* Flight cancellations aid key revenue measure
* Analyst cuts profit estimates for some carriers
March 10 Major U.S. airlines on Monday said
cancellations of thousands of flights would hurt first-quarter
profit, but some added that revenue would still show
Flight cancellations tend to add to airline costs during the
first quarter, when winter storms hit the hardest. Five U.S.
carriers - Delta Air Lines Inc, American Airlines Group
Inc, JetBlue Airways Corp, Southwest Airlines
Co and United Continental Holdings Inc - said
that winter storms had led to more than 78,000 canceled flights
Some airlines cited a noticeable increase in their canceled
flights tied to bad weather this year, with American Airlines
saying its 28,000 cancellations for January and February more
than doubled from the year earlier.
Delta said that as of the end of January, its cancellations
from bad weather had topped all of those for 2013.
Delta told a J.P. Morgan investor conference disruption from
winter storms hurt revenue for the current quarter by $90
million as it canceled 17,000 flights. The storms dented pretax
profit for the quarter by about $55 million, Delta added.
The carrier said it expected operating margin, a measure of
income to costs, of 6.5 percent to 7.5 percent for the first
quarter, compared with a prior view of 6 percent to 8 percent.
Cancellations can help unit revenue, an important measure of
pricing power and how full planes are, as more travelers are put
on remaining flights.
Delta said unit revenue would rise 3 percent to 4 percent in
the current quarter, compared with its prior view of a 2 percent
to 4 percent increase. American added it still expected unit
revenue to rise about 2 percent to 4 percent in the period.
United said it halted 23,000 flights tied to weather in the
first two months of 2014. The company had disclosed last month
that disruption from the storms would hurt first-quarter unit
JetBlue told the same conference it canceled nearly 4,000
flights because of the winter storms, and Southwest said it
halted about 6,500 flights in January and February.
JetBlue forecast a 1 percent to 2 percent rise in first
quarter unit revenue, while Southwest outlined expected growth
of 3 percent.
Cowen & Co airline analyst Helane Becker cut her first
quarter profit estimate for Delta to 30 cents a share from 32
cents in a note to clients, citing the updated outlook. She
raised her quarterly estimate for Southwest to 17 cents a share
from 14 cents, but also cut her estimate for JetBlue for the
period to 6 cents a share from 13 cents.
Shares of the major U.S. airlines ended mixed, with Delta
down 0.5 percent to $35.17 and United off 2.3 percent to $46.66.
American was off 0.2 percent to $38.96 and JetBlue fell 1.8
percent to $8.87. Southwest shares rose 2.2 percent to $23.60.