Airlines optimistic as they move into 2010
Tuesday, December 15th, 2009You know me…always looking for the positive angle. It’s part of my DNA. (Or how I was brought up if you ever talk to my mother.) .
Regardless of who’s fault it is, I found a very positive article about the airline industry that I wanted to share in Travel Weekly. I did a short piece on Examiner.com just before the Thanksgiving holiday weekend that caught my eye. AirTran was predicting a 5% increase in air travel during the busy travel holiday weekend over last years numbers. Unfortunately, the ATA (Air Transport Association) wasn’t so sure and was predicting a 4 percent decline during the same period.
Much to the delight of Continental, Southwest, JetBlue, Alaska and AirTran, they too saw a significant increase for the entire month of November now that they’ve looked over the data. As a result, the numbers have most in the industry looking at 2010 in a much different light.
Not all the airlines reported an increase for the month. (Namely Delta, American, United and US Airways) However, the entire industry did see a slight uptick of 0.2% across all the airlines for the same period. According to AirTran Senior Vice President and CFO Arne Haak “The worst is behind us” as the industry has been experiencing close to double digit decreases in traffic in 2009. Prior to this current quarter most everyone in the industry has been extremely cautious. The news coming out of New York at the Next Generation Equity Research investors conference was a welcome change. It prompted Delta’s CFO Hank Halter to quote “demand will remain strong” and more executives stating that they are “starting to see more promising traffic and bookings”.
As an additional sign that the tide is starting to turn United ordered 50 new aircraft last week due to some very attractive pricing. (We can’t forget Carnival’s order of two new Dream Class ships last week either.) Like deals clients have seen to fill seats, rooms, and cabins, suppliers are starting to pull the trigger on some attractive deals of their own. Materials and supplies for building both aircraft and ships right now are looking very attractive for those who are willing to go after them.
And that’s exactly what we’re going to need to get us out of this funk we’ve been in. Those who think Government is that answer with it’s “stimulus package” or “bailouts” simply don’t get it. It’s spending in the private sector that stimulates the economy. The transfer of cash from one to another for a product or service.
We didn’t get here overnight, and it’s going to take more than one good month or a few orders to right this ship. But news like this catches the attention of those who have been “thinking” – into actually “doing”. This recession won’t last forever, and the companies who are willing to step out and spend on expanding and building now will be the ones best poised to take advantage of the recovery when it hits it’s full stride.
Regardless of when it happens, it’s good to see news like this and people starting to look at the future in a more optimistic light.
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