Gol and US Airways up; ExpressJet falls after delay incident

The majority of North and South American carriers’ stocks climbed on Wednesday (12-Aug-09), as the Dow (+1.3%) and NYSE Arca Airline Index (+4%) rose, with investors in buying more ahead of the US Federal Reserve’s reports on interest rates and monetary policy. Oil prices (+1%) were also up, to USD70.16 per barrel.

Gol (+12.7%) led the charge, after 2Q2009 results outperformed analysts’ predictions. The carrier posted a profit of USD191 million for the quarter. According to Leme Investimentos, things seem to be improving for the carrier, after three years of worsening conditions. Competitor, TAM (+4.7%), also rose, ahead of reporting 2Q2009 on 13-Aug-09. Bloomberg analysts expect the carrier to report a net income of USD166 million, its highest since 2003.

Republic Airways (+7.5%) was the biggest North American gainer on the day, ahead of its possible participation in the auction for Frontier. Southwest Airlines (+1.1%) stocks also rose.

US Airways (+4.5%) ended the day up, after it predicted its slot swap with Delta Air Lines will allow annual results to increase by USD75 million. The two carries plan to swap slots at New York LaGuardia and Washington Reagan airports, with Delta to provide US Airways with 42 operating slots in return for 124 US Airways slots at the airports. This will allow US Airways to expand services in Washington, Sao Paulo and Tokyo. Delta Air Lines (+2.6%) also rose as a result, as the deal will allow it to expand New York services.

Meanwhile Expressjet (-6.7%) was one of the few to be down at the end of trading, after passenger traffic fell 20% year-on-year and the US Government sought an investigation into a seven hour overnight delay of one of its aircraft on 08-Aug-09, leaving passengers stranded onboard.

Air Canada-B (-2.1%) continued to fall, as investors remain unsure on the carrier’s future.

North & South America selected airlines daily share price movements (% change): 12-Aug-09