Allegiant bucks trend with big profit rise. American sags on EU alliances investigation - SHARE WRAP
Allegiant Air beat market expectations with a 191% leap in first quarter net profit to USD28.2 million. The company expects another strong performance in 2Q09, due to sharply lower fuel prices. The carrier's ancillary revenue model is also holding up well in challenging economic conditions.
A company spokesman told Dow Jones, "the ancillary services seem to be somewhat more resilient than the base-selling airfare". Allegiant's shares rose 3% yesterday.
Apart from Allegiant, US airline stocks were hammered down yesterday, as the broader market headed south on renewed concerns over the outlook for the US economy as two major banks disclosed further bad loan exposures.
The Amex Airline Index fell 6.5% yesterday, with falls led by American Airlines (-10.1%), Continental Airlines (-5.5%), United Airlines (-9.0%) and Delta (-7.0%). Investors were also concerned by the European Commission's investigations in global airline alliances.
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North & South America selected airlines daily share price movements (% change): 20-Apr-09
Source: Centre for Asia Pacific Aviation & Yahoo! Finance