TAM makes biggest gain in two months; GOL rises on Brazil traffic results; LAN also up

North and South American airline stocks gained on Wednesday (13-Oct-2010) as the Dow (+0.7%) rose to a five-month high. US markets were up on better-than-expected quarterly results from JP Morgan Chase and Intel.

South American shares also advanced for the session. Brazil’s Bovespa (+1.0%) rose to its highest point in six months on analyst comments and speculation Chinese economic growth is accelerating. Chile’s IPSA (+2.7%) also made strong gains, boosted by a technical rebound and the US stock market.

TAM makes biggest gain in two months

TAM (+4.4%) made its biggest gain in two months after Goldman Sachs Group Inc recommended adding to holdings of stocks in homebuilders, mining, banking and transportation sectors. The company expects these sectors to eclipse gains made by the retailing sector, which have so far led the Bovespa higher this year. TAM’s rise was its biggest move since announcing plans to acquire LAN Airlines on 13-Aug-2010. GOL (+5.7%) also soared on Goldman Sachs’ comments.

Chilean carrier LAN (+4.3%) also gained for the day, up with the wider market.

GOL and TAM traffic rises in Sep-2010

In other TAM and GOL news, Brazil’s National Civil Aviation Agency (ANAC) reported a domestic load factor of 73.4% an international load factor of 82.2% for Brazilian carriers in Sep-2010. For the month, GOL’s domestic load factor was 75.7%, among the highest of the carriers, while its international load factor was 72.7%. TAM reported a 70.1% domestic load factor and 84.2% international load factor.

Brazilian carriers' traffic (RPKs) gained for the month, up 29.9% year-on-year domestically and 27% internationally. GOL’s domestic traffic was up 22.5% for the period, while its international traffic was up an impressive 55%. TAM reported a 24.8% rise in domestic traffic and a 23% rise in international traffic.

See related CAPA Profile: Traffic and Capacity

Copa Airlines increases route network

Elsewhere in South America, Copa Airlines (-0.9%) slipped for the day. The carrier recently announced a number of changes to its winter strategy, including increases in frequencies in services from its Panama base to Aruba, Belo Horizonte and Cancun.

See related CAPA Profile: Route Changes

United Continental to expand Mexican services

United Continental Holdings (-1.1%) suffered the biggest decline for the day. The group announced the day prior that Continental Airlines and United Airlines will boost services between the US and Mexico. In addition, Continental Airlines today filed an application with the US Department of Transportation (DoT) for authority to begin once-weekly non-stop service to Cancun, Mexico, from three new cities: Austin and San Antonio, Texas, and Raleigh-Durham. These Saturday services, which are subject to government approval, would begin 19-Feb-2011. The service changes are consistent with the airlines' previously announced capacity guidance. The move follows the bankruptcy of Mexicana.

North & South America selected airlines daily share price movements (% change): 13-Oct-2010