14-Aug-2009 3:40 PM

United Airlines rallies on back of increased stake by investment group; Republic falls

The majority of North and South American carriers shares were up yesterday (13-Aug-09) as the NYSE Arca Airline Index (+1.4%) rose and the Dow ended the day up slightly (+0.4%). Oil prices (+0.5%) were also up, to USD70.52.

Republic Airways (-2.3%) took the biggest fall yesterday, ahead of the auctioning of Frontier Airlines. Since then, Frontier has announced Republic was the winning bidder for the carrier, outdoing Southwest. Southwest Airlines (+2.6%) was up, with many believing it would win the bidding auction to take over Frontier.

American Airlines (-1.8%) also fell, as its proposed antitrust immunity with British Airways starts to look less likely.

Alaska Airlines (-1.3%) was down at the end of trading, after reporting its international passenger traffic suffered the highest fall in the first five months of 2009, according to the Bureau of Transportation Statistics (BTS), with traffic down 28% year-on-year. BTS reported a 9.3% year-on-year decrease in passenger traffic for all US carriers in May-2009, the 14th consecutive month of traffic declines, as traffic fell 9.5% overall for the first five months of the year.

Meanwhile, United Airlines (8.2%) led the majority of carriers on the way up yesterday, after Citadel Investment Group increased its stake in the carrier to approximately 7.1 million shares, 4.9% of the issued stock. The group held 900,666 shares in United at the end of 1Q2009.

GOL (+5.1%) stocks also continued to rally, following its strong second quarter of profitability earlier in the week.

Competitor, TAM (+1.5%) was also up, following a 1.3 ppts increase in domestic load factor for Jul-2009, to 71.7%. Domestic traffic (RPMs) was up 6.2% over the month, as capacity (ASMs) also increased 4.3%. However, international load factor fell 7.1 ppts, to 74.4%, as traffic rose 9.4% on a 19.9% increase in capacity. Expressjet (+3.6%) and Central America’s COPA (+3.6%) also performed well.

North & South America selected airlines daily share price movements (% change): 13-Aug-09