Top US airlines’ key revenue driver performance—August 2014

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Introduction

This series will discuss the top five U.S. airlines’ performance in August 2014. The companies include Delta Air Lines (DAL), American Airlines (AAL), United Continental (UAL), Southwest (LUV), and JetBlue (JBLU).

We’ll analyze important indicator’s growth trends. The indicators include traffic, capacity, capacity utilization, and unit revenue. We’ll look at the indicators for each of the top U.S. airlines in their respective domestic and international markets.

We’ll also summarize the airlines’ operational performance for the month. We’ll provide a valuation update to assist investors in their investment decisions.

Part1_Airline share prices

August highlights

According to the International Air Transport Association (or IATA), worldwide airline shares increased by 3% in August—compared to July. The increase was supported by declining jet fuel prices. U.S. airlines had the highest increase. Their share price increased by 5%.

The top U.S. airlines reported a positive growth trend in capacity and traffic data. In regards to traffic, the top U.S. airlines account for more than 70% of the market share. Tracking the airlines’ progress provides a broad perspective on the current trends in the U.S. airline industry.

August performance highlights for top airlines in the U.S. include:

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  • Delta’s (DAL) traffic growth was higher in the domestic market. The capacity growth was higher in the international market—especially in the Latin American market. We’ll provide more details in Part 2.
  • United’s (UAL) traffic and capacity growth was only positive in the international market. It was driven by strong demand in Latin America. There will be more details in Part 3.
  • American’s (AAL) overall traffic remained flat year-over-year (or YoY)—except the Pacific market and regional segment. All other markets’ traffic declined in August. Capacity increased in all of the markets except domestic and Latin America. We’ll provide more details in Part 4.
  • Southwest reported a traffic increase. However, it reported a decrease in capacity. There will be more details in Part 5.
  • JetBlue reported an increase in traffic and capacity. We’ll provide more details in Part 6.

For more details about the key indicators on an industry-wide basis refer to Must-know: Key indicators impacting airline industry performance.

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