Loading

Crisis Report - 17-Oct-08

The good news: Oil below USD70 per barrel. Oil prices have fallen below USD70 per barrel for the first time in 15 months, sending US airline shares sharply higher, despite the first quarterly loss in 17 years for Southwest Airlines. As the oil price has crashed, Southwest has taken a huge hit on the relative value of its hedge contracts, until recently the envy of the rest of the airline industry. With falling load factors and rising non-fuel costs (+1.8% in 2Q08), Southwest’s market darling status could quickly evaporate. Still, the stock soared 8% overnight as the broader US market rose 4%. United Airlines surged 21%, while Continental, Delta and American jumped about 15%. There is an expectation falling oil prices will offset any slowdown in passenger demand. This is probably illusory.

Become a CAPA Member to access Analysis Reports

This CAPA Premium Analysis Report is 287 words.
Become a CAPA Member

Our Analysis Reports are only available to CAPA Members. CAPA Membership provides exclusive access to in-depth insights on the latest developments in the aviation and travel industry, developed by our team of dedicated analysts located in Europe, North America, Asia and Australia.

Each report offers a fresh perspective on the latest industry trends and is available online or via the CAPA mobile app, with customisable alerts to help you stay informed and identify new business opportunities.

CAPA Membership also provides access to our full suite of tools, including a tailored selection of more than 400 News Briefs every weekday and comprehensive data and analysis on thousands of companies around the world.