Airlines Fly More for Less - TheStreet

Unit revenue at major U.S. airlines slumped 1.6% in February from a year before -- another symptom of the overcapacity and stiff competition roiling the industry.

Even though traffic rose 3.7% year over year, airline fares came under pressure. "The culprit behind the lower top-line number was yield (average fare per mile), which fell 5.3% on a system basis and 7.7% on a domestic basis," Merrill Lynch analyst Michael Linenberg wrote in a research report.

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 report from the top eight airlines to Wall Street analysts, who then disclose it in research reports.

February marked the first full month of an industrywide fare restructuring sparked by

Delta Air Lines'

(DAL) - Get Report

Simplifares program, which cut some domestic fares by 50% and simplified pricing.

Domestic RASM fell even more than the overall number. It was down 2.7% from a year ago, even though the airlines' domestic load factor, which measures the percentage of seats filled, increased 3.8 percentage points to 73.8%.

"We believe these results reflect the depressive effect on revenue due to Delta's fare structure," Linenberg wrote. "Looking forward, an early Easter this year will certainly help March numbers. In addition, we continue to expect international (unit revenue) to outperform domestic."