The majority of North and South American carriers saw stock prices rise again on Monday (09-Nov-2009), with the AMEX Airline Index up 2.1% at the end of trading as a result. Stock prices rose with the wider market, with the Dow up 2%, despite a gain in oil prices (+2.4%), to USD79.28.
Copa Holdings (+4.9%) rose on the back of reporting a 7.6 ppts year-on-year increase in passenger load factor, to 80.8% for Oct-2009. The improved load factor was the result of a 17.7% increase in traffic (RPMs), while capacity (ASMs) were increase 6.6%.
Copa Airlines traffic for the month increased 16.6%, while capacity increased 7.3%. This resulted in a load factor of 81.9%, a 6.5 ppt increase. Meanwhile, Aero Republica traffic for the month increased 24.7%, while capacity increased 2.8%. Load factor for the month was 75.2%, a 13.2 ppt increase.
LAN sees 3.9 ppt increase in load factor
LAN (+2.6%) meanwhile saw a 3.9 ppt increase in load factor for Oct-2009, to 80.2%, as traffic rose 15.7% and capacity was increased 10.1%. International passenger traffic accounted for approximately 69% of total passenger traffic.
International traffic for the month rose 16.5%, as capacity increased 10.8%. Accordingly, the international passenger load factor for the month increased 3.9 ppts, to 80.7%. According to the carrier, international capacity was mainly driven by an increase in operations on routes to Europe, as well as on certain regional routes.
GOL (+4.2%) stocks were upgraded during trading to ‘Neutral’ by JP Morgan, citing the carrier’s modification of its fare structure, including an increase in “walk-up” fares, signalling the end of its price war with domestic competitors. The carrier also reported a USD45.8 million net profit for 3Q2009, following the end of trading.
The analysts also downgraded TAM (+3.7%) stocks to ‘Underweight’, as it is not as exposed to the increased fares. JP Morgan added it believes the carrier’s stock price has climbed too high.
Air Canada (+9.5%) meanwhile saw the biggest gain, after reporting a net profit of CAD277 million (USD259 million) for 3Q2009.
The Air Transport Association of America (ATA), stated during trading that it expects a 4% year-on-year decrease in the number of passengers travelling on US carriers during the 2009 Thanksgiving holiday season (20-Nov-2009 to 01-Dec-2009), despite deep discounting over the past several months.
ATA President and CEO, James C. May stated, "it is increasingly apparent that the economic head winds facing the airlines and their customers are anything but behind us. The recent announcement that US unemployment surpassed 10% highlights one of the key factors impacting consumer buying decisions,"
As typical with the Thanksgiving holiday travel period, flights are likely to be quite full, driven this year by the decrease in available seats and deep discounting, rather than by robust demand. Carriers have cut back their schedules in response to economic pressures, with 2009 capacity reductions the deepest since 1942. In addition, recently released government data show that average domestic airfares in 2Q2009 fell to their lowest level since 1998, dropping 13% year-on-year - the largest year-on-year decline on record.
North & South America selected airlines daily share price movements (% change): 07-Nov-09
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