American Airlines Traffic Boosts Stock to New High

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The world’s largest airline as measured by traffic announced on Monday that passenger traffic rose by 3.8% in January. Based on one month of actual data and two months of forecast data, American Airlines Group Inc. (NYSE: AAL) expects revenue per available seat mile to rise 2% to 4% year-over-year in the first quarter of 2014.

Domestic traffic rose 2.9%, while international traffic rose by 6.7%. Regional traffic was off by 0.1%. All comparative data represents the combined totals of American and U.S. Airways in January of 2013.

American’s capacity grew by 2.3%, and the airline’s load factor rose from 79.1% in January a year ago to 80.3% this year. The company’s domestic Pacific routes saw the biggest jump in load factor, up 5% year-over-year. Regional load factor rose 3.9%, from 70.7% to 74.6%.

Because the company’s traffic is rising faster than its capacity and its load factors are also increasing, we should look for some margin and profit growth when American reports first-quarter results sometime in April.

Delta Air Lines In. (NYSE: DAL) reported January traffic results last week. Revenue seat miles rose 4.5%, after adjusting for flight cancellations due to weather, and 5% without the adjustment. The airline had to cancel nearly 4,000 flights out of its Atlanta hub due to severe winter weather.

United Continental Holdings Inc. (NYSE: UAL) has not yet reported January numbers, but it posted a gain in revenue seat miles of 4.1% in December as capacity rose by 0.5% and load factor rose by 3%.

American’s stock price was up 1.3% at $36.15 in early trading, a new 52-week high, compared with the prior range of $12.70 to $35.70.

American was also pulling United and Delta up Monday. United shares were up 0.55% shortly after the opening bell, at $45.71 in a 52-week range of $25.26 to $49.20. Delta shares were up about 0.3% to $31.73, in a 52-week range of $13.16 to $32.92.

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