For Immediate Release
Chicago, IL - May 7, 2012 - Today, Zacks Equity Research discusses the Airlines Industry, including Apple Inc. ( AAPL ), Delta Air Lines ( DAL ), United Continental ( UAL ), Southwest Airlines ( LUV ) and JetBlue ( JBLU ).
A synopsis of today's Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/74514/airline-industry-stock-outlook-may-2012
We believe industry consolidation and various ancillary revenues will boost profitability and cost performance of most air carriers going forward. This is an opportune moment for companies to consolidate in order to regain their lost profits and operational efficiency.
Ancillary Revenue: A number of supplementary revenue streams helped the airline industry gain ground in 2011 and 2010 after two years of drought. Air carriers are adding new features to services as well as expanding new products to improve passenger satisfaction and experience. The IATA projects total revenue of $633 billion for 2012, up slightly from $596 million projected for 2011.
Carriers are going wireless with the in-flight entertainment systems such as American Airlines' Gogo "Vision" wireless video-on-demand, Delta Air Lines' "Delta Connect" and Lufthansa's "BoardConnect." Other carriers such as Virgin America, Qantas and Virgin Australia will soon launch their in-flight entertainment systems.
Cathay Pacific, Malaysia Airlines, KLM, Delta, Qantas and British Airways have also made Apple Inc.'s ( AAPL ) iPad available to passengers in their lounges, rent them out in the air as well as use them as a self-service kiosk, customer survey tool and food ordering tool.
Further, major U.S. carriers remain focused on expanding their product and service offerings on board and on the ground for higher ancillary revenues. Delta Air Lines ( DAL ) and United Continental ( UAL ) are installing winglets, WiFi and flat-bed seats apart from expanding Economy Comfort or Economy Plus seats to their fleet. United Continental is also introducing streaming wireless video in its aircraft.
Southwest Airlines ( LUV ) is benefiting from EarlyBird check-in, unaccompanied minor travel and pet fees. The company is renovating in-flight cabins and redesigning interiors, and has labeled the new appearance as Evolve: the New Southwest Experience. These fleet modernization plans and the All-New Rapid Rewards program is contributing to revenue growth.
JetBlue ( JBLU ) is experiencing solid growth given continued success in the Getaway Vacations Division, as well as the Even More Space product.
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