Allegiant to offer USD250 million in senior unsecured notes; AirTran staff planning strike action

North and South American carriers’ stocks declined on Tuesday (18-May-2010), again affected by a fall in the wider market. The Dow (-1.1%) moved lower after the US Securities and Exchange Commission proposed tighter regulations to prevent further “mysterious” free-falls in the stock market, like the one experienced on 06-May-2010.

Under the proposal, exchanges would temporarily cease trading in particular individual stocks if the price moves 10% or more in a five-minute period.

Consequently, the AMEX Airline Index fell 1.6% for the session, despite a further 1.2% decline in oil prices, to USD70.73.

Allegiant to offer USD250 million in senior unsecured notes

Allegiant (-2.5%) shares followed the market lower. The company announced during trading it is offering USD250 million aggregate principal amount of senior unsecured notes due 2017 to qualified institutional buyers.

The company plans to use the proceeds from the offering to pay for the balance of the purchase price and induction costs for the MD 80 and B757 aircraft under contract, to make principal payments on existing debt which are payable in 2010 and 2011 and utilise remaining proceeds for other asset acquisitions, mergers or acquisitions and general corporate purposes.

AirTran staff planning strike action

AirTran (-2.6%) was also down on news 97.5% of members of the carrier’s Air Line Pilots Association have approved a measure granting them the authority to call a strike if contract talks fail. Meanwhile, the carrier's flight attendants, represented by the Association of Flight Attendants-CWA (AFA-CWA), announced plans to picket with AirTran pilots at the company's annual shareholder meeting to protest unproductive contract negotiations.

Expressjet commences Branson AirExpress operations

Expressjet (+3.7%) and Alaska Air (+0.1%) were the only two gainers of the day. Expressjet launched its new “airline within an airline”, Branson AirExpress, the day prior. The subsidiary is a public charter service and launched operations from Branson to six destinations, including Austin, Des Moines, Gulfport/Biloxi, Houston, Nashville and Shreveport.

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