Barclays on U.S. Airlines: Capacity Tracking 9/19/2011

Barclays on U.S. Airlines: Capacity Tracking 9/19/2011

Barclays analyst says, "Recently, Southwest (NYSE: LUV) began to publish its coordinated schedule with AirTran. The carrier is attempting to optimize its network after the merger, and as a result, some routes are being eliminated, while others face capacity cuts that are used to fund growth in other LUV markets. Our analysis shows that the net impact of changes to LUV's 1Q12 network is beneficial for Alaska Air (NYSE: ALK). However, other carriers are expected to see an increase in competitive capacity as a result of LUV's changing network, with AMR (NYSE: AMR) seeing the most incremental competition."

"Schedules for the current month of September are unchanged, however, they point to capacity reductions of approximately 1% in the domestic region, consistent with reductions that carriers have been planning for the Fall. Near months continue to point to downward revisions as carriers trim their schedules by 10-30 bps in October and November."

"Schedules continue to show domestic and international capacity reductions in the near months of October and November, with the largest cuts from AMR in October. US Airways (NYSE: LCC) adds domestic capacity in December, especially on transcontinental routes from Charlotte and Philadelphia, while JetBlue (Nasdaq: JBLU) continues to add international capacity in Boston."

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