Business Travel News - June 8, 2009 - (Page 10)

AIRLINES BETWEEN THE LINES Frontier Airlines last year filed for Chapter 11 bankruptcy protection and, following delisting on the Nasdaq, suspended common stock trading on April 22, 2008.The carrier late last month released unaudited annual results for the fiscal year ending March 31, reporting a net loss of $248.2 million, which includes bankruptcy reorganization costs. The carrier said it earned $1.13 billion in passenger revenue in its fiscal year. Frontier said its report was “prepared in a format different from that used in our consolidated financial statements filed under the securities laws. Accordingly, we believe the substance and format do not allow meaningful comparison with its regular publicly disclosed consolidated financial statements.” The Department of Transportation’s Bureau of Transportation Statistics reported the total number of scheduled passengers on U.S. airlines declined by 3.5 percent in 2008—with 4.3 percent fewer domestic and 1.2 percent more international passengers than in 2007. BTS reported Southwest Airlines carried “more total system passengers in 2008 than any other U.S. airline for the second consecutive year,” while American Airlines carried the most international passengers to and from the United States last year for the 19th consecutive year. Atlanta HartsfieldJackson International last year again boarded more passengers than any other U.S. airport. American Airlines United Airlines Delta Air Lines* Continental Airlines Southwest Airlines US Airways Alaska Airlines JetBlue Airways AirTran Airways DOMESTIC CARRIER STATISTICS 2008 PASSENGER REVENUE ($000) 18,234,000 15,337,000 15,137,000 11,382,000 10,549,000 8,183,000 3,356,000 3,056,000 2,414,000 2008 NET EARNINGS Southwest Airlines JetBlue Airways Alaska Airlines AirTran Airways Continental Airlines American Airlines US Airways United Airlines Delta Air Lines* ($000) 178,000 -76,000 -135,900 -273,829 -585,000 -2,071,000 -2,210,000 -5,348,000 -8,922,000 *Delta’s 2008 results only include Northwest Airlines data after their Oct. 29, 2008, merger. ABOUT THESE CHARTS The accompanying charts list domestic and international airlines with more than $1 billion in annual passenger revenue and that are certified by the U.S. Department of Transportation. Cargo and charter-only airlines are excluded, as are those that do not report financial results or have not yet reported 2008 financial or operational data. Regional carriers that primarily feed larger airlines and other smaller carriers also are excluded. The 2008 sales rank is based on passenger revenues for 2008, excluding charter operations. Net earnings include all one-time and exceptional items and are after tax, except where noted. Charts are based on year-end Dec. 31, 2008, data except where noted. All figures were converted from local currencies to U.S. dollars, using Dec. 31, 2008, conversion rates, except where noted. The number of aircraft represents the fleet size as of Dec. 31, 2008, including wholly owned subsidiaries. Business Travel News collected information from company officials, company financial reports, Securities and Exchange Commission filings, airline alliance reports, the International Air Transport Association and analyst reports. U.S. Airlines Swap Fuel Prices For Demand Crisis By Jay Boehmer U.S. airlines ended 2008 in a much smaller and less profitable industry than the one that they entered, dropping about 9 percent of capacity, watching seven smaller airlines liquidate, shedding nearly 28,000 full-time jobs and approaching $20 billion in net losses. The year began with mounting oil costs, which reached a crescendo of nearly $150 a barrel in July, then as fuel spiraled downward, the sustained recession sent demand along. “Looking back at 2008, the environment was very challenging throughout the year,” said Continental Airlines CEO Larry Kellner during the carrier’s full-year earnings call this January. “Crude oil prices were extremely volatile, peaking as high as $147 per barrel in July, and then dropping to a low of $32 per barrel in December. Add in the revenue environment deteriorating as the economy weakened, and you have an operating backdrop that rivaled any we’ve seen in our industry for many years.” U.S. carriers spent 2008 recalibrating to combat fuel costs through efficiency gains, capacity cuts, headcount reductions and ancillary revenue initiatives, which made them better prepared to weather the economic crisis. Yet the profit outlook for 2009 remains bleak. “In effect, we’ve swapped the oil prices of 2008 for the travel demand crisis of 2009,” American Airlines CEO Gerard Arpey told investors in a firstquarter earnings call in April. “We are also facing disruptions in the capital markets and, like the recession and resulting decline in travel demand, the tightening of the credit markets is a challenge, not only for American but for the entire industry and other industries as well.” Topping labor as the airlines’ largest expense in 2008, fuel cost was the biggest driver of airline losses last year. Noting that every dollar increase in a barrel of fuel adds $448 million in expenses to carriers’ bottom lines, the Air Transport Association noted the cost of fuel was between 30 percent and 40 percent of total operating expenses for most carriers last year—well above the historical range of 10 percent to 15 percent. Airlines spent $15.9 billion more on fuel in 2008 compared with 2007, Continued on page 12 10 June 8, 2009 • www.BTNonline.com • BUSINESS TRAVEL NEWS BUSINESS TRAVEL SURVEY 2009 http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - June 8, 2009

Business Travel News - June 8, 2009
Contents
Agencies, Corporate-Owned
Airlines
Car Rental Companies
Chauffeured Transportation Companies
Corporate Payment Systems
Hotel Companies

Business Travel News - June 8, 2009