Better biz travel boosting airline earnings
First-quarter earnings results from US airlines shows revenues from corporate travel are approaching levels last seen in pre-recession 2008.
In some cases, earnings are exceeding almost one third of that time frame.
"The quarter’s improvement was driven largely by improving business demand," US Airways president Scott Kirby told investors and analysts.
The carrier reported corporate revenue growth of 35 percent in the first quarter from the same period last year, Kirby said, “though remarkably, it’s still down six percent compared to 2008."
Kirby, in common with other airline executives, expect a sustained corporate travel recovery this year. He said business demand has grown and pricing is firming. He predicted that would continue.
"We will continue to see a strong year-over-year pricing environment and improving corporate demand, with booked corporate up 45 percent year-over-year thus far in April, and overall booked yield up 20 percent thus far in April," he said. He added:
"Both are still slightly below 2008 levels, though we are getting close to the 2008 levels of both yield and business demand."
Delta Air Lines CEO Richard Anderson said total corporate revenue grew an astounding 61 percent year over year in its latest weekly snapshot with the number of tickets sold up 46 percent.
"If you look at the trend line over the last year, it’s a steady upward slope to the right," he said during the carrier’s earnings call.
Delta president Ed Bastian, however, told one analyst, "We’re not quite to 2008 levels, but we’re close to 2007 levels, and we expect to be close to 2008 levels probably by the end of the year."
Business travel demand continues to accelerate, added CFO Tom Horton of American airlines corporate travel trends.
In the first quarter, the carrier saw revenues in that segment increase by more than 17 percent — the result of both more traffic and higher fares. He said those trends are building.
By David Wilkening
David
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