American, United reports show steady traffic, lower fares

American, United reports show steady traffic, lower fares

Reports from American Airlines and United Airlines show that air travel demand is growing modestly and there aren’t many empty seats, but average fares continue to decline.

American Airlines Group Inc. said Tuesday that it continued to expect a key revenue measure to fall by 6 per cent to 8 per cent in the first quarter.

That mirrored a report late Monday from United Continental Holdings Inc., which saw the same drop in the revenue figure. United said lower average prices and a downturn in travel among people affected by the oil industry slump contributed to the drop in revenue for every seat flown one mile.

Investors pay close attention to that revenue figure, which falls when airlines sell fewer seats or cut average fares. The figure dropped throughout 2015, and Delta Air Lines Inc. said last week that it fell by 3 per cent in January, partly because the strong U.S. dollar hurt foreign sales.

Southwest expects first-quarter operating revenue per mile to be about flat with a year ago.

Southwest’s traffic jumped 11 per cent. Delta’s January traffic rose nearly 4 per cent, American saw a 1.6 per cent uptick, and United said passengers flew about the same number of miles as they did a year earlier. All four filled a higher percentage of seats than they did in January 2015.

In morning trading, shares of American were up 43 cents to $35.98; United was up 32 cents to $46; Delta rose 91 cents to $41.69; and Southwest rose 88 cents, or 2.5 per cent, to $35.60.

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