Continental and US Airways Report Steep Revenue Declines

If you thought revenues looked bad before, just wait until you see March's numbers. The quick decline has gotten even worse, according to the estimates released by Continental and US Airways.

Let's start with Continental. The airline anticipates that revenue per available seat mile (RASM) will be down 19.5 to 20.5 percent year-over-year once the March numbers are finalized. Load factors slipped 2.9 points, so this is a mix of fewer people on each plane and lower fares. At last check, Continental had predicted around an 18 percent decrease, so the end of the month must have seen accelerated weakening for it to drop even further.

With US Airways, the numbers weren't much better, but there is some nuance here. Passenger RASM, or PRASM, is down 17 to 19 percent year-over-year. Load factor dropped 2.5 points, so again it's a combination of weakness in fares and in the number of people onboard. Not good, especially considering how much capacity has already been taken out of the system.

But there is one bright spot for US Airways. That drop in PRASM does not include ancillary revenue, the extra fees that airlines have started charging. When you add those, the RASM drop is "only" 13 to 15 percent. Those are still some horrific numbers, but I suppose we should look for any morsel of good news we can find.