Loading

JetBlue reports double-digit RASM gain; WestJet share boosted by positive Canadian jobs data

Analysis

US airline stocks gained on Friday, with the NYSE Arca Airline Index rising approximately 1%. It ended a week that recorded an increase of 7%, as US carriers reported double-digit unit revenue growth in Jun-2010, coupled with strong load factors, continued careful capacity management and improved demand.

Summary
  • US airline stocks experienced a 7% increase in a week, driven by double-digit unit revenue growth, strong load factors, capacity management, and improved demand.
  • JetBlue reported a 19% year-on-year increase in passenger revenue per ASM in June 2010, leading to a 4.9% boost in the company's share price.
  • Canadian stocks rose for the fourth consecutive day after unexpected job creation data, with employment rising by 93,200 in June 2010 and the jobless rate falling to 7.9%.
  • Canada's dollar strengthened against the US dollar for the fourth day in a row, reaching its highest level in the month.
  • The NYSE Arca Airline Index increased by approximately 1% on Friday.
  • The Centre for Asia Pacific Aviation provided selected LCCs' daily share price movements on July 9, 2010.

See related article: Double-digit PRASM performance for United, Southwest, US Airways and Continental; outlook improving

Meanwhile, JetBlue became the last of the majors to report Jun-2010 traffic results on Friday, with the results boosting the LCC's share price by 4.9%. JetBlue stated passenger revenue per ASM (RASM) increased 19% year-on-year in Jun-2010, with passenger numbers increasing 9.7% year-on-year to 2.1 million in the month. Average load factors increased 3.9 ppts to 84.2%.

In the Canadian market, stocks rose for a fourth day on 09-Jul-2010 after government data revealed that Canada's job creation was almost five times more than economists expected in Jun-2010, restoring most of the country's job losses since 2008.

Statistics Canada reported that employment rose by 93,200 in Jun-2010 (following gains of 24,700 in May-2010 and a record 108,700 in Apr-2010), with the jobless rate falling to 7.9%, the lowest since Jan-2009. Meanwhile, Canada's dollar strengthened against its US counterpart for a fourth day, rising to the highest level this month.

Canada's employment levels: Jun-2007 to Jun-2010

Selected LCCs daily share price movements (% change): 09-Jul-2010

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More