JetBlue Airways

US airlines’ ancillary revenues continue to grow, but at a slower pace for legacy carriers

The US Department of Transportation (DoT), through the Bureau of Transportation Statistics (BTS), has released second quarter data which provides some interesting numbers for consideration. Looking at the ancillary revenue collected by carriers, we find that the amounts collected continue to grow, but for most legacy airlines at a slower pace. The overall year-on-year total increased only 5%.

However, passengers flying Spirit had a quite different experience and despite its general “no fees” image, Southwest has increased its take from fees by 10% over the year.

JetBlue Airlines posts modest USD39 million profit and grows capacity as competitors scale back

In what has become the theme for 2011, JetBlue reported falling profits on rising revenues with USD35 million in profits down from the USD59 million posted last year. It came in just shy of analyst expectations that projected earnings of USD36.9 million. The company generated record revenues, which jumped 16% to USD1.1 billion.

After the industry took losses in the first quarter, second and third quarter results showed promising trends with rising revenues, although they could not completely offset rising fuel. While most airlines are expected to post profits this year, including JetBlue, those profits will likely be down from 2010. Still, the trend is in a positive direction given the fact that a decade ago, before the restructuring of the industry, these companies would likely have been awash in red ink.

US airlines to report increasing revenue and strong demand

The distressing economic news this summer made September important in signaling how the US airline industry is performance. Judging from the early operational reports and 3Q2011 guidance issued, traffic and demand are defying the gloom offered by Wall Street and Washington. Indeed, air travel demand is expected to remain strong, which bodes well for the industry's bottom line given the fact capacity continues to tighten.

Still, US airlines are not sanguine about the state of the industry, with most not only pulling capacity in the fourth quarter but signaling the same for 2012 when a number of carriers will be taking delivery of new aircraft but keeping capacity flat. That capacity discipline, in evidence since early Spring when fuel continued its climb, meant the USD6-10 fare hike imposed in mid-September stuck and will likely segue into future hikes as demand remains strong on increasingly tight capacity. For now the hike applies to last minute tickets.

JetBlue touts Boston, Caribbean to investors

JetBlue CFO Ed Barnes sees no drop off in demand resulting from this summer’s economic woes, but is "monitoring the economic changes closely". The last sign of weakness was in June, Mr Barnes told this week's Dahlman Rose Transportation Conference, adding July and August were in positive territory although not as positive as the airline experienced in the first quarter.

Pilot union efforts at JetBlue fail, bigger issues continue across the industry

The Air Line Pilots Association’s (ALPA) second loss of organising JetBlue’s 2,100 pilots which was handily defeated this week, makes it clear that the rule change promulgated by the National Mediation Board (NMB) last year - which was supposed to make it easier for unions to win elections - has had little impact on union success. Of course, that begs a bigger question that only unions can answer. Why do so many of today’s employees feel unions are not necessary any more?