Latest news with #DevonMay
CNBC
22-05-2025
- Business
- CNBC
American Airlines CFO says some travelers are avoiding Newark airport
American Airlines' chief financial officer said Thursday that some travelers are avoiding Newark Liberty International Airport for other options in the area after a spate of recent disruptions, but cautioned that the impact is "modest." "There probably is some amount of book-away from Newark flights over into LaGuardia, JFK, maybe Philadelphia to a lesser extent," CFO Devon May said at the Wolfe Research conference. The Federal Aviation Administration this week ordered airlines to temporarily cut flights at Newark to relieve congestion there as carriers grapple with a shortage of air traffic controllers, equipment outages and runway construction at the New Jersey airport. Bad weather has also added to disruptions in recent weeks. American has a roughly 4% market share at Newark, according to the most recent data from the Port Authority of New York and New Jersey, which operates the airport along with LaGuardia Airport and John F. Kennedy International Airport, both in Queens, New York. "There's something happening there, but I think it's relatively modest when you think of the broader network," American's May said. United Airlines dwarfs all other airlines at Newark with its nearly 70% share. That carrier had proactively announced cuts of 35 flights a day earlier this month to put more slack in the system. Earlier this month, Transportation Secretary Sean Duffy said the U.S. will spend billions to overhaul the aging U.S. air traffic control system. President Donald Trump's tax bill, which passed the House early Thursday includes $12.5 billion for air traffic control modernization and staffing.
Yahoo
25-04-2025
- Business
- Yahoo
Airlines' turbulent start to the year shows why budget carriers are racing to overhaul their business models
Major airlines say premium cabins and international demand are key amid economic uncertainty. Budget carriers have historically lacked premium seats in favor of cheaper no-frills cabins. Frontier, Spirit, and Southwest are all deploying new premium strategies to generate more revenue. Major airlines continue to prove the importance of premium cabins as budget carriers play catch-up. First-quarter earnings from American Airlines, Delta Air Lines, and United Airlines showed slowed growth and planned capacity cuts amid economic uncertainty and diminishing demand. Less government travel and fewer US-bound tourists didn't help. Only one carrier, United, offered any financial guidance for the rest of the year, and warned a recession could cut profits by a third. One thing all major carriers reporting results so far can agree on is that premium and international demand are helping to keep things afloat, even as share prices crater. That's something budget carriers have only recently begun to invest heavily in. Without first-class or business seats to offer flyers, Frontier Airlines, Spirit Airlines, and Southwest Airlines have fewer ways to compensate for decreased demand and capacity cuts. "We anticipate softness in the domestic main cabin to continue," American CFO Devon May said in the airline's Thursday earnings call. "To partially offset this, we expect long-haul, international, and premium bookings to outperform year over year." Delta and United said economy cabin travelers tend to be more price sensitive and may delay travel plans amid the downturn, while premium economy, business class, and first-class seats are a more resilient and significant portion of their revenue. New premium strategies announced by a slew of budget airlines last year, like plusher seats and luxury amenities, could help generate more revenue in the long run, but installing them on planes will take time. All three major carriers reported year-over-year premium revenue growth in their first-quarter earnings. American saw a 3% rise, Delta's was 7%, while United increased by 9.2%. "I don't think we've ever had premium as a larger percent of our total revenues as we do right now," Delta president Glen Hauenstein said in the airline's April earnings call. "It's sitting very resilient." Executives attributed this to affluent travelers still willing to pay for premium seats despite the economic environment, especially long-haul flights to Europe and Asia. They said as much as 75% to 80% of their international revenue originates in the US, and bookings remain strong through the summer compared to the comparatively lower domestic demand. On the other hand, low-cost airlines' historically all-economy airplanes do not have swanky first or business-class cabins and do not fly long-haul to popular international markets like London and Japan. Budget carriers' limited revenue streams and lower profit margin offerings make it harder to account for their losses as they cut thousands of flights this year. Mainline flight reductions can be more easily offset. Frontier, Spirit, and Southwest started bucking their historically no-frills trend in 2024. These add-ons come at a cost and would help the budget carriers collect more revenue. For example, Spirit revamped its premium "Big Front Seat" bundle with more perks like free snacks, alcohol, Wi-Fi, and priority check-in. Frontier added a "business-class-like" cabin where the middle seat is blocked. Southwest plans to deploy new premium extra legroom and front row seats in 2026. It will also start charging for checked bags in May for the first time in its 50-year history, though loyalty and elite status holders will still keep the perk. Those investments likely won't show up until at least the third-quarter results, analysts said. "There was a better way to maximize the revenue per square foot in the aircraft, which is the whole game here," Southwest CEO Bob Jordan said in Thursday's earnings call on adding premium seating. Delta earned $5.4 billion in revenue from its economy seats and $4.7 billion from its premium cabins during the first quarter. That means its premium cabin revenue was equal to 88% of the economy class revenue despite taking up much less real estate inside the plane. Those are the types of returns the low-cost airlines and their investors hope to get a taste of. Expected second-quarter revenue from Delta and American ranges from down 2% to up 2%, while Southwest expects flat performance or a decrease of as much as 4% year-over-year. Frontier's stock is down about 55% year to date, and Southwest is down 21%, outpacing the broader market. Both have pulled their full-year guidance. Spirit shares will begin trading again on April 29 after the airline emerged from Chapter 11 bankruptcy in March. Read the original article on Business Insider Sign in to access your portfolio
Business Insider
25-04-2025
- Business
- Business Insider
Airlines' turbulent start to the year shows why budget carriers are racing to overhaul their business models
Major airlines continue to prove the importance of premium cabins as budget carriers play catch-up. First-quarter earnings from American Airlines, Delta Air Lines, and United Airlines showed slowed growth and planned capacity cuts amid economic uncertainty and diminishing demand. Less government travel and fewer US-bound tourists didn't help. Only one carrier, United, offered any financial guidance for the rest of the year, and warned a recession could cut profits by a third. One thing all major carriers reporting results so far can agree on is that premium and international demand are helping to keep things afloat, even as share prices crater. That's something budget carriers have only recently begun to invest heavily in. Without first-class or business seats to offer flyers, Frontier Airlines, Spirit Airlines, and Southwest Airlines have fewer ways to compensate for decreased demand and capacity cuts. "We anticipate softness in the domestic main cabin to continue," American CFO Devon May said in the airline's Thursday earnings call. "To partially offset this, we expect long-haul, international, and premium bookings to outperform year over year." Delta and United said economy cabin travelers tend to be more price sensitive and may delay travel plans amid the downturn, while premium economy, business class, and first-class seats are a more resilient and significant portion of their revenue. New premium strategies announced by a slew of budget airlines last year, like plusher seats and luxury amenities, could help generate more revenue in the long run, but installing them on planes will take time. Mainline carriers are cashing in on premium demand All three major carriers reported year-over-year premium revenue growth in their first-quarter earnings. American saw a 3% rise, Delta's was 7%, while United increased by 9.2%. "I don't think we've ever had premium as a larger percent of our total revenues as we do right now," Delta president Glen Hauenstein said in the airline's April earnings call. "It's sitting very resilient." Executives attributed this to affluent travelers still willing to pay for premium seats despite the economic environment, especially long-haul flights to Europe and Asia. They said as much as 75% to 80% of their international revenue originates in the US, and bookings remain strong through the summer compared to the comparatively lower domestic demand. On the other hand, low-cost airlines' historically all-economy airplanes do not have swanky first or business-class cabins and do not fly long-haul to popular international markets like London and Japan. Budget carriers' limited revenue streams and lower profit margin offerings make it harder to account for their losses as they cut thousands of flights this year. Mainline flight reductions can be more easily offset. Budget carriers want a piece of the premium pie Frontier, Spirit, and Southwest started bucking their historically no-frills trend in 2024. These add-ons come at a cost and would help the budget carriers collect more revenue. For example, Spirit revamped its premium "Big Front Seat" bundle with more perks like free snacks, alcohol, Wi-Fi, and priority check-in. Frontier added a "business-class-like" cabin where the middle seat is blocked. Southwest plans to deploy new premium extra legroom and front row seats in 2026. It will also start charging for checked bags in May for the first time in its 50-year history, though loyalty and elite status holders will still keep the perk. Those investments likely won't show up until at least the third-quarter results, analysts said. "There was a better way to maximize the revenue per square foot in the aircraft, which is the whole game here," Southwest CEO Bob Jordan said in Thursday's earnings call on adding premium seating. Delta earned $5.4 billion in revenue from its economy seats and $4.7 billion from its premium cabins during the first quarter. That means its premium cabin revenue was equal to 88% of the economy class revenue despite taking up much less real estate inside the plane. Those are the types of returns the low-cost airlines and their investors hope to get a taste of. Expected second-quarter revenue from Delta and American ranges from down 2% to up 2%, while Southwest expects flat performance or a decrease of as much as 4% year-over-year. Frontier's stock is down about 55% year to date, and Southwest is down 21%, outpacing the broader market. Both have pulled their full-year guidance. Spirit shares will begin trading again on April 29 after the airline emerged from Chapter 11 bankruptcy in March.
Yahoo
20-02-2025
- Business
- Yahoo
After pullback, American Airlines says it will fly more out of O'Hare this year
American Airlines is planning to boost flying capacity out of O'Hare International Airport this year, marking a departure from the airline's pullback at its Chicago hub in the aftermath of the COVID-19 pandemic. The carrier will fly to nine new domestic and international cities from Chicago in 2025 and use larger planes, American announced Thursday. The service additions will mean American is scheduling 25% more seats out of Chicago this summer and 22% more flights than last year, according to the airline. All told, the airline said it would have more space on flights out of Chicago than ever before. That is likely welcome news for Chicago, where O'Hare is a key driver of the city's economy. American, one of the airport's two main carriers, appeared to focus instead on other cities as O'Hare's recovery from the pandemic lagged, scheduling fewer seats on fewer flights through fall 2023 than it did the year before. Coming out of the pandemic, American focused on hubs in the southeast, where demand was returning, according to the carrier. Chicago has also traditionally seen a healthy amount of business travel, which was slower to return than leisure. Around the same time, a major overhaul of O'Hare's terminals became mired in months of contentious negotiations when American and United airlines pushed back against rising construction costs. The city and airlines in spring 2024 agreed to change the order of construction, paving the way for the project to move forward. American is now focusing on growing in its northern hubs, executives said during a call with reporters and analysts in January to present the carrier's fourth-quarter earnings. The airline is working to add back use of smaller, regional jets, which is likely to benefit Chicago and the Philadelphia market, CEO Robert Isom said. 'Our growth in 2025 is focused on improving our schedule in markets that are not yet fully restored to historical levels, primarily in our northern hubs,' Chief Financial Officer Devon May said. New cities American will fly to from Chicago this spring and summer include: Bismarck, North Dakota; Boise, Idaho; Colorado Springs, Colorado; Hyannis, Massachussetts; and Spokane, Washington. New international cities include Halifax, Madrid and Naples. In the fall, American will begin flying from O'Hare to Honolulu, Hawaii. 'Strengthening our network is a promise to our customers that we'll continue to provide exceptional service to the places they want to go,' said Ben Humphrey, vice president of American's O'Hare operations, in a statement. 'And it reinforces to our partners and stakeholders that we'll be an economic driver for the region well into the future.' Some of the new flights will be on regional jets, but all flights from O'Hare will have premium cabins, American said. The carrier will also add more service to Florida and other southeast cities that are popular for vacations. 'Investments like this are key to preserving Chicago's status as a world-class destination and ensuring the airport remains one of the biggest economic engines in the region,' Chicago Mayor Brandon Johnson said in a statement.
Chicago Tribune
20-02-2025
- Business
- Chicago Tribune
After pullback, American Airlines says it will fly more out of O'Hare this year
American Airlines is planning to boost flying capacity out of O'Hare International Airport this year, marking a departure from the airline's pullback at its Chicago hub in the aftermath of the COVID-19 pandemic. The carrier will fly to nine new domestic and international cities from Chicago in 2025 and use larger planes, American announced Thursday. The service additions will mean American is scheduling 25% more seats out of Chicago this summer and 22% more flights than last year, according to the airline. All told, the airline said it would have more space on flights out of Chicago than ever before. That is likely welcome news for Chicago, where O'Hare is a key driver of the city's economy. American, one of the airport's two main carriers, appeared to focus instead on other cities as O'Hare's recovery from the pandemic lagged, scheduling fewer seats on fewer flights through fall 2023 than it did the year before. Coming out of the pandemic, American focused on hubs in the southeast, where demand was returning, according to the carrier. Chicago has also traditionally seen a healthy amount of business travel, which was slower to return than leisure. Around the same time, a major overhaul of O'Hare's terminals became mired in months of contentious negotiations when American and United airlines pushed back against rising construction costs. The city and airlines in spring 2024 agreed to change the order of construction, paving the way for the project to move forward. American is now focusing on growing in its northern hubs, executives said during a call with reporters and analysts in January to present the carrier's fourth-quarter earnings. The airline is working to add back use of smaller, regional jets, which is likely to benefit Chicago and the Philadelphia market, CEO Robert Isom said. 'Our growth in 2025 is focused on improving our schedule in markets that are not yet fully restored to historical levels, primarily in our northern hubs,' Chief Financial Officer Devon May said. New cities American will fly to from Chicago this spring and summer include: Bismarck, North Dakota; Boise, Idaho; Colorado Springs, Colorado; Hyannis, Massachussetts; and Spokane, Washington. New international cities include Halifax, Madrid and Naples. In the fall, American will begin flying from O'Hare to Honolulu, Hawaii. 'Strengthening our network is a promise to our customers that we'll continue to provide exceptional service to the places they want to go,' said Ben Humphrey, vice president of American's O'Hare operations, in a statement. 'And it reinforces to our partners and stakeholders that we'll be an economic driver for the region well into the future.' Some of the new flights will be on regional jets, but all flights from O'Hare will have premium cabins, American said. The carrier will also add more service to Florida and other southeast cities that are popular for vacations. 'Investments like this are key to preserving Chicago's status as a world-class destination and ensuring the airport remains one of the biggest economic engines in the region,' Chicago Mayor Brandon Johnson said in a statement.
