United released its latest third-quarter guidance yesterday, and it appears to be telling the same story as a lot of recent data: it’s still rough out there, but things might be improving a bit.
On the revenue side, things look a bit better. Mainline PRASM is expected to decrease 17.8-18.8%, and consolidated PRASM is forecasted to decline 15.8-16.8% year-over-year. These declines compare favorably to declines of of 19.5% and 17.2% in the second quarter, respectively.
The cost side looks pretty good as well. Earlier this year, United was predicting CASM ex-fuel and profit sharing would either be flat, or up a maximum of 1%. The airline is now predicting a decrease of 0.5-1%.
What continues to impress me with United is how the regionals have picked up so much flying. Year-over-year mainline capacity in terms of ASM will be down about 8.4% in the third quarter, but regional ASMs will be up 15.2%. But, I guess that’s what happens when you eliminate a big chunk of the narrowbody fleet.
In terms of cash, United expects to have $2.6 billion at the end of the quarter, and the company says that it “has other liquidity initiatives underway that it expects to complete in the fourth quarter.”
More light should be shed on the revenue situation when the ATA releases yield data next week. Improvements in PRASM look good, but that statistic isn’t just a measure of revenue, it also shows how well the airlines are measuring capacity.
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