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May23
Revenues Up for Carriers in US Despite Major Losses
U.S. airlines posted a near 14 percent increase in revenue taken in per available seat mile in April, with the biggest boost coming from a strong performance in domestic markets.

Revenue per available seat mile (RASM) rose 13.8 percent systemwide, compared with a 1.3 percent gain in April 2005, according to an analyst who received the data on Monday from the Air Transport Association, an airline trade group. The ATA does not release the data publicly.

In domestic markets RASM was up 17.6 percent in April, compared with a flat reading in the same period a year earlier. Internationally, RASM was up 6.8 percent, compared with a 5.8 percent gain in April 2005.

James Baker, an airline analyst at JP Morgan, wrote in a research note that domestic demand shows no signs of slowing. He said that, despite inflation concerns and soaring fuel prices, airlines managed to boost revenue by reducing capacity, or the number of seats for sale.

"Given tight seat supply, airlines continue to successfully wave off price-sensitive demand in favor of higher-yielding travelers, a phenomenon which shows no evidence of abating," he said.

The ATA data show domestic capacity declined 5.1 percent in April. On international routes, airlines increased capacity by 5.4 percent. Some major carriers have been shifting capacity from highly competitive domestic markets to more lucrative international routes.

Reuters.com

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