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TAM and American lead carriers on the rise; Copa slips on fall in load factor


The majority of North and South American stocks ended trading up on Tuesday (08-Sep-09), as markets generally performed solidly and following Airbusforecast passenger traffic would improve in 2010 and 2011. The AMEX Airline Index (+0.9%) consequently rose, while the Dow (+0.6%) also gained. The rise in stocks came despite an increase in oil prices (+4.6%), to USD71.10.

TAM (+5.2%) led those on the rise, following an increase in the Bovespa (+2.1%). American Airlines (+2.7%), Air Canada (+2.4%) and GOL (+2.1%) were also up, as consumer sentiment strengthened and presumably on the back of positive Aug-2009 traffic reported last week.

LAN (+0.3%) reported shortly before the end of trading passenger a 4.4% rise in traffic, as capacity rose 7.4%. As a result, the Company's load factor decreased 2.2 points to 76.5%. International passenger traffic accounted for approximately 70% of total passenger traffic. LAN also stated during the day that it believes the worst of the global financial downturn’s effects on the carrier has passed, but it could still suffer from an increase in fuel prices or spread of the swine flu outbreak to the Northern hemisphere.

Hawaiian (+0.9%) was also up, following a US Bureau of Transportation Statistics (BTS) showing Hawaiian Airlines had the best on-time performance of all US carriers in Jul-2009, with 93.6% of Hawaiian’s services arriving and departing on time during the month. Hawaiian was followed by Alaska Airlines (+0.9%), with 87.2%

Copa (-0.3%) meanwhile slipped after reporting a 2.3 ppt fall in overall load factor (Copa Airlines and Aero Republica) for Aug-2009, to 75.9%. Traffic (RPMs) rose 6.6%, as capacity (ASMs) increased 9.9%. Copa Airlines’ load factor meanwhile reduced 4.3%, to 76.1%.

In LCC news, Frontier Airlines, which is unlisted while in bankruptcy protection, estimated mainline passenger unit revenue decreased by 11-13% year-on-year in Aug-2009. Future owner, Republic Airways (-0.7%) stocks slipped. The carrier announced on Friday (04-Sep-09) plans to increase its baggage fees by USD5, as LCCs continue to find new ways to generate revenue amid the global financial downturn.

North & South America selected airlines daily share price movements (% change): 08-Sep-09

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