Can Delta Air Lines Continue to Reduce Its Costs in 2016?
For 1Q16, Delta Air Lines (DAL) expects to see its operating margins improve to 18%–20%, backed by solid cost savings and lower fuel prices.
Transportation & Logistics
Market Realist has the latest news on transportation and logistics, from airlines to supply chain solutions.
Industrials Must-know: External factors that influence the airline industry
The airline industry has contributed to the globalization of the world economy. It connects buyers and sellers. It also transports goods across nations. It breaks the barrier of distance and time. The industry’s future looks bright. Travel expenditure in the U.S. is expected to grow by 4.3% in 2014 and 5.1% in 2015.
Spirit Airlines’ Valuation Ratio: How Does It Stack Up?
Spirit and its competitors have seen their EV/EBITDA decrease in the last six months due to the fear of a large increase in available seat miles.
Alaska Airlines’ Keys to High Customer Satisfaction
For the seventh consecutive year, Alaska Airlines held the top spot in Customer Satisfaction among the Traditional Network Carriers survey conducted by J.D. Power.
How Does Spirit Airlines Manage Its Low-Cost Structure?
Spirit (SAVE) ranks first in profitability among seven airlines in the United States. The main driver for this ranking comes from its exceptional ability to manage costs.
Understanding Spirit Airlines’ Low-Cost Business Model
Spirit Airlines (SAVE) follows a simple business model of reducing base airfares as much as possible. All its other services are charged separately.
What Do Yield Spreads between 2-Year and 10-Year Notes Indicate?
While a section of the market is readying itself for a rate hike in the upcoming meeting of the FOMC, there are others who don’t believe that a rate hike would be implemented and instead, are focused on falling inflation.
How Does UPS Benefit from Its Acquisition of Coyote Logistics?
United Parcel Services (UPS) announced its agreement to acquire Coyote Logistics. It’s a Chicago-based logistics firm with contract carrier companies.
Southwest’s Low Cost Strategy Helps Maintain a Competitive Edge
Southwest is known to be the pioneer of low cost travel in the industry. Its 42-year record of profitable operations is enough to prove the success of the company’s business model.
Which ETFs Give Exposure to Courier Stocks?
Smaller ETFs that provide exposure to the courier services industry include Buyback Achievers (PKW), the First Trust Capital Strength ETF (FTCS), and the MSCI Industrials Index ETF (FIDU).
The Key Trends that Could Shape the Courier Industry in 2015
The US has witnessed the emergence of a number of regional carriers such as OnTrac and Eastern Connection, which are providing cheaper, faster delivery options.
Why Is Economic Growth Important for the Courier Service Industry?
Over the past few years, the global courier services industry has managed to recover from the global economic slowdown.
Possible Key Growth Drivers for UPS in the Near Future
The e-commerce industry is poised to grow rapidly in the future. With this growth will come the need for package delivery.
Key Strengths that Keep UPS ahead of Its Peers
Some of UPS’s key strengths that keep it ahead of its competitors include an integrated global network, leading-edge technology, a strong brand name, a strong culture, and impressive financials.
How Has E-Commerce Changed the Courier Services Industry?
In the recent past, there has been a surge in the use of e-commerce across the globe. The impact of this new form of commerce has been felt in each and every industry.
Types of Courier Services and Service Providers
Standard courier services involve collecting the parcels, sorting the parcels, and transferring the parcels to the closest depot to the delivery location.
Who Are the Key Players in the US Delivery Services Industry?
The US courier and parcel delivery services industry consists of about 7,500 companies both large and small, which have combined annual revenue of about $90 billion.
A Look at the Courier Service Industry in the United States
The growth in e-commerce among various economies across the globe has helped shape the highly competitive courier service industry that we know today.
How Is UPS Performing against Its Peers?
UPS has the highest sales among its peer group with $58.2 billion in sales in 2014. Rival FedEx wasn’t far behind with $47.45 billion in sales.
United Parcel Service: How It Delivers Packages to the World
United Parcel Service is the world’s largest package delivery company and a leading global provider of specialized transportation and logistics services. It forms the largest holding of 7.6% in IYT.
UPS: How the World’s Largest Package Delivery Service Began
United Parcel Service (UPS), originally called American Messenger Company, was founded in 1907 by 19-year-old James E. Casey with $100 borrowed from a friend.
FedEx’s Delivery Market Share Is Threatened by New Competitors
FedEx was formed with a vision to change the way delivery services worked prior to 1971. It established a new industry and it has been leading its peers since then.
What Are FedEx’s Key Strategic Business Advantages?
FedEx has been in the marketplace for over 40 years. It has established a huge network spread across more than 220 countries and territories worldwide.
What Are FedEx’s Major Costs?
Salaries and employee benefits form the highest cost for FedEx. They account for ~36% as a percentage of revenue. Salary costs rose 6% for fiscal 2015.
FedEx’s Financial Performance and Long-Term Goals
FedEx’s (FDX) financial performance during the last few years has been extraordinary. It successfully bounced back from the recessionary downturn.
FedEx’s Growth Is Led by Acquisitions and Technology
By 1983, FedEx (FDX) had become the strongest delivery business in the nation. It started a string of acquisitions in order to grow more.
Why FedEx Is Expanding Its Global Reach
FedEx has assembled a portfolio of solutions, from express and freight forwarding to critical inventory logistics, that can solve any global commerce challenge.
FedEx: How a College Paper Idea Turned into a Delivery Giant
The idea behind FedEx (FDX) started off as a term paper by undergraduate Frederick W. Smith in 1965 at Yale University. The company started operations in 1973.
A Key Analysis of FedEx’s Business Model
Currently, FedEx is the global leader in the express delivery market. It offers delivery to and from individuals and businesses. It has various business units.
Improving Capacity Utilization Adds to Airline Profitability
Capacity utilization has improved from the lows of ~57% in the 1970s to ~76% in 2014 and 81.88% in year-to-date 2015.
The Key Variables Impacting Airline Stocks
A strengthening dollar led to improved profitability for US airlines in 1Q15 while subduing profitability for non-US airlines. This further increased the industry’s performance gap across the globe.
What Were Southwest’s Key Performance Drivers for 1Q15?
Southwest Airlines posted excellent financial performance metrics in 1Q15, including ~6% growth in available seat miles.
What Is UTC Building & Industrial Systems?
UTC offers some products and services through UTC Building & Industrial Systems, a combination of two segments, Otis and UTC Climate, Controls & Security.
The Boeing Company’s Narrow-Body Aircraft
The Boeing 737 is the best-selling commercial airliner in history. Reliable and economical, the 737 dominates the short- and medium-haul markets.
Boeing’s Fleet of Wide-Body Aircraft
Wide-body aircraft fly transoceanic routes, can accommodate 200–500 passengers, and often transport commercial cargo across the globe.
Boeing: A Wide Diversification Wingspan
When Boeing bought McDonnell Douglas in 1996, the acquisition helped Boeing overtake Lockheed Martin as the largest defense contractor.Industrials Why political and legal factors impact the airline industry
The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and competition. It’s also impacted by issues like war, terrorism, and the outbreak of diseases—such as Ebola. These issues are political. As a result, they require government intervention.
What makes Embraer successful?
In order to find out what makes Embraer successful, we need to look at its major strengths and what the company has done right.
China Eastern’s operating margin declines due to rising costs
Rising costs impacted China Eastern’s (CEA) operating margins, which declined from 5% in FY09 to 1.8% in FY13.
Rising operating expenses as a percentage of revenue
More than half of China Southern’s total operating expenses in FY13 were related to flight operating expenses.
Even More drives JetBlue’s ancillary revenue
Revenue from JetBlues’ Even More Space grew at a five-year compounded annual growth rate of ~30% from $45 million in fiscal year 2008 to $170 million in fiscal year 2013.Macroeconomic Analysis Freight, passenger index values show rising transportation demand
Although trucking is the most widely used mode of transportation, the fastest growing mode of transport is by air.
Gol maintains low-cost advantage with single fleet type
Using a single aircraft type reduces disruption of operations due to maintenance efficiencies. The airline reduces training costs with standardized pilot training and maintenance routines.
Non-operating expenses eclipse Gol’s operating profitability
Gol’s operating income turned positive in FY13 after reporting losses for two consecutive years.Industrials Must-know: SARS’ impact on the airline industry
SARS was another disease outbreak in 2003. SARS caused a panic similar to the current Ebola outbreak. SARS was a viral respiratory illness.Industrials The global airline market’s key revenue drivers and profitability
According to IATA (or the International Air Transport Association), the global airline industry passenger volume and capacity increased by 5.3% year-over-year in July 2014. Freight volume increased by 5.8%. In July load factor (or capacity utilization) for passengers was 82.3%, and for freight, it was 44.4%.Industrials Why investors should track labor costs in the airline industry
The second largest cost component for airlines is salaries, wages, and benefits. Employment in the U.S. airline industry has increased in the last couple of years when the U.S. economy recovered from the recession and demand for air travel picked up.Industrials Must-know: Why yield is another key driver for airline revenue
Yield is the average fare per passenger per mile. Passenger revenue is calculated by multiplying RPM (or revenue passenger miles) with yield. Yield varies based on demand and supply factors. Since demand for air travel is seasonal, yield is higher during peak seasons.Industrials Must-know: Why airlines should improve their load factor
Load factor is a measure of capacity utilization. It indicates the percentage of total capacity that is utilized by an airline. Since airlines are capital intensive and have high fixed costs, the efficiency with which they utilize their assets is key to generate adequate return on investment.Industrials Must-know: Why available seat miles affect airlines’ revenue
Available seat miles (or ASM) is the measure of airline capacity. It’s calculated as the total number of seats multiplied by the total distance travelled. While RPM (or revenue passenger miles) is a measure of demand, ASM is the measure of supply.