Data has revealed despite slumping demand for travel, US Airlines saw their planes flying full due to downsizing their operations. Capacity cuts resulted in an upsurge in unit revenue at Continental Airlines in addition to reflecting a rare stability for its business that was seen under crucial financial crisis a year ago.
Morningstar analyst Basili Alukos observed, "I can"t see any of the airlines filing for bankruptcy unless you see demand drop like 30 percent. I think they"re in a lot stronger shape. Prices have come up across the whole spectrum.â
Clawing their way out of a downturn due to high fuel prices during the first half of 2008, most airlines were compelled to reduce the number of seats for sale during the second half in an effort to improve efficiency and support fares. However, plummeting oil prices from July insulated the carriers from the economic difficulties that challenged other industries.
The data reported by Continental showed a 6.7 percent year-over-year drop in December traffic due to a capacity reduction of 8.1 percent. The carrier said that its December unit revenue increased between 4 percent and 5 percent for its mainline operations. Continental is the only carrier among major airlines to publish monthly unit revenue figures.
Also, United Airlines and American Airlines said though their traffic fell in December due to decline in capacity, their planes were fuller when compared to a year ago.
