10-Mar-2011 4:33 PM
US airlines shares fall back after earlier gains
Analysis
After strong share gains earlier in the week, most US airline stocks dropped back in trading on Wednesday. Falling the furthest was US Airways, down 3.8%. The carrier announced plans to distribute USD47 million to its employees through its profit sharing scheme, after reporting a net profit of USD502 million in 2010.
Summary
- US airline stocks experienced a decline in trading on Wednesday, following earlier share gains.
- US Airways saw the largest drop, down 3.8%, despite announcing plans to distribute $47 million to employees through its profit sharing scheme.
- Southwest Airlines and American Airlines also experienced significant declines, down 2.8% and 2% respectively.
- US ATA Vice President warns that if jet fuel prices remain at early March 2011 levels, the fuel bill for US airlines could increase from $39 billion in 2010 to $54 billion this year.
- The decline in airline stocks suggests investor concerns about rising fuel costs and their impact on airline profitability.
- This article highlights the volatility and sensitivity of airline stocks to fuel price fluctuations.
Other US airline stocks that fell sharply were Southwest Airlines, which shed 2.8%, and American Airlines, down 2%.
US ATA Vice President and Chief Economist John Heimlich issued a warning that if jet fuel prices stay where they were in early Mar-2011, the fuel bill for US airlines could increased from USD39 billion in 2010 to USD54 billion this year.
Selected AAD daily share price movements (% change): 10-Mar-2011
