US airlines hit their low

The nine largest U.S. airlines, including Delta Airlines Inc. and American Airlines, starting tomorrow may report $2.3 billion in first-quarter losses, combining for a fifth straight quarter of multibillion- dollar losses, and reaching a ÔÇ£troughÔÇØ as the recession crimped travel spending and fares. The airlinesÔÇÖ capacity cuts werenÔÇÖt enough to cope with passenger traffic declines of 8 percent or more each month of the quarter, and analysts are predicting a $2 billion deficit. The quarter probably was the ÔÇ£troughÔÇØ for the industry, with traffic and fares likely to rise in the traditionally busy summer season, said Michael Derchin, an FTN Equity Capital Markets Corp. analyst. The carriers slashed prices in hopes of luring back travelers, which eroded unit revenue, a measure of fares and demand, at least 17 percent last month at both Continental Airlines Inc. and US Airways Group Inc.┬á ÔÇ£I would be shocked if the first quarter isnÔÇÖt the worst,ÔÇØ said Derchin, who is based in New York and recommends buying airline stocks. ÔÇ£As good a job as the airlines did ahead of time in reducing capacity, it still was not enough to hold fares in check with the horrendous economy.ÔÇØ┬á ┬áÔÇ£WeÔÇÖre starting to see a sign of a bottom in some markets, such as the U.S. domestic market,ÔÇØ chief executive officer Glenn Tilton of United Airlines parent UAL Corp. said in Tokyo last week.┬á The quarterly losses come after a combined annual deficit of more than $15 billion last year as the airlines cut jobs, parked jets, paid more for fuel and wrote down asset values. Excluding one-time items, their 2008 losses were $3.8 billion.┬á However, ÔÇ£there are slightly less-worse things to comeÔÇØ for the rest of 2009, according to Jesup & LamontÔÇÖs analyst, Helane Becker, as consumer spending and manufacturing numbers that signal broader economic expansion may start to rekindle business travel. While lower fares havenÔÇÖt yet spurred business travel, discounts available this summer may revive vacation demand, as some tickets to Europe are cheaper than they have been in five years.┬á ÔÇ£People canÔÇÖt not take vacations because the fares are so cheap, and the deals are so great,ÔÇØ Becker said.┬á The discounting may be working, at least for carriers that fly primarily in the U.S. Among major U.S. carriers, Southwest, Alaska Air Group Inc. and AirTran Holdings Inc. filled a greater percentage of seats in March than a year earlier.┬á ┬áÔÇ£For the year, I donÔÇÖt expect much better than break even,ÔÇØ ┬áDavid Swierenga, president of aviation consulting firm AeroEcon, said. ÔÇ£The carriers as a whole will be profitable this year, but itÔÇÖs not going to be anything to write home about.ÔÇØ