This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Delta, US Airways Beat Unit Revenue Expectations

CHARLOTTE, N.C. ( TheStreet) -- Delta (DAL - Get Report) and US Airways (LCC) both reported Wednesday that August unit revenue was higher than expected, pushing share prices up in morning trading.

Delta said August passenger revenue per available seat mile rose 4%, a result of "a stable demand environment, corporate travel momentum and revenue resulting from customer-facing product improvements," while US Airways reported a PRASM gain of 1%. In general, analysts had anticipated a 2% gain for Delta and some had anticipated that US Airways would report a decline.

Both carriers said comparisons were difficult due to the year-earlier temporary suspension of the Federal Aviation Administration excise tax: Delta said that absent the year-ago suspension, its unit revenue improvement would have been about 1.5 points higher.

US Airways President Scott Kirby, speaking at the Dahlman Rose transportation conference on Wednesday, said PRASM would have been 300 basis points higher without the excise tax suspension and the impact of Hurricane Irene. He said September PRASM growth would be around 2% and "the demand environment can improve" in the fourth quarter.

Kirby said business demand began to slow around the beginning of June as "headlines appeared to deteriorate." In other words, he said, while "core business travel" continued, non-essential business travel diminished due to headlines about Europe, the election, and "the fiscal cliff." However, less volatile leisure demand remained strong.

"The pricing environment remains strong; the industry is seeing steady demand," Kirby said. "I think business demand will return to the level it was in March and April."

The industry now awaits a traffic report from United (UAL - Get Report), which is scheduled to be released on Monday. In a recent report, Wolfe Trahan analyst Hunter Keay wrote that he expects United's August PRASM to be down about 4%, reflecting operational disruptions as well as underperformance.

"Anything worse than (minus) 5% would be a major disappointment and anything better than (minus) 2% would be a pleasant surprise," he said.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
LCC $0.00 0.00%
DAL $44.39 -1.68%
UAL $67.92 -1.09%
AAPL $126.41 -1.66%
FB $81.21 0.39%

Markets

DOW 18,135.72 +38.82 0.21%
S&P 500 2,101.04 +2.51 0.12%
NASDAQ 4,982.8090 +15.6680 0.32%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs