US airlines report 10th consecutive monthly increase in passenger revenue; Air Canada and TAM up

North and South American airline stocks advanced on Friday (19-Nov-2010) after Air Transport Association of America (ATA) stated US airlines reported an 18% year-on-year increase in passenger revenue in Oct-2010, the 10th consecutive monthly increase, including a 12.5% increase in domestic passenger revenue and a 31% jump in international passenger revenue. The industry trade organisation also reported cargo traffic, measured in cargo revenue ton miles, rose 8% in Sep-2010.

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United Continental (+2.3%) made one of the day’s biggest gains after analyst Andrew Lecky stated the carrier may have the greatest upside potential among large US airlines. Stifel Nicolaus analyst Hunter Keay and CRT Capital Management Group analyst Michael Derchin both recommend the stock. The stock is inexpensively priced, according to Mr Keay.

Mr Lecky also stated Alaska Air (+1.6%) is one of the top performing smaller carriers. Morningstar Inc analyst Basili Alukos stated the carrier performs well because its local market is so small, no other airline can effectively compete with it in Alaska.

JetBlue (+1.0%) was up for the day after Nasdaq stated that after a recent market sell-off in the LCC’s stock, it issued a buy under price of USD6.80 for the carrier. Its trading target remained at USD8.30. JetBlue ended trading at USD6.78.

American Airlines (+0.1%) made only a slight gain despite Soleil Securities raising its target price on the carrier’s stock from USD6.00 to USD8.00. It also “slightly” raised its 2010 and 2011 EPS forecasts for the carrier. For 2010, Soleil expects American to report a loss of USD1.30-1.50 and a profit of USD0.10-0.20 for 2011. The analysts maintained their "hold" rating on the stock.

See related CAPA Profile: Outlook, Forecasts, Guidance

Elswhere, Jazz Air Income Fund (-0.4%), Fedex (-0.3%) and Delta Air Lines (-0.1%) were the only carriers to decline for the day, while Air Canada (+3.4%) and TAM (+2.7%) made strong gains.

North & South America selected airlines daily share price movements (% change): 19-Nov-2010