Shares up on expected Continental RASM improvement

The AMEX Airline Index (+3.0%) gained with the wider market on Tuesday (01-Dec-2009), with the Dow ending trading up 1.2%. The improvement came despite an increase in oil prices (+1.4%), to USD78.37.

Continental expected to report improved financial results for Nov-2009

Continental Airlines (+4.9%) was up on Tuesday, as investors expect the carrier to report improved yields for Nov-2009, to be released as part of its traffic results. The carrier is traditionally the first US carrier to report its results, expected to be released on 02-Dec-2009.

Analysts at JP Morgan expect the carrier to report a 7.5% year-on-year fall in consolidated RASM for the month, compared to a fall of 14% to 15% in Oct-2009, which should result in further improvements in the carrier’s stock price. According to the analysts, legacy carriers have seen stocks fall approximately 15% relative to their pre-earnings positions for Oct-2009. United Airlines (+6.4%) stocks have fallen 2% for the period, while American Airlines (+4.1%) stocks have fallen 26%. US carrier stocks have lost almost 30% in 2009, but are currently above their all-time low in Mar-2009.

Air Canada denies Canadian Federal Pilots Association accusations

Air Canada (0.0%) responded to what it stated was misleading and false allegations by the Canadian Federal Pilots Association, a union representing Transport Canada's aviation inspectors.

The Canadian Federal Pilots Association alleged flight AC271, operating Winnipeg-Toronto service on 09-October-2009, departed Grand Forks with ice on its wings. However, according to Air Canada, the flight only departed after a visual inspection of the wings by flight crew, in accordance with Transport Canada regulations, determined there was no ice on the wings.

The Canadian Federal Pilots Association also alleged safety was compromised during the refuelling process at Grand Forks. The carrier responded stating that due to the unavailability of ground power at the diversion airport, Air Canada's flight crew, in consultation with flight dispatchers, elected to refuel the aircraft with the passengers onboard and one engine running. While Air Canada is not certified by the regulator for this procedure, the aircraft manufacturer's specifications allow fuelling with the engines running.

LAN  planning to list on Peru’s stock exchange

LAN Airlines (+3.3%) reportedly plans to list of the Lima Stock Exchange, as part of Peru, Chile and Colombia’s plans to facilitate cross-border stock trading. The stock exchanges plan to integrate operations by the end of 2010. The carrier’s shares have gained 42% this year on the Chilean stock exchange, compared to a 40% increase in the Ispa.

LCCs AirTran (+8.3%) and Republic Airways (+6.9%) made the biggest gains on Tuesday. AirTran launched a fare sale on all destinations during trading, with fares starting from USD39. The sale is available until 10-Dec-2009, for travel from 11-Dec-2009 to 10-Mar-2009.

ExpressJet (-1.1%) was meanwhile the only carrier to be down at the end of trading, after CEO, James Ream, stepped down from his position to become Senior Vice President for Maintenance and Engineering, effective 01-Jan-2010.

North & South America selected airlines daily share price movements (% change): 01-Dec-09