My Account Menu

CAPA Login

Register to trial CAPA Membership!

Air Canada, GOL, FedEx stand out as market rises. But American Airlines, Continental out of favour


Air Canada (+7.7%), GOL (+6.2%) and FedEx (+4.8%) stocks were the day’s best movers on Tuesday, while the Dow Jones index moved up a healthy 2.4% on stronger consumer sentiment news. This did nothing for Continental (-1.8%) or American Airlines (-1.1%) though. If in fact consumer sentiment surveys genuinely reflect spending intentions, it should be the airline sector which is an early beneficiary.

However, there is little to suggest that consumers are planning to spend up big on discretionary items like air travel this Summer, at least on American or Continental, according to investors.

For daily updates on American aviation stock prices and a complete wrap of the day's breaking news, sign up now for a complimentary subscription to America Airline Daily.

North & South America selected airlines daily share price movements (% change): 26-May-09

GOL again continued its upwards movement, thanks to the lower level of concern over the airline’s funding arrangements.

Likewise, since some of the value has been removed from FedEx’s capitalisation, a slightly less negative outlook from analysts helped to restore some momentum yesterday.

Air Canada is in final “round-the-clock” negotiations with the Canadian Auto Workers Union which looks after 4,500 of the airline’s sales and check-in staff. The union is one of the more aggressive and has concerns about Air Canada’s plans for a pension moratorium while rectifying its pension deficit. But the talks are moving along. And the carrier also benefited from a tentative deal (“MoU”) with a credit card processor to reduce the level of unrestricted cash which Air Canada must maintain; this would help with cash flow – and will put pressure on other suppliers to follow suit.

All of this is helping to relieve a little of the immediate concern over Air Canada’s survival prospects.

Want more analysis like this? CAPA Membership gives you access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find out more and take a free trial.