Blog | Can AA Revenue Gains Combat Merger?

19

Jun
2012

Can AA Revenue Gains Combat Merger?

Once again, bankrupt American is outpacing the airline industry in terms of unit revenue gains.

The carrier reported Friday that its passenger revenue per available seat mile in May rose 7.3%, the biggest gain among the five major carriers who have so far reported May PRASM.

American’s May outperformance follows the industry’s second biggest gain in the first quarter and the biggest gain in April. American, battling a takeover bid by US Airways, has trumpeted its unit revenue gains in order to make the point that it can successfully compete on its own.
Strength in Latin America, a continuing gradual improvement in benefits from a trans-Atlantic joint venture with European partners and elimination of unprofitable flying are all considered to be factors in American’s RASM gains.

The May improvement was driven “by a strong yield environment and increased international load factors,” American said in a prepared statement. “We outperformed the industry in April and our strong momentum is continuing,” said spokesman Sean Collins.

During the first quarter, American reported a 10.3% PRASM gain, trailing onlyDelta’s 11% gain. In April, American reported an 11.6% gain, the highest.

Complete Article & Source: http://www.thestreet.com/story/11574701/1/amr-combats-merger-with-improved-revenue.html


  1. Dan Ferguson Says:
    June 21, 2012 at 6:38 am

    American is doing well on PRASM but they’re problem is CASM-cost where they’re also a leader. If they can’t get their cost structure industry competitive then PRASM alone will not save them.

    • DataSwell Says:
      June 24, 2012 at 4:52 pm

      Indeed. Bankruptcy will get their costs under control one way or another. Question is will this be done independently or within US/AA merger construct. Our informal poll of industry execs suggests that 90% believe merger will happen…and most believe it will happen before AA exits bankruptcy.