Thought this was an interesting analysis. The bold part was particularly surprising. Definitely different approach to this recovery from our major competitors. Hope our guys know what they’re doing.
Today, Wolfe Research airline analyst Hunter Keay provided investors his take on the differing strategies of airlines during the recent uptick in demand. Here are a few excerpts:
- U.S. airlines are taking different approaches to managing through Covid-19. AAL is adding back capacity far faster than UAL and DAL, gearing towards a revenue-based recovery. This June AAL is flying 158% more domestic seats than UAL and 49% more than DAL. And LUV will fly 270% more than UAL and 114% more than DAL. That is astonishing, and we don’t know how long it can last. LUV can withstand pretty much anything but AAL is tying its fate to an unknown demand recovery as they add back cuts and pull ~200 planes out of storage in June/July, including at least 18 widebodies. We do not expect UAL and DAL to stand around and watch.
- AAL’s June 2020 domestic capacity is 158% more than UAL’s capacity, on a seat basis. Assuming AAL continues to cancel minimum flights each day (from what we can tell, they are canceling ~80 flights/day so far this month, for perspective), AAL will fly 6.5M domestic seats in June compared to UAL’s 2.5M and DAL’s 4.4M. The 4M seat count difference between AAL and UAL’s seat capacity in June equates to the total combined domestic seat output of ALK, JBLU, HA, SAVE, and Sun Country. LUV and AAL combined account for 53% of domestic seat supply in June.