My Account Menu

CAPA Login


Register to trial CAPA Membership!

Southwest, Republic and South American carriers’ stocks rise amid positive day for equity markets

4-Aug-2009

The majority of American carriers’ shares rose on Monday (03-Aug-09), as the Dow (+1.3%) rose on the back of improved purchasing managers’ indexes in China, the UK, and the EU. However, oil prices (3.1%) surged during the day, rising to USD71.58 in New York, tempering some of the airline gains.

Southwest (+6.5%) was the biggest mover yesterday, continuing its rise after announcing plans to bid for Frontier Airlines. Frontier’s other bidder, Republic Airways (+4.5%) also gained as the carrier completed its acquisition of Midwest Airlines. Expressjet rose +5.8%.

Continental's (+2.9%) improved again, following Fitch Ratings' affirmation of a stable outlook and a “B-” rating. Subsequent to the market close, the carrier announced passenger traffic fell 3.3% year-on-year in Jul-2009, while RASM was still down heavily.

LAN Airlines (+2.7%) rose amid a good day for Chilean stocks (+1.5%). Brazil's Bovespa index rose 2.25% at the end of trading, with TAM (+4.5%) and GOL (+3.4%) gaining.

American Airlines announced closing of private placement

American Airlines (-0.8%) shares fell as a result of Fitch Ratings affirming a rating of “CCC” for the carrier the day prior.  However, results may be different on 04-Aug-09, following the carrier’s announcement it closed a USD276 million private placement offering of senior secured notes due 2016, which were priced at par to yield 13%. The purpose of the offering was to refinance, in part, the outstanding USD401 million principal amount of the Company's 1999-1 enhanced equipment trust certificates (1999 EETCs), which are scheduled to be paid in full on 15-Oct-09.

Analysts lower outlook for Delta

Meanwhile, FTN Capital Markets lowered its full year outlook for Delta Air Lines (+0.7%), forecasting it will lose USD0.97 a share as a result of decreasing yields. The carrier’s revenue erosion is expected to bottom out in 3Q2009.

Meanwhile, US Airways (-6.5%) suffered the largest fall of the day, after falling 3.6% the previous trading day.

North & South America selected airlines daily share price movements (% change): 03-Aug-09


Source: Centre for Asia Pacific Aviation & Yahoo! Finance
* Toronto Stock exchange was closed yesterday


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.