Expedia reports on holiday airline booking trends
Fares on domestic flights are higher this year than a year ago, despite an increase in capacity across the sector, according to a forecast from Expedia EXPE.
Thanksgiving flights showed a 17% increase on average to $467, while Christmas flights were up 2% to $493.
A total of 21M Americans are expected to fly between October and December.
The outlook could calm some fears that bookings or pricing are off with Ebola concerns cropping up in the U.S.
American Airlines has been accused of hitting the panic button too early on a Thursday evening flight from Dallas-Fort Worth to Chicago after a woman became sick on the plane. Flight attendants allegedly kept the woman, who threw up in the aisle, holed up in the plane’s bathroom over fears that she might have had Ebola, witnesses have said. However, the airline denies that the crew reacted because of a concern for the virus, according to the Houston Chronicle.
"[The flight crew] told her to stay in the bathroom, and she stayed in the bathroom,” Martha Selby, a University of Texas professor and a passenger on the flight, told the Chronicle. “They said, 'We can't let you out.’” The passenger remained in the bathroom for 45 minutes, until the plane landed.
The flight attendants asked the woman, who was black, where she had traveled, Selby said. Some have suggested that the Ebola epidemic in West Africa has fueled racial profiling abroad and led to several instances of black people who become ill in public being treated as if they have Ebola. Selby described the event on American Airlines Flight 2325 as “out of control” and blamed the “hype” over Ebola for prompting the crew to keep the woman in the aircraft’s lavatory.
Emergency personnel boarded the airplane after landing, removed the sick passenger and wrapped her things in plastic, according to the Chronicle. The other passengers were asked to remain in their seats.
American Airlines responded that the crew did not react because they thought the woman had Ebola, nor did they lock her in the bathroom against her will. "There were no concerns related to Ebola," an American Airlines spokesperson told the Chronicle. "Our crew saw a very sick woman that probably had food poisoning or something. She was so sick that she asked to remain in the lavatory for the duration of the flight."
The hysteria over the Ebola outbreak in West Africa has led to several false alarms in the U.S., including hospital patients with symptoms similar to those of Ebola whose diagnoses came back negative. The virus has been largely limited to West Africa and is known to have infected only two people in the U.S. Both U.S. cases were related to the Liberian national Thomas Eric Duncan, who died earlier this month in Dallas after traveling to America with the virus.
Frontier air plane flew well over a 1000 people before the flight was grounded & clean. So there is that chance that someone might catch the Ebola virus.
Craig Hodges, CEO of Dallas-based Hodges Capital, among the investors who agree. His firm owns Delta, American and United Continental in the $542 million Hodges Fund, and American, Hawaiian Airlines and Spirit Airlines SAVE +3.1% in its $1.7 billion Small Cap Fund, and has been buying through the recent battering.
“I do believe these stocks have been going down because of the fear [around Ebola],” says Hodges, and his firm thinks they should actually be rising because Wall Street’s current estimates aren’t factoring in the drop in jet fuel prices that comes along with the recent slide in oil prices.
With West Texas crude below $83 a barrel and Brent just barely higher at slightly under $86, jet fuel costs are falling. That helps companies across a variety of industries that count fuel as a critical cost — think FedEx FDX -1.23% and UPS — but in particular the airlines.
“We’ve seen the energy group get hurt, but the companies in areas that benefit haven’t responded,” says Hodges. His favorite airline at the moment is American, which goes for about 6 times 2015 earnings estimates and, most importantly, hasn’t hedged its jet fuel costs. That means that while rivals have to subtract the cost of hedges from any benefits generated by lower prices, American enjoys all the benefit.
“We’ve been in there buying this week in the $20s,” Hodges adds.
For the December quarter, the overall revenue environment remains solid, with unit revenues expected to increase by 0-2%, and we are on track to produce another quarter of good top line growth, margin expansion and free cash flow," said Ed Bastian, Delta's president. "Looking further ahead, our international network provides the largest opportunity for additional margin improvement, as we accelerate our Pacific network restructuring, recalibrate our transatlantic capacity levels, and reap the benefits of our investment in our Latin network."
•Delta's pre-tax income for the September 2014 quarter was $1.6 billion, excluding special items1, an increase of $431 million over the September 2013 quarter on a similar basis. Delta's net income for the September 2014 quarter was $1.0 billion, or $1.20 per diluted share, and its operating margin was 15.8 percent, excluding special items.
•On a GAAP basis including special items, Delta's pre-tax income was $579 million, operating margin was 7.5 percent and net income was $357 million, or $0.42 per diluted share.
•Results include $384 million in profit sharing expense in recognition of Delta employees' contributions toward achieving the company's financial goals, which makes a year-to-date profit sharing accrual of $823 million.
•Delta generated $910 million of free cash flow during the September 2014 quarter. The company used its strong cash generation in the quarter to reduce its adjusted net debt to $7.4 billion and return $325 million to shareholders through dividends and share repurchases.
Delta's operating revenue improved 7 percent, or $688 million, in the September 2014 quarter compared to the September 2013 quarter, driven by continued strength in corporate and domestic revenues. Traffic increased 3.7 percent on a 3.2 percent increase in capacity.
•Passenger revenue increased 6 percent, or $522 million, compared to the prior year period. Passenger unit revenue (PRASM) increased 2.4 percent year-over-year with a 1.9 percent improvement in yield. Seat-related products and other merchandising initiatives increased revenues by nearly $50 million versus the prior year period.
•Cargo revenue increased 7 percent, or $15 million, on higher freight yields and volumes.
On extremely heavy volume. Don't know about u but I am stun that AAL finish up after all the Ebola news broke Dal earnings are good & guided in line AAL will fly tomorrow.
If you fly, for the love of God do not use the restroom. It could be your last pit stop. Then u wouldn't be able to buy anymore BK shares of AAL Lol....
Hell Toad has lost $2 million. Of course it's all make believe trading money. God only knows how much brain dead has lost.
Smart basters! What can the longs do to counter this evil attack? LOl....
AAL ? UAL? DAL? others?
Soon there will be millions of people getting effect by the Ebola virus by Jan. Airlines will fold. Get out while u still can. Not fear,,reality
You can bet your life that this well effect earnings going forward big time. This well take at least a year for this to work out. Wonder which airline will go out of business because of this Ebola out break. Place your bets!
Is this good for airline stocks? Lol....