Alaska's Shows Dropping Demand From H1N1

Alaska Airlines filed a forward-looking investor update with the government this week, and all is not rosy. Though April didn’t look bad at all with a 0.5 percent increase in unit revenue on a 2 point increase in load factor, there are concerns looking forward.

The May loads appear to be deteriorating. May is currently booking 1.5 points behind last year. In their words, “May advance booked load factors have declined from our previous guidance. We believe this is primarily due to the H1N1 virus threat resulting in significant demand decline to Mexico and, to a lesser extent, other destinations.”

Ah yes, Mexico. Hopefully Mexico travel will begin to pick up again, because Alaska sees a very big impact from what happens south of the border.

On the regional side of the business, things appear to be more stable. In April, load factor and unit revenue were flat. May bookings, however, are down 1 point. That’s not too bad, but then again, Horizon has very little Mexico exposure to worry about.

On the capacity side, Horizon is looking to tighten things up. Right now, Horizon has 11 Q400s scheduled to be delivered between now and the end of 2011. They are currently in negotiations with Bombardier to delay those to a later year. They’re hoping to have that finalized by the end of June. I’m assuming this is because they’re having more trouble getting rid of those CRJ-700s than they hoped. By the end of this year, they’ll still have 13 flying.