CAPA and UATP release CAPA/UATP Americas Airfare & Aviation Report: Aviation Travel Edition

Apr 11, 2016 | Press Release

Las Vegas, 11-Apr-2016 – CAPA and UATP are pleased to announce the launch of the CAPA/UATP Americas Airfare & Aviation Report: Aviation/Corporate Travel Edition.  The report is the first in-depth report in the North American aviation industry, covering capacity and airfare benchmarks for the top 10 routes in the US and Canada. The report includes specialised airfare benchmarking analysis utilising fare data from UATP, complemented by aviation insights from CAPA.

Launching the report at the CAPA Americas Aviation Summit before some 220 aviation industry leaders, CAPA Executive Chairman Peter Harbison said, “Monitoring industry performance by regular comparisons of fares, against the context of broader developments, is an invaluable tool for airlines, airports and all those affected by air travel.”

“CAPA is delighted to join with UATP in this milestone report. We hope it will prove useful for industry and stakeholders alike,” he said.

UATP President and CEO, Ralph Kaiser, commenting on the release of the report, said: “UATP is pleased to be partnering with CAPA to provide fellow aviation industry members with a wide range of important industry data; we look forward to sharing it with our airline network.”

Key conclusions of the Americas Airfare & Aviation Report: Aviation/Corporate Travel Edition report included:

  • Significantly lower fuel costs should again drive record profitability for North American airlines in 2016, but pricing softness remains a looming threat as every carrier operating in the region plans capacity expansion;
  • Data provided from UATP showed an average decline of 15.25% in ticket prices during 4Q2015 as compared to 4Q2014. The largest pricing movements were seen on Chicago O’Hare to New York (La Guardia) with a fall of 27.04%, followed by Los Angeles to Dallas with a decline of just over 25% though core trunk routes remained steady;
  • The planned increases in capacity, coupled with negative passenger unit revenue growth that is projected to last through at least 1H2016, are driving down valuations of North American airlines even as those companies are posting record profits;
  • Investors remain unconvinced airlines operating in North America have truly transformed to build durable business models capable of withstanding the inevitable exogenous shocks that rattle the industry;
  • The dichotomy of record airline profits and sustained investor trepidation is likely to linger in the North American market for the foreseeable future. With no frame of reference to ensure those companies have an ability to sustain their profitability, valuations could continue to suffer.

The 49-page report is now available for download at http://centreforaviation.com/UATPreport.

For more information, please contact Blake Moore, Industry Analyst, CAPA on bmoore@centreforaviation.com.