American Airlines rises on Emirates speculation; Jazz Air and Air Canada up

North and South American airline shares continued to fall on Monday (30-Aug-2010) after news personal incomes rose less than expected in the US in Jul-2010, again questioning the strength of the economic recovery. The Dow (-1.4%) fell as a result.

Airline stocks were also down on another rise in oil prices (+0.6%), to USD74.70. 

American Airlines rises on Emirates speculation

American Airlines (+2.2%) made the biggest gain of the day, on speculation Emirates was looking to acquire a stake in American parent, AMR Corp. However, Emirates President, Tim Clark, responded later in trading stating: “We certainly wouldn’t be doing that. Us buying a stake in AMR? It wouldn’t make sense”. He continued: “You’ve got to be careful of market speculation but it’s flattering that people are talking about us."

According to SmarTrend, American Airlines’ stock is below its 50-day moving average of USD6.97 and 200-day moving average of USD7.68. The carrier ended trading on Monday at USD6.17.

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United and Continental continue to rise

United Airlines (+1.3%) and Continental Airlines (+0.4%) continued to rise following news the US Department of Justice has cleared the carriers’ plans to merge.

In a note during trading, Stifel Nicolaus analyst, Hunter Keay, stated United is a “compelling investment opportunity” and is trading at an “inexplicably significant discount”. Mr Keay also commented that management’s estimates that the combined carrier will lead to annual synergies of USD1 billion-1.2 billion is likely to be “conservative”.

Avondale Partners analyst, Bob McAdoo, meanwhile reiterated the company’s "outperform" rating for both airlines’ stocks. Mr McAdoo stated investors should purchase the stocks on recent weakness, as the airlines are now reaching higher load factors with profitable fare prices.

According to Benzinga, United Airlines has risen more than 220% over the last 52 weeks. The carrier ended trading at USD20.71.

Jazz and Air Canada up with TSX

Jazz Air Income Fund (+1.9%) and Air Canada (+1.3%) also rose, as the Canadian’s TSX (+0.1%) rose for a fourth day, following improved consumer sentiment in Europe

Elsewhere, Republic Airways (-3.6%) and US Airways (-3.1%) declined, as did Hawaiian Airlines (-3.0%).

North & South America selected airlines daily share price movements (% change): 30-Aug-2010