BusinessBusinessus-airways-american-airlines-mergerAmerican Airlines

U.S. Airways Blames Sequester For Weak Demand In March

Why U.S. Airways Hates The Sequester
Reuters
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In this Thursday, Sept. 27, 2012, photo, US Airways jets are parked at their gates at the Charlotte/Douglas International airport in Charlotte, N.C. Patched together from several scrappy regional carriers on the brink of bankruptcy, US Airways has often been ridiculed within the aviation industry and remains a perennial afterthought among travelers. But it hopes to shed that image by merging with the larger American Airlines, in a deal which will catapult the two to the top of the industry. (AP Photo/Chuck Burton)

* Carrier says sequester reduced last-minute demand

* Delta also cited effects of budget cuts

* US Airways shares down 0.4 pct

April 3 (Reuters) - US Airways Group said on Wednesday that federal budget cuts likely hurt a key revenue measure in March because of reduced last-minute demand for flights.

The carrier said unit revenue, a measure of pricing power and how full planes are, was flat in the month compared with a year earlier. US Airways added that result was lower than expected for March, and cited "reduced close-in demand believed to be driven largely by the sequester."

On Tuesday, Delta Air Lines cut its first-quarter forecast for unit revenue, which is also known as passenger revenue per available seat mile.

Delta had also said March unit revenue fell short of its expectations, citing lower-than-expected bookings due to automatic budget cuts mandated by sequestration and reduced demand as a result of attempts to raise prices.

US Airways, which plans to merge with AMR Corp's American Airlines to create the world's biggest carrier, said consolidated traffic rose 5.2 percent in March as the number of passengers boarded rose 4.1 percent.

Load factor, or the percentage of seats filled, improved to 85.6 percent from 84 percent a year earlier.

Shares of US Airways were down 0.4 percent to $15.67 in morning trading.

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Before You Go

Airlines Charging The Highest Fees
14. Alaska(01 of14)
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> Total additional fees: $331> First checked bag: $20> Book by phone: $15> Unaccompanied minors: $20 (nonstop or direct) / $50 (connecting)Alaska Airlines charges the least amount of fees among the major domestic airlines. It charges just $20 for passengers' first and second bags, lower than many of its peers. Fees on overweight bags (up to 100 lbs) or oversized (up to 80 in.) are just $50, online with well-recognized, low-cost airlines such as Southwest and Jetblue. Despite low baggage fees, the airline is exceptionally profitable. In 2010, 24/7 Wall St. referred to Alaska Airlines as "the industry jewel." Over the last five years, parent company Alaska Air Group, Inc.'s stock price has risen over 245%. In JD Power's 2012 North America Airline Satisfaction Survey, Alaska ranked as the top traditional airline.Read more at 24/7 Wall St. (credit:AP)
13. Southwest(02 of14)
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> Total additional fees: $360> First checked bag: $0> Book by phone: $0> Unaccompanied minors: $50 (nonstop or direct only)Southwest Airlines has earned a reputation as an airline without the ancillary charges of some of the larger carriers in the U.S. It is the only airline on this list that allows domestic passengers to check two bags for free, a fact that is touted by the company's motto of "bags fly free." Southwest is also the only major U.S. carrier not to charge any fees to change a flight, and is one of just three major airlines not to charge a booking fee. Despite all of this, the airline has announced that it is raising certain fees in 2013 in order to raise an additional $1.1 billion in revenue. The airline raised the fees on the third checked bag and overweight bags, among others.Read more at 24/7 Wall St. (credit:AP)
12. Allegiant(03 of14)
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> Total additional fees: $383> First checked bag: $15-$75/segment> Book by phone: $10> Unaccompanied minors: N/AAllegiant Air's additional fees are relatively low because it doesn't offer several amenities that other airlines do, including the escorting of unaccompanied minors and pillows and blankets. However, Allegiant is one of just two airlines, along with Spirit Airlines, to charge for carry-on bags. These fees can range anywhere from $10 to $75 per flight. In addition, Allegiant is one of two airlines that considers bags over 40 lbs to be overweight, compared to the standard 50 lbs for most airlines.Read more at 24/7 Wall St. (credit:AP)
11. Frontier(04 of14)
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> Total additional fees: $431> First checked bag: $20> Book by phone: $0> Unaccompanied minors: $50 – $100 (nonstop only)Although Frontier Airlines is one of 11 airlines with total additional fees of more than $400, customers get a relatively good deal on several extras compared to most airlines. Frontier is one of just three airlines that doesn’t charge customers for booking tickets over the phone or in person. In addition, Frontier charges just $20 for the both the first and second checked bag, both lower than the majority of large U.S. airlines. Even the $50 cost for checking additional bags is significantly lower than most airlines.Read more at 24/7 Wall St. (credit:AP)
10. Virgin America(05 of14)
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> Total additional fees: $447> First checked bag: $25> Book by phone: $20> Unaccompanied minors: $75 - $100 (nonstop only)Virgin America, an airline that began service in the U.S. just over five years ago, has a mixed record with fees. Each checked bag costs passengers just $25, which amounts to significantly less than most airlines for passengers with many bags. It is also among just a few airlines that doesn't charge customers to book a flight in-person. Yet its fees are high in other instances. In order to gain access to more legroom in the airplane's main cabin, flyers will have to cough up a minimum of $39 and up to $129, more than any other airline offering such a service. Although the company's frequent flyer program is based on dollars spent rather than miles accrued, it is only on the base fare without the extra fees.Read more at 24/7 Wall St. (credit:AP)
9. Airtran(06 of14)
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> Total additional fees: $460> First checked bag: $25> Book by phone: $15> Unaccompanied minors: $50 (nonstop or direct only)Southwest Airlines, the parent company of Airtran, announced that it will be raising several Airtran fees in 2013, but didn’t specify which yet. Even before these increases Airtran’s fee structure was not as generous as the parent company’s flagship brand. For instance, although Southwest doesn’t charge any change fees, Airtran charges $75 to change a flight in advance and $25 if it is a same-day flight change. While Southwest doesn’t charge booking fees, Airtran charges $15 for booking over the phone. And unlike Southwest’s “bags fly free” policy, Airtran charges $25 for the first checked bag and $35 for the second.Read more at 24/7 Wall St. (credit:AP)
8. JetBlue(07 of14)
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> Total additional fees: $525> First checked bag: $0> Book by phone: $20> Unaccompanied minors: $100 (nonstop only)JetBlue is considered a low-cost carrier that competes with airlines such as Airtran, Spirit and Southwest. Along with Southwest, JetBlue is the only other airline that does not charge a fee for the first checked bag. However, the company charges $40 for the second bag, more than any other airline in the U.S. except for Spirit. Fortunately for larger passengers, the armrests are 17.8" apart compared to the standard 17". However, those who cannot fit between the seats have to purchase a second seat with no refunds even if the flight is not full. This differs from most airlines where a refund is usually granted if a flight had extra seats.Read more at 24/7 Wall St. (credit:AP)
7. Air Canada(08 of14)
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> Total additional fees: $545> First checked bag: $25> Book by phone: $0> Unaccompanied minors: $100 (nonstop only)For flights between the U.S. and Canada, all of the extra fees could cost Air Canada travelers at least an $545 in addition to base fare. The airline charges a $150 fee in order to change a flight in advance, among the highest rates of all airlines. Although the $25 and $35 charged for the first and second checked bag are about average for all airlines, the $100 fee charged for each additional bag, while not the highest, is higher than most airlines. However, there are bright spots. The airline does not charge any fee to book a flight, one of the few airlines that do not.Read more at 24/7 Wall St. (credit:AP)
6. Spirit(09 of14)
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> Total additional fees: $646> First checked bag: $30-$100> Book by phone: $11-$19/direction> Unaccompanied minors: $100 (nonstop or direct only)Although Spirit is considered a low-cost airline, the company gets a hefty share of its money by charging its customers for extras. Spirit caused a commotion when it decided to charge fees for carry-on bags. The company argued that the carry-on fees would be offset by lower base fares, Spirit considers a bag to be overweight if it is over 40 lbs rather than the typical 50 lbs. Fortunately for travelers, a bag between 41 lbs and 50 lbs costs just $25 extra while bags between 51 lbs and 70 lbs cost an extra $50, considerably lower than most overweight baggage fees. The first checked bag costs a minimum of $30, while the second checked bag costs a minimum of $40, both the highest of all airlines.Read more at 24/7 Wall St. (credit:AP)
5. United(10 of14)
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> Total additional fees: $666> First checked bag: $25> Book by phone: $25> Unaccompanied minors: $99United is one of just three airlines, along with American and US Airways, that charges $75 when a frequent flyer wants to redeem points for a ticket within 21 days of departure. Like most airlines, if a customer isn't able to fit in a seat, he or she has to purchase an additional ticket. Unlike most airlines, however, United will not refund customers for the price of the additional seat if the flight has extra space. Like the other major carriers in the U.S., the company has improved its performance by merging with another company. United merged with Continental Airlines in May 2010, forming United Continental Holdings. It is the largest airline in the world by available seat kilometers, which is the number of available seats times the number of kilometers flown by the airline.Read more at 24/7 Wall St. (credit:AP)
4. Delta (11 of14)
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> Total additional fees: $754> First checked bag: $25> Book by phone: $20-$35> Unaccompanied minors: $100Delta is one of just four airlines that charges additional fees of more than $700. There is a $150 fee in order to change a flight in advance, tied for the highest among all airlines. In order to check a third bag, passengers must cough up $125, among the highest of all airlines. It gets worse. All additional bags after that cost $200 each, more than any other airline. Delta merged with Northwest Airlines back in 2008. The airline is currently the second largest in the world in terms of available seat kilometers.Read more at 24/7 Wall St. (credit:AP)
3. Hawaiian(12 of14)
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> Total additional fees: $766> First checked bag: $25 mainland/$17 interisland> Book by phone: $25 mainland, $15 interisland> Unaccompanied minors: $100 mainland/$35 interislandThe costs of the additional fees for Hawaiian Airlines are very different depending on whether a person is flying interisland or between the islands and the U.S. mainland. For instance, there is only a $30 change fee for people flying interisland, but there is a $150 change fee for those flying between the islands and the mainland. For unaccompanied minors, the cost is just $35 interisland. But for an unaccompanied minor going to or from the mainland, that cost is $100.Read more at 24/7 Wall St. (credit:AP)
2. US Airways(13 of14)
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> Total additional fees: $795> First checked bag: $25> Book by phone: $25> Unaccompanied minors: $100 (nonstop only)US Airways charges its customers nearly $800 in additional costs. While it charges just $25 for the first checked bag and $35 for the second checked bag, in line with most other major airlines, it charges $125 for each additional bag, more than any other airline except for Delta and American. The airline is one of the few that offers blankets and pillows, although the charge is $7. While US Airways reported strong earnings recently, there has been much speculation it would merge with American Airlines soon. The merger would create a larger airline that help the two carriers compete with larger rivals.Read more at 24/7 Wall St. (credit:AP)
1. American(14 of14)
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> Total additional fees: $842> First checked bag: $25> Book by phone: $25> Unaccompanied minors: $100 (nonstop or direct)American Airlines has more additional fees than any other domestic carrier. Checking a third bag costs $150, more than any other airline. Checking oversized bags costs $200, also more than any other airline. These high fees haven’t resulted in strong financial performance for AMR, the airline’s parent company. The company reported a loss of $1.9 billion in 2012 and almost $2 billion the year before. AMR filed for Chapter 11 bankruptcy in November 2011 in order to restructure its high costs. The company’s leadership has repeatedly argued that expenses must be cut in order to remain competitive with other large carriers.Read more at 24/7 Wall St. (credit:AP)
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