Downward trend in GOL identified; LAN CARGO accelerates growth plans


North and South American airline stocks plummeted on Tuesday (23-Nov-2010) with wider markets, as investors expressed concern over the North Korean shelling of South Korea and economic issues in Europe. The Dow ended the session 1.3% lower.

Downward trend in GOL identified

GOL (-4.8%) was the biggest fall of the day after SmarTrend stated it has identified a downward momentum in the LCC’s shares. Over the past 52 weeks, the carrier has trading between a low of USD10.53 and a high of USD18.66. The carrier is now below its 50-day moving average of USD16.81, but may find support at its 200-day moving average of USD13.94. GOL ended trading at USD15.80.

LAN CARGO accelerates growth plans

LAN Airlines (-1.4%) declined as Chile’s IPSA (-0.7%) fell for the day. The decline was despite subsidiary LAN CARGO announcing that due to the increase in the demand for air cargo transportation resulting from the strong economic recovery its markets, the carrier plans to accelerate its growth plan by incorporating three leased B767-300F into its fleet.

The first aircraft will be inducted at the beginning of this month, the second during Dec-2010 and the third in Jan-2011. The carrier has also announced an agreement for the option to purchase a new B777F. This aircraft is expected to join the carrier's fleet during 4Q2012. By the end of 2012, the company and its affiliates ABSA, LANCO and MAS AIR will operate a fleet of ten B767-300F, four B777F and two B767 that are under sublease to a third party.

See related CAPA Profile: Air Freight

Other Latin American carriers, TAM (-2.3%) and Copa (-2.2%) were also down for the session, as the MSCI Latin American stocks fell to its lowest level since 28-Sep-2010. Brazil’s Bovespa (-2.4%) was part of the decline.

Hawaiian Airlines gains on analyst coverage 

Elsewhere, Hawaiian Airlines (+4.2%) and Air Canada (+06%) were the only carriers to end the session higher. Hawaiian gained after Stifel Nicolaus initiated coverage of the carrier with a "buy" rating and a price target of USD10.50. The carrier ended trading at USD7.27 and has a 52-week range of USD4.69-8.15

US airlines' passenger numbers up 5.7% in Oct-2010

In other news, Air Transport Association of America (ATA) reported a 5.7% year-on-year improvement in passenger numbers for Oct-2010 to 45.4 million. The rise was led by a 12.6% gain in international passenger numbers to 5.9 million, while domestic passenger numbers were up 4.8% to 39.5 million. Load factor was up 0.8 ppts for the month.

See related CAPA Profile: Traffic and Capacity

North & South America selected airlines daily share price movements (% change): 23-Nov-2010

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