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American Airlines reports 8.1% drop in June traffic

Mon. July 06, 2009; Posted: 01:36 PM
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Jul 06, 2009 (The Dallas Morning News - McClatchy-Tribune Information Services via COMTEX) -- AMR | Quote | Chart | News | PowerRating -- American Airlines said Monday its traffic declined 8.1 percent in June, slightly more than its 7.8 percent cut in capacity, as the slow economy continued to depress demand for travel.

The bigger drop in both traffic and capacity came on American's domestic routes. The Fort Worth-based carrier said its traffic on those routes decreased 10.1 percent on a 10.6 percent reduction in capacity. However, its load factors, or percentage of seats filled, climbed 0.4 points to 88.2 percent.

On international routes, the airline said its traffic was off 4.5 percent, with capacity down 3.1 percent. It increased its load factor by 0.8 points to 84.0 percent on trans-Atlantic routes.

However, its Pacific routes fell 3.8 points to 85.4 percent and its Latin American load factors dropped 2.7 points to 76.0 percent. Other carriers have stated that concerns over the H1N1 virus, or swine flu, have hit their Asian routes harder than other parts of their system.

American's regional affiliate, American Eagle, said its load factor climbed 2.8 points to 77.9 percent last month compared to June 2008. Its traffic dropped 5.0 percent, less than the 8.4 percent cut in capacity.

US Airways Inc. said its passenger revenues per available seat mile flown was down 20 percent in June, with total revenues per ASM off 18 percent.

"These declines in unit revenues are driven by weaker demand for business travel and lower leisure yields as a result of the global economic recession," US Airways president Scott Kirby said.

American previously had advised its investors June 18 to expect a 16 to 17 percent decline in unit revenues for the second quarter. Continental last week projected that its unit revenues would be down 19.5 percent to 20.5 percent in June.

The sharp drop in US Airways' unit revenues comes despite record load factors in June. The carrier said it filled 86.8 percent of its seats last month, a 1.8-point increase from a year earlier. US Airways' traffic dropped 4.1 percent on a 6.1 percent reduction in capacity.

U.S. airlines had hoped that steep cuts in flying in 2009 would keep revenues and loads up. While they have managed to keep their airplanes roughly as full this year as last, the revenues per seat flown have plummeted.

As a result, several airlines including American and Delta Air Lines Inc. have already announced they'll further reduce flying at the end of the summer.

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For full details on Amr Corporation (AMR) click here. Amr Corporation (AMR) has Short Term PowerRatings of 8. Details on Amr Corporation (AMR) Short Term PowerRatings is available at This Link.

    


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