Unit revenue at major U.S. airlines increased 1.6% in January from a year before, ending a streak of monthly year-over-year declines and providing a rare bit of good news for an industry where revenue has been under pressure.
The figure was better than Wall Street analysts' forecast for a gain of as much as 1% and marked the first year-over-year increase since last July.
Airlines measure unit revenue with revenue per available seat mile, or RASM -- the amount of money brought in for each seat flown one mile. The Air Transport Association, an industry group, provides a monthly RASM tally from the top eight airlines to Wall Street analysts, who then disclose them in research reports.
Unit revenue on domestic flights rose 1.1% as airlines filled more seats on their planes, noted Merrill Lynch's Michael Linenberg in a research note. Domestic load factor, which measures the average number of seats filled, rose 5.7 percentage points to 72.8%, which Linenberg pointed out was one of the highest January load factors ever. Nevertheless, domestic yields, which essentially measure average fares, remain under pressure, and fell 6.8% year over year.
On overseas flights, unit revenue increased 2.8%.
J.P. Morgan's Jamie Baker expects industry unit revenue to rise about 1% in February and March. He wrote that most airlines are suggesting that February revenue is running above expectations. But Merrill's Linenberg forecasts flat February RASM, at best, as a result of industry fare reform kicked off last month by
Delta Air Lines'