PRISM MarketView Examines Airline Industry Policies, Financial Reports and Consumer Trends
2024年7月31日 - 12:15AM
PRISM MarketView, a leader within the financial markets and news
community, announces the release of an article
highlighting the traveling consumer as airlines began to
announce financial results. Company reports have echoed larger
themes related to higher fuel costs, robust travel demand and lower
fare discounting driven by competition from low-cost
carriers.
American Airlines faced a significant decline in profits due in
part to an operational decision to make its corporate customers
book directly from their website, bypassing travel agencies. The
world’s second-largest carrier acknowledged that this booking
policy posed a challenge to many corporate passengers and travel
agencies. Despite citing record second-quarter revenue, profits
were down nearly 50%. This decline is partly attributed to an
imbalance of supply and demand, with the backfire from American's
booking policy further contributing to the decrease in profits.
Travel agencies have spoken publicly regarding the difficulties
created by the previous rule change. “To assume that all customers
prefer to buy direct through AA.com is arrogant at best,” wrote the
American Society of Travel Advisors (ASTA) in a statement. This
policy impacted many travel agencies across the United States,
leading American Airlines to retract the new policy, claiming,
“they dug themselves into a hole.” PRISM MarketView spoke to Steven
P. Taggart, Director of Business Development at the Charlotte-based
travel agency, Corporate Travel Management (CTM). Taggart stated,
“Despite the challenge presented by American, we continued to
successfully execute our operations and provide best-in-class
customer service to all clients. We agree with American’s decision
to retract its former policy change which should allow travel
agencies to satisfy customers and operate in a more efficient
manner, as they had previously.”
Low-cost carriers have also reported financial results that
included new travel policies and consumer demand trends. Southwest
Airlines ended its 53-year open seating tradition and introduced
red-eye flights in the announcement of its second quarter financial
results that beat analyst consensus but reported a decline in
profits. Management stated, "We are taking urgent and deliberate
steps to mitigate near-term revenue challenges and implement
longer-term transformational initiatives that are designed to drive
meaningful top and bottom-line growth. As we announced this
morning, our implementation of assigned and premium seating is part
of an ongoing and comprehensive upgrade to the Customer Experience,
one that research shows Customers overwhelmingly prefer.”
Spirit Airlines provided second quarter guidance as they lowered
their outlook on weak non-ticket revenue. Spirit projected $1.28
billion of second quarter revenues versus previous revenue estimate
range of $1.32 billion – $1.34 billion and missed consensus
(FactSet $1.33 billion). However, the estimated ticket revenue per
segment remains intact with previous expectations. The
underperformance in non-ticket revenue is being attributed to
incremental pressure on ancillary pricing as competition heats up
and consumers no longer care to spend extra on baggage and
food.
Read the full article at:
https://prismmarketview.com/what-was-american-airlines-thinking-additional-airline-earnings-echo-previous-industry-trends-as-southwest-assigns-seats/
About Corporate Travel Management, Inc. (CTM):
Founded in 1990, Corporate Travel Management, Inc., is a
full-service travel management organization that combines
first-class service with the industry’s most progressive
technologies. Our goal is to create a truly exceptional experience
for our client’s and their travelers. Visit us at
www.goctm.com and follow us on
LinkedIn.
About PRISM MarketView: Established in
2020, PRISM MarketView is dedicated to the monitoring and analysis
of small cap stocks in burgeoning sectors. We deliver
up-to-the-minute financial market news, provide comprehensive
investor tools and foster a dynamic investor community. Central to
our offerings are proprietary indexes that observe emerging
sectors, including biotech, clean energy, next-generation tech,
medical devices and beyond. Visit us
at prismmarketview.com and follow us
on Twitter.
PRISM MarketView does not provide investment advice.
Contact:PRISM
MarketViewinfo@prismmarketview.com
646-863-6341