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TAM gains; LAN Airlines reaches 52 week high, but ends session lower


North and South American airline stocks were mixed on Friday (18-Jun-2010). In the US, the Dow (+0.2%) made a modest gain after a strengthening euro boosted confidence in the region’s economic recovery.

In South America, Brazil’s Bovespa (-0.2%) fell for a second consecutive day, after a decline in commodities dragged producers lower. Chile’s IPSA (+0.9%) meanwhile rose to an eighth consecutive new high, led by hydroelectric power stocks.

GOL gains on ‘neutral’ rating

GOL (+3.4%) was the biggest gainer of the day among the South American carriers, after Zacks Investment Research maintained its ‘neutral’ recommendation of the LCC’s stock.

See related report: “Neutral” recommendation for GOL

TAM gains

Fellow Brazilian carrier, TAM (+1.4%), was also up for the day, despite a decline in the Bovespa. Last week, Brazil’s National Civil Aviation Agency (ANAC) reported a 9.4% year-on-year rise in the carrier’s domestic passenger traffic (RPKs) for May-2010. The carrier also reported a 22.5% in international traffic. Domestic load factor meanwhile rose 0.4 ppt, while international load factor rose 12.3 ppts.

See related CAPA Profile: Traffic and Capacity

In other news, ANAC has tightened regulations on flight delays, meaning airlines will have to provide stranded passengers with food, lodging, telephone and internet access and reimbursements more efficiently. According to AFP, carriers are now required to reimburse fares immediately for flights cancelled or delayed by more than four hours. The carriers previously had up to 30 days to reimburse passengers. ANAC also introduced fines of between USD480-1,500 for airlines that fail to comply.

LAN Airlines reaches 52 week high, but ends session lower

LAN Airlines (-1.1%) reached a new 52-week high during trading before easing into negative territory later in the day. stated the carrier’s price action seems to be bearish, its current stock range defined by calculated support at USD18.08 and a resistance level at USD19.70. However, LAN’s stock appears to have improved since earlier in the month. LAN ended the session at USD19.67.

LAN Airlines stock price: 18-Mar-2010 to 18-Jun-2010

Elsewhere, WestJet (+4.1%) rose after announcing a reduction in fares, while Delta Air Lines (-3.4%) and US Airways (-2.8%) dropped.

North & South America selected airlines daily share price movements (% change): 18-Jun-2010

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