Capacity and Fuel Brightening 2007 Look – Lehman Brothers Investment Report
Revenue Commentary:
4Q RASM around the industry is shaping up as a minor disappointment, but is more than offset by a materially improving 2007 outlook. Given substantial changes in fuel, we see moderate upside potential in the group at large assuming no consolidation activity. Consolidation could provide significant upside and given fuel changes, does not seem to be meaningfully discounted in stocks at present levels. We believe risk-reward remains positive around the group.
Expect December mainline RASM for the ATA composite to come in at 4.5% domestic and system, but largely a non-event given pre-announcements for many carriers we follow.
Capacity Tracking - 1/12/07
Forward schedule activity at a broader level this week is consistent, in our view, with plans articulated by individual carriers; we do not view the changes made this week as meaningful from a forecasting perspective. Mechanically, the largest changes this week came from CAL adding in APR and MAY and JBLU adding in MAY, offset partially by UAUA reductions in APR and MAY.
* We continue to look for 2.6% domestic capacity growth in 2007. While still not finalized, early 2007 schedules point to capacity growth for 2007 in-line to lower than our expectations.
* We expect carriers in general, will add capacity in coming weeks as focus moves to the APR and MAY schedules. FEB and MAR schedules look in-line with seasonal trends, with a slightly larger than normal build into MAR (a function of a FEB schedules being below normal seasonal trends). 2Q07 schedules continue to show lower than expected growth in aggregate. As focus shifts to the APR and MAY schedules, we expect to see most airlines fill out schedules further.
Fares UP, Fuel Down – JP Morgan Investment Report
See Report
Regards,
USA320Pilot
Revenue Commentary:
4Q RASM around the industry is shaping up as a minor disappointment, but is more than offset by a materially improving 2007 outlook. Given substantial changes in fuel, we see moderate upside potential in the group at large assuming no consolidation activity. Consolidation could provide significant upside and given fuel changes, does not seem to be meaningfully discounted in stocks at present levels. We believe risk-reward remains positive around the group.
Expect December mainline RASM for the ATA composite to come in at 4.5% domestic and system, but largely a non-event given pre-announcements for many carriers we follow.
Capacity Tracking - 1/12/07
Forward schedule activity at a broader level this week is consistent, in our view, with plans articulated by individual carriers; we do not view the changes made this week as meaningful from a forecasting perspective. Mechanically, the largest changes this week came from CAL adding in APR and MAY and JBLU adding in MAY, offset partially by UAUA reductions in APR and MAY.
* We continue to look for 2.6% domestic capacity growth in 2007. While still not finalized, early 2007 schedules point to capacity growth for 2007 in-line to lower than our expectations.
* We expect carriers in general, will add capacity in coming weeks as focus moves to the APR and MAY schedules. FEB and MAR schedules look in-line with seasonal trends, with a slightly larger than normal build into MAR (a function of a FEB schedules being below normal seasonal trends). 2Q07 schedules continue to show lower than expected growth in aggregate. As focus shifts to the APR and MAY schedules, we expect to see most airlines fill out schedules further.
Fares UP, Fuel Down – JP Morgan Investment Report
See Report
Regards,
USA320Pilot
See where DL, CA and AA raised fares by $10.00 RT again.
