North and South American airline stocks rallied on Tuesday (17-Aug-2010) as wider markets advanced on encouraging economic data and improved financial results from Wal-Mart. The Dow (+1.0%) was up after the Federal Reserve stated industrial production rose 1.0% in Jul-2010, while the US Government reported a 1.7% increase in the construction of new homes.
Latin American stocks also gained, as TAM (+3.5%) and LAN (+1.9%) continued to gain. Brazil’s Bovespa (+1.3%) and Chile’s IPSA (+0.7%) gained as a result. Copa (+5.2%) and GOL (+1.8%) also gained. The increase in airline stocks was despite a slight rebound in oil prices (+0.7%), to USD75.77.
United and Continental CEO to give depositions for latest court case
United Airlines (-2.4%) and Continental Airlines (-2.1%) were down on news CEOs Glenn Tilton and Jeffery Smisek, respectively, are to give depositions later this month for class action lawsuit against the carriers’ plans to merge. A hearing on a preliminary injunction to stop the merger will be held on 31-Aug-2010. The lawsuit has been filed by a group of passengers who claim the merger will result in less competition and higher fares.
Alaska Air above 200-day moving average
Alaska Air (+2.2%) was also up, ending trading at USD53.21. According to SmarTrend, the carrier’s shares are now trading above their 50-day moving average of USD49.45 and 200-day moving average of USD40.11. The analysts are bullish on Alaska Air’s shares.
US Bureau of Transportation Statistics (BTS) announced during trading that US scheduled passenger airlines employed 2.4% fewer workers in Jun-2010, the 24th consecutive monthly decrease in full-time equivalent employee (FTE) levels. According to US BTS, five network airlines decreased employment in Jun-2010 while Southwest (+1.4%) and AirTran (+2.6%) were the only LCCs to report a decrease in employees during the month. Details are as follows:
- Full-time equivalent employees: 378,300, -2.4% year-on-year;
North & South America selected airlines daily share price movements (% change): 17-Aug-2010
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