Results mixed but US airline recovery advances

US airlines posted mixed results, with high fuel prices and the sputtering US economy posing obstacles to a recovery boosted by rebounding demand and higher fares, reported Reuters.

US Airways reported its first profitable quarter in nearly three years, while American Airlines narrowed its quarterly loss.

American is expected to be the only major US carrier to report a loss for the second quarter. The company was the largest airline in the world until Delta merged with Northwest in 2008.

United Airlines is set to merge later this year with Continental Airlines creating a carrier even larger than Delta, relegating American to the No. 3 spot.

"There's a lot of concern that American is slipping and that they are losing share to the peer group and they're just not growing," Becker said.

United and Delta both posted profits earlier this week.
Overall, US airlines have posted the strongest second quarter since 2007, JP Morgan analyst Jamie Baker said.

Analysts credit recovering traffic, particularly from premium paying business customers, and higher fares. Ancillary revenue such as baggage fees have also contributed to the brightening prospects.

American narrowed its loss with a 14 percent gain in average fares that helped generate US$5.7 billion in revenues. The carrier posted a net loss of $10.7 million, which it blamed on $330 million in added fuel expenses.

"While the price of oil has not returned to the crisis levels we saw two years ago, it has been up substantially compared to last year," American’s chief executive Gerard Arpey said.
Crude oil prices have slipped to around $77 a barrel after rising eight percent in the second quarter.

US Airways posted a $265 million profit, excluding special items, for the quarter ending June 30, its first profitable quarter since 2007 and its second-best quarter since it completed its merger with America West airlines in 2005.
(Source:www.cargonewsasia.com)