We create net income forecasts for all major US airlines. The forecasts are calculated with a multi-step process that uses our price indexes to create revenue estimates, then adjusts for estimated jet fuel and other expenses to yield net income.
Our real-time price indices allow us to create revenue forecasts for each airline before they publish their quarterly results. We use the price growth of each route that we track combined with our estimate for the number of passengers to calculate each forecast. Adjustments for strong seasonality in the airline industry are also applied.
In July of 2023 we created our Q2 2023 revenue estimate for each airline. We created the estimate before Q2 earnings were released. When the airlines reported earnings we compared our estimates to their reported quarter over quarter change in domestic passenger revenue. There was a 92% correlation between our estimates and the actual results, yielding a statistically significant p-value of 0.04%.