Barclays on U.S. Airlines: May RASM Preview

Barclays on U.S. Airlines: May RASM Preview

Barclays analyst says, "Airlines should begin reporting May traffic and RASM results tomorrow. Many of the data points were previewed and current bookings are volatile by any account. In a backdrop of macro uncertainty, we are unsure how much "day of" impact these numbers can have. However, we do expect them to showcase an industry that is adapting exceptionally well to rapidly rising fuel and one that seemingly deserves much better equity valuations. We think UAL could surprise modestly to the upside for May, which could focus the market on UAL's longer-term revenue potential, which we continue to believe is materially underestimated.

"Expected May RASM results are as follows: U.S. Airways (NYSE: LCC): + 10-12% (company guidance for 'double digit' gain); United Continental (NYSE: UAL): + 10-12%; Southwest (NYSE: LUV): + 8-9% (recent guidance, but for heritage LUV only, excludes AAI); JetBlue (Nasdaq: JBLU): + 15-17% (company guidance) Allegiant Travel (Nasdaq: ALGT): + 21-23% For the ATA composite, which is expected to report on June 20th, we expect a May RASM gain of + 11-12%."

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