Hawaiian Airlines shares jump on upgrade; Air Canada to sell CAD260 million in shares

The majority of North and South American carriers saw a rise in stock prices on Tuesday (06-Oct-09), on the back of positive Sep-2009 traffic reports from the day prior and a rise in the wider market, with the Dow (+1.4%) ending trading up.

As a result, the AMEX Airline Index rose 0.9%. However, oil prices (+0.7%) also continued their climb, rising to USD70.88.

Jesup & Lamont reiterate “Buy” rating for Hawaiian Airlines

Hawaiian Airlines (+5.1%) led the gainers, as Jesup & Lamont reiterated early in trading its “buy” rating on the stock, following its 8.1% increase in traffic in Sep-2009. Hawaiian increased capacity by 3.1% last month.

Air Canada enters into agreement for sale of shares

Air Canada (+2.2%) meanwhile announced late in trading it has entered into an agreement with a syndicate of underwriters led by Genuity Capital Markets and TD Securities Inc to purchase 160.5 million units from Air Canada at a per unit price of CAD1.62 (USD1.53) for aggregate gross proceeds of CAD260 million (USD245 million). Each unit is to be comprised of one Class B Voting Share or one Class A Variable Voting Share and one-half of one share purchase warrant.

United prices aircraft financing

United Airlines (1.2%) ended the day down, despite positive analyst comments the day prior. The carrier announced on Tuesday it has priced its public offering of enhanced equipment trust certificates (EETC), to refinance an existing EETC facility that covers a number of the airline’s aircraft. The USD659 million financing has an interest rate of 10.40% and a final expected distribution date of 01-Nov-2016.

United intends to use the net proceeds to repay all of the USD568 million aggregate principal amount related to its outstanding 2001-1 EETC, and will use the approximately USD90 million of remaining net proceeds, after accounting for all transaction-related fees and expenses, for general corporate purposes. As a result of this transaction, principal payment obligations will be reduced in 2010 by approximately USD215 million and in 2011 by approximately USD100 million.

Delta see improvement in load factor for Sep-2009

Delta Air Lines (+0.1%) saw a 4% decline in passenger traffic for Sep-2009, to 12.5 million passengers. However, load factor increased 1.4 ppts, to 82.6%, following a 5.2% drop in traffic (RPMs) and a 6.7% reduction in capacity (ASMs).

North & South America selected airlines daily share price movements (% change): 06-Oct-09