Airlines show passenger numbers up in April

Shares of U.S. airlines were up today after carriers released April traffic results that showed passenger volume improved from March.

US Airways Group said boardings fell 5 percent in April, but the passenger load factor, or percentage of seats filled, was 84.2 percent, up from 83.2 percent in April 2008.

For March, US Airways had reported its mainline traffic, measured in passenger miles flown, was down 8.9 percent, and the passenger load factor was 81.9 percent.

Airlines have been steeply cutting fares to keep planes filled. And several, including US Airways, Continental, Delta, United and American, have cut flights to Mexico because of the swine flu scare.

Because service to Mexico represents less than 2 percent of U.S. airlines' business, several analysts have said the swine flu outbreak should not affect airlines' earnings unless the virus spreads and fewer people get on airplanes.

Helped by a shift in the Easter holiday to April this year, "these results suggest that the demand/ revenue environment has stabilized, at a minimum, and possibly even improved slightly from March," analyst Bob McAdoo of Avondale Partners LLC. said Monday after Continental Airlines was the first carrier to report monthly traffic.

"Swine flu is a temporary issue - still expecting a profitable second half of 2009," McAdoo said in a note to clients. "In spite of current difficult conditions, airlines will likely stabilize and earnings should return."

Swine flu fears will likely have only a minimal impact on second-quarter earnings, he wrote.

Continental said its revenue per available seat mile was down 12.5 percent to 13.5 percent in April compared with a year earlier, but better than the 19.6 percent drop in March.

Airlines began cutting capacity - seats and flights - last fall in response to high jet fuel prices. When the financial markets collapsed in September and companies slashed travel budgets, airlines discounted fares to keep leisure travelers flying.

Other airlines saw improvements in April, too:

American Airlines said passenger traffic was down 4.7 percent in April compared with April 2008, but less than the 10.9 percent drop in March. American said its load factor was up slightly to 81.3 percent in April fro 80.2 percent in April 2008.

AirTran Airways said its traffic fell only 0.3 percent in April compared to last April, while March traffic was down 7.2 percent; the load factor rose 6.5 percentage points to 80.4 percent.

United Airlines said April that traffic fell 8.7 percent to 9.39 billion revenue passenger miles, down from 10.28 billion a year earlier. Load factor held steady at 79.9 percent from a year ago.

Analyst Hunter Keay of Stifel Nicolaus Capital Markets, said Continental's revenue per available seat mile in April was "slightly better" than the airline's estimate on April 22. He noted that load factors were strong "particularly international which theoretically bodes well for future pricing" and fare increases.

Keay warned that May passenger revenue could take a "step backward" because of pressure to keep fares low compared with last May, when tickets cost more. "We remain cautious on the airline sector."

US Airways shares rose 6.9 percent to $4.90, while American shares were up 9 percent to $6.11. United shares were up 9.2 percent to $6.13, and Delta rose 6 percent to $7.45. AirTran was up 6.5 percent to $8.18.