Continental RASM continues rise; Republic Airways best value US carrier; JetBlue up

North and South American airline stocks soared on Wednesday (01-Sep-2010), boosted by a stronger US market. The Dow (+2.5%) gained following an improved Institute of Supply Management manufacturing index for Aug-2010, accompanied by improved manufacturing data in China.

The gain in airline stock was not deterred by a 2.8% rise in oil prices, to USD73.91, with the AMEX Airline Index ending trading up 3.7%.

Continental RASM continues to rise

Continental Airlines (+3.7%) gained after reporting a 0.7% year-on-year improvement in load factor for Aug-2010 to 86.5%. The result came as traffic (RPMs) fell 0.4% on a 1.1% reduction in capacity (ASMs) for the month.

However, passenger numbers for Aug-2010 fell 2.9%, to 5.8 million.

More positively, both consolidated and mainline passenger revenue per available seat mile (RASM) are estimated to have increased between 18-19% year-on-year. For Jul-2010, consolidated passenger RASM increased 21.2%, while mainline passenger RASM increased 21.9%.

See related CAPA Profile: Yields

Republic Airways best value US carrier

Republic Airways (+7.1%) was the biggest gainer of the day. According to SmarTrend, Republic ranks the highest of all US carriers in terms of value. The carrier has a price to book ratio of 0.5x based on a current price of USD6.74 and a book value per share of USD14.

JetBlue pleased with current traffic

JetBlue (+5.0%) also rose after CEO, Dave Barger, stated the carrier was pleased with its traffic trends, commenting: "We're not seeing a double dip. We have strong bookings as we close the summer."

See related CAPA Profile: Traffic and Capacity

Elsewhere, freight carriers FedEx (+4.3%) and UPS (+3.8%) stocks also performed well for the day. Expressjet (+0.2%) meanwhile made only a minor gain.

North & South America selected airlines daily share price movements (% change): 01-Sep-2010