Insight: US Airline Performance through Feb 2022

A useful database to watch is the US DoT's T-1. It summarizes the T-100 traffic data reported by U.S. air carriers. We take a deep dive and share our thoughts on what we see in the data. Here's the model. Remember to click the double-headed arrow at the bottom right for optimal viewing on your monitor. Notes: Page 1 - Click on any ball to see how it moved over the period. Bear in mind that 2022 is through February. Breeze data is being reported and we are tracking them. Not because they are significant yet, but because Mr. Neelelman has a reputation. Breeze won't stay small. You will notice them on page 1 at the bottom left corner. They barely make it to the chart. Click the play button at the bottom left corner to watch history play out. Page 2 - Tracks traffic volumes and average flight times. The 2021 traffic recovery was quite robust Flights took loner as well. The first two months of 2022 show this trend is continuing. The lower chart displays average flight times and stage length. Click any airline to see how things have changed over time. For example, United consistently operates the longest flights by some margin. This has implications for its operating costs which are time and distance-driven. Is it able to charge extra for this? We don't see that. Page 3 - Tracks number of flights and load factor 2021 saw something of the V-recovery everyone wanted But load factor has not recovered to 2019 levels. The rule of thumb used to be a breakeven load factor was 65%. Clearly, that rule needs updating. Page 4 - Compares average stage length with load factor and the ball size is driven by the number of flights Click the play button at the bottom left corner to watch history play out. The dashed lines are averages for the industry over the entire period Page 5 - A busy page! The first chart top left shows the number of passengers per flight in the most current period (Feb 2022) and the sparkline shows the trend of this over the period. The red dot shows the trend high. The color shows the relative loads, the greener the more passengers per flight. Breeze shows up red because they have the lightest loads - about half the industry level. The second chart to the top right shows the market share of airlines over time. Since this industry is economy of scale driven, market share is a "thing". If you doubt that, ask why JetBlue is so keen to acquire another airline and they have missed twice so far. Driving down seat costs requires volume. Alaska may have overpaid for Virgin America, but they can grow that volume over time. The Frontier/Spirit deal comes with the same thinking. The chart at the bottom left shows the trend of passengers per flight over time by the airline. Notice the growth at Breeze and keep watching it when we update the chart. The ULCCs are doing best here. The chart bottom right shows the load factor over time. Historically (pre-2020) the industry was mostly over 80% and doing well. The pandemic shock was catastrophic. Even with the 2021 recovery, things are not yet back to "normal". 2022 looks weak because the data is through winter - it'll get better by June. By the way, look where Breeze is. They have been adding aircraft faster than they can get traffic. Expect some creative new markets to fix that. Page 6 - Essentially a summary page. The chart is the most interesting feature here. Up to 2019, we see a steady rise in pax/flight with a stable load factor. Bigger aircraft were being deployed (A321 and 737-900) and the industry kept them 80% full. From 2020 we see something different - the load factor is softer and pax/flight is off. There is a need to fix the gauge - right sizing is tough because fleet decisions are long-term plays. The adjustments are going to hurt for a while until traffic volume fully recovers. We hope you enjoy the Insight series - we would appreciate any and all feedback to improve our work.

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