Maintenance costs during the quarter soared 58.7% year-over-year. The carrier on Wednesday told reporters and analysts that repairs have become more costly, “particularly engine repairs.” Last quarter B6 said it expected to face significant maintenance cost challenges, and though it originally expected the AVEOS closure to become a “double-digit problem,” it said that with recent progress in terms of recent negotiations, “the problem is downsized to a single-digit number.”
To continue to offset the increased maintenance costs, it has sold six older Airbus A320 spare engines during the quarter and replaced them with new engines purchased at the end of 2011 and earlier this year. B6 said it may continue to sell other older engines, and has negotiated a long-term maintenance agreement covering its CF34-powered Embraer E-190 fleet. It expects CASM, excluding fuel, in the third quarter to increase between 4.5% and 6.5%—with most of the increase driven by maintenance expense and profit sharing expense.
Traffic during the second quarter increased 10.5% to 8.49 billion RPMs on a 5.5% rise in capacity to 9.96 billion ASMs, pushing load factor up 3.8 points to 85.3%. Yield was 13.78 cents, up 1.3% year-over-year, while passenger RASM climbed 6.1% to 11.76 cents and CASM lifted 2.1% to 11.51 cents. CASM ex-fuel rose 5.6% to 6.99 cents.
"Our focused growth strategy in Boston and the Caribbean and Latin America is clearly paying off as we generated record revenues and improved operating margins,” B6 president and CEO Dave Barger said, adding that “demand trends remained solid throughout the quarter.” It plans to increase capacity between 7%-9% in the third quarter and between 6.5%-8.5% for the full year.
(Christine Boynton - ATWOnline News)
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