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AirTran, United Airlines, Allegiant, JetBlue hit by oil price. Air Canada, GOL and TAM up

29-May-2009

AirTran (-4.3%), United Airlines (-3.1%), Allegiant (-2.6%), JetBlue (-2.1%) stocks were the biggest losers, against a rising Dow Jones Index, as oil prices pushed up to USD65, although jet fuel price increases lagged that increase. Air Canada (+2.9%), GOL (+2.1%) and TAM (+1.9%) swam against the trend, as did Southwest Airlines (+1.1%), which remains relatively well hedged.

Oil prices are now at a six-month high.

Air Canada’s move came despite suggestions that the carrier may have trouble meeting a 31-Jul-09 deadline for its next pension payment, which could reportedly be as large as CAD225 million. The concern, as expressed in the Toronto Globe and Mail, was that this would place Air Canada’s credit covenants at risk.

And UPS (-1.5%) lost ground as it awaited a pilots’ union decision on whether pilots are prepared to make volunteered savings, such as by leaves of absence, adequate to avoid the need to lay anyone off. UPS is looking for USD40 million in savings by the end of 2009. The pilots’ union proposal was due at 0800h this morning.

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North & South America selected airlines daily share price movements (% change): 28-May-09


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