US airlines see slow recovery on horizon

US airlines presenting at yesterday's JP Morgan Aviation, Transportation & Defense Conference in New York (presentations available via webcast) agreed that they see signs of a nascent industry recovery but that they will maintain cost and capacity discipline for now. "We're clearly seeing signs of economic recovery and premium and corporate travelers returning," UAL Corp. CFO Kathryn Mikells said, adding, "The return of higher quality traffic, combined with the significant reductions in capacity that we undertook in 2009, has really begun to improve our relative revenue results." American Airlines Executive VP-Finance and Planning and CFO Tom Horton said first-quarter mainline passenger RASM will be up 6.5%-7.5% year-over-year, while Continental Airlines Chairman, President and CEO Jeff Smisek said CO is "seeing business travel begin to return." Delta Air Lines agreed that corporate sales trends are improving, though its system capacity at the end of the first quarter will be down 4%-5% year-over-year. President Ed Bastian said DL will "continue to maintain that level of capacity restraint."

From the low-cost sector, Southwest Airlines said it is taking a slow approach to expanding in new markets, remaining focused on improving profitability rather than increasing fleet size. CFO Laura Wright said SWA wants additional slots at New York LaGuardia and that it will be filing comments in the next few weeks to express interest. "We don't have an expectation to have 100 flights a day at LaGuardia, but we know we've got demand for more than the eight that we have today," she said. Slots might become available if US Airways and Delta proceed with their slot swap agreement. AirTran Airways said it expects capacity growth of 3%-4% over the next year owing to higher utilization and will maintain a conservative fleet plan for the "next couple of years." It expects to take delivery of seven aircraft over the next year. JetBlue Airways has decided to take four A320s in 2011 rather than the eight previously planned, along with five E-190s, according to the Associated Press.