Airline Economic Analysis 2014
US airline performance was strong enough in the past year to raise the question: Is the airline business becoming a “regular” business, with sustainable profits?
Both network and value carriers achieved their best margin performance of the past decade – the result of healthy demand, stable fuel prices, capacity restraint, and an ample supply of slim-line seats, according to Oliver Wyman’s Airline Economic Analysis 2014. Strong revenue growth was accompanied by flat costs, as increases in labor were largely offset by lower, and relatively stable, fuel costs.
The increase in domestic revenue per available seat mile, or RASM, during the year ending June 2014 was unusually strong, outpacing the increase in international RASM and halting the trend of network carriers relying largely on their international operations for revenue growth. Although value carriers continued to earn higher margins on domestic service, network carriers made substantial progress in turning their historically low-margin or loss-making domestic operations into a profitable business.
Oliver Wyman releases this year’s reference analysis to coincide with the Raymond James Transportation Conference on November 6, 2014. The report includes extensive aviation data analysis, including more than 55 charts based on PlaneStats.com data.