give out tickets away, it's kind of like a scale. Take weight off one side(tickets for less) and the other side moves (load factor). Doesn't mean we are making any more money off them.

 

[FWAAA]

Given that the SARS scare is finally over, I expect that UAL will report huge percentage increases in traffic and load factor for the next 3 or 4 months (compared to last year's dismal numbers). But given how badly UAL was hurt by the SARS scare (which was a giant load of BS), the anticipated huge percentage leaps should probably not be cause for jubilant celebration (except, perhaps, by the original poster to this thread).

Let's hope that the numbers for Q1 are impressive when measured against 2002 (or even better, when measured against 2001).

 

[WorldTraveler]

since I'm so good at hypothetical situations, let's try this one.

Do you know how many frequent flyer free tickets UA is carrying, particularly from USAirways' passengers? Do you wanna guess that the number of US free passengers on both US and UA is going to take a huge jump in the next couple months? (you may remember that part of UA's plunge in yields leading up to and after its bankruptcy filing was because of the huge FF burn rate).

just a hypothesis that has roots in the earliest FF programs (which wasn't 1946, BTW).

 

[Busdrvr]

"Some may not understand the distinction between operating profit and net profit. And my discussion has nothing to do with special charges. Most of us don't see interest expense as a special charge.

UAL actually reported an operating profit of $19 million in Q3 of 2003, but a NET LOSS of $133 million once interest expense was factored in (ignoring special charges)."

Actually, it appears some can't even look at the interest block and figure it out. NET interest expense for Q3 at UAL was 101 million. In what part of the world does $19 million - 101 million = -133 million? Your statement that you were "ignoring special items" is ABSOLUTELY FALSE. In addition to the "special items" that are expensed as part of "net" there were a couple WITHIN operating performance. You may have missed them, it required reading past the headlines.... UAL had 71 Million in special items that were part of "operating expenses". They took a 45 million charge for the sale of some owned Jets at less than book value. additionally UAL took a 26 million hit on the value of other jets that will be parked soon. If you are going to try to slam UAL, at least try to be accurate.

"Nearly every airline in the USA (except maybe USAir) reported an operating profit for Q3, so another operating profit from UAL for Q4 is hardly surprising."

Don't forget DAL, and what other majors do YOU think will report an operating profit in Q4?

"Given that the SARS scare is finally over, I expect that UAL will report huge percentage increases in traffic and load factor for the next 3 or 4 months (compared to last year's dismal numbers). But given how badly UAL was hurt by the SARS scare (which was a giant load of BS), the anticipated huge percentage leaps should probably not be cause for jubilant celebration"

Really?! the only reason UAL is starting to KA in the pacific is SARs going away. Then NWA must be rocking and rolling YOY in the pacific. After all UAL saw pacific traffic increase 2.4% YOY. Surely NWA will be rocking...but wait!! NWA had it's DEC traffic drop 13.7 % YOY. Must be some strange NWA only SARs thing....

"BTW, are you as friendly in your everyday conversations in the air? If so, people must really love working with you. Have a great day."

If I had to correct a captain over and over and over again on the most basic aspects of flying, then you are correct, I wouldn't be much fun.... I haven't flown with a FQ 50 for a while now though....

"What's so positive? When we give out tickets away, it's kind of like a scale. Take weight off one side(tickets for less) and the other side moves (load factor). Doesn't mean we are making any more money off them."

Actually Borescope, UAL IS making more money off them. RASM for Oct UP 9% YOY, Nov UP 14% YOY. I don't think you fully understand the implicaton of those numbers. That is FAR above ANYTHING being reported or leaked by other Airlines. That means that on average in Nov every Airbus, 737, 757, 767, 777, 747-400 brought in 14% MORE cash for each and every flight. Don't be surprised if DEC RASM is up approx 20%....

 

[Busdrvr]

since I'm so good at hypothetical situations, let's try this one.

Do you know how many frequent flyer free tickets UA is carrying, particularly from USAirways' passengers? Do you wanna guess that the number of US free passengers on both US and UA is going to take a huge jump in the next couple months? (you may remember that part of UA's plunge in yields leading up to and after its bankruptcy filing was because of the huge FF burn rate).

just a hypothesis that has roots in the earliest FF programs (which wasn't 1946, BTW).

The airlines have been doing the "accounting thing" for quite a while so your hypothetical situation has little merit. Here's why.

When UAL "sells" FF miles they "debit" the books for the value of that travel. For example, if you bought a $1000 ticket that gave you a "free" ticket worth $200, then when you fly on that $1000 ticket, UAL would only count $800 in revenue for the current period. The entire $1000 would show up in cash flow. Then when you flew the "free" ticket, the other $200 shows up as revenue (but nothing shows up on cash flow). Additionally, loyalty services actually sells miles (to credit card companies, ect). When the cash shows up, it hits the "cash flow" statement and becomes an obligation. When the miles are cashed in, it's revenue.

In any case, I wouldn't expect you to trust me as your only source for the vast knowledge of all things Airline that I am able to impart, so here's a little link explaining the accounting for award travel. You will notice that the article is somewhat dated (1991), and specifically cites United's outdated method, so I took the liberty of also pasting a blurb from Q1 2000 report citing the cahnge to UAL's method, and the associated charge... ENJOY

http://www.nysscpa.org/cpajournal/old/11726033.htm

From UAL’s Q1 2000 financial’s

“One-time Charges
Based on the recently issued Staff Accounting Bulletin No.101, "Revenue Recognition in Financial Statements" ("SAB 101"), the company has changed the method it uses to account for the sale of mileage to participating partners in its Mileage Plus program. Under the new accounting method, a portion of the revenue from the sale of mileage is deferred and recognized when the transportation is provided. In accordance with the provisions of SAB 101, the company recognized a charge of $209 million, net of tax, for the cumulative effect of a change in accounting principle, to reflect application of the accounting method to prior years.â€￾


BTW, when an U pax uses an U award on a UAL jet, U sends UAL a check

 

[JungleClone]

When are people going to stop their incessant comparisons of UA to Southwest? You simply cannot make an accurate comparison. You're better suited to compare UA to other large, network airlines and stop wasting your time comparing them to Southwest.

 

[North by Northwest]

Busdriver stated"Really?! the only reason UAL is starting to KA in the pacific is SARs going away. Then NWA must be rocking and rolling YOY in the pacific. After all UAL saw pacific traffic increase 2.4% YOY. Surely NWA will be rocking...but wait!! NWA had it's DEC traffic drop 13.7 % YOY. Must be some strange NWA only SARs think." Full Year 2003 Full Year 2002 Change NWA
Revenue Passenger Miles (000s)

Pacific 18,198,704 19,996,635 (-9.0%)
----------------------------------------------------------------------------
United
REVENUE PASSENGER MILES (000):

PACIFIC 18,973,816 22,165,210 (-14.4%)

This information was taken from both companies corporate info. Nuff said.

 

[Busdrvr]

Uhhh.... Check the DECEMBER NUMBERS. That is the topic of this thread after all. UAL is UP 2.4% to 1,912,192,000 RPM's and NWA is DOWN 13.7% to 1,516,788,000. That's the point, things are turning around in a BIG way for UAL. Your number merely illustrates how drastic that turn around is considering what the numbers were even just six months ago.