26-Aug-2009 3:55 PM

Alaska Airlines leads charge as oil prices fall; GOL shares slump

A decline in oil prices (-2.9%) on Tuesday (25-Aug-09) allowed all North American carriers’ stocks to rise during the day, while a fall in the Bovespa (-0.6%), pushed Brazilian carriers’ stocks down. As a result, the AMEX Airline Index (+4%) climbed, as the Dow (+0.3%) also ended the day up.

Alaska Airlines (+13.4%) led the charge, after FTN Equity Capital Markets raised its 2009 profit outlook for the carrier to USD3.78 from USD3.06, stating Alaska Airlines has “consistently outperformed the industry this year in terms of unit revenue change," with the carrier’s yields and average fares decreasing approximately 6% in Jul-2009, compared to an industry average of 18.5%. The analyst expects passenger revenue for the carrier to decline 4% in 3Q2009 and 6% in 4Q2009.

Legacy carriers American Airlines (+9.9%), United Airlines (8.6%), US Airways (8.2%), Continental Airlines (4.3%) and Delta Air Lines (4%) all ended the day up on the back of declining oil prices. American Airlines’ subsidiary, American Eagle launched Dallas-Manhattan (Kansas) service and announced plans to launch Los Angeles-Roswell service on the day. American also grounded the last of its 20 year old Airbus A300 aircraft fleet yesterday.

Southwest (+2.5%) and WestJet (+1.2%) also gained, after Southwest announced plans to commence codesharing with the Canadian LCC in 2010. Expressjet (21.3%) also resumed its climb on the day, rebounding after losing over 12% on Monday..

GOL (-7.5%) stocks meanwhile slumped following an announcement of plans to raise up to BRL650 million (USD366 million) as part of a global offering of preferred shares. Fellow Brazillian carrier, TAM (-1.7%) stocks were also down.

North & South America selected airlines daily share price movements (% change): 25-Aug-09