Investigating US Airlines; Consolidation and Key Trends

NAOS undertook an investigation of the US Airline sector, evaluating the effects of consolidation and assessing the fundamentals for continued ongoing strength. Research conducted showed an increasing participation rate by a more confident, wealthier consumer base. According to a review by Airlines For America, an expanding US economy, employment growth rising personal incomes and the highest U.S consumer sentiment in over a decade is driving increased demand for air travel. We have also seen a renewed focus by Airline operators with regard to capital reinvestment and returns to shareholders. Over the last ten years (to December 2014) IATA and the International Civil Aviation Organisation (ICAO) have shown Return on Invested Capital for system-wide global commercial airlines to have increased from 2.9% in 2004 to a forecasted 7.5% for the 2015 Calendar Year. Airlines for America also recently reported that outlays on capital spending exceeded US$1.1Bn per month over the course of the 2014 Calendar Year and, thus far, US$1.4Bn per month for 2015. The full report can be read here: (VIEW LINK)