US Airways expecting first quarterly profit since 3Q07; American Airlines re-evaluating Eagle sale

North and South American carriers’ stocks rose again on Thursday (10-Jun-2010) as the Dow (+2.8%) moved sharply higher. Investor optimism improved after the European Central Bank boosted its forecast for euro-zone growth this year and data showed new claims for unemployment benefits in the US fell last week.

US Airways expecting first quarterly profit since 3Q2007

US Airways (+7.4%) surged after CEO, Doug Parker, stated during trading that the carrier expects to report a profit for 2Q2010 - the carrier’s first profitable quarter since 3Q2007. Mr Parker stated the carrier is encouraged by “both our prospects and the prospects for the industry”, with revenue per ASM (RASM) currently 20% higher year-on-year. The CEO also commented that it has no plans to look for a merger partner at present.

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Air Canada receives a senior secured term loan facility

Air Canada (+2.7%) announced it has received a commitment from GE Japan Corporation for a senior secured term loan facility of up to USD170.5 million to finance a portion of the purchase price for 16 aircraft leased and operated by Air Canada. Completion of the financing is subject to certain customary terms and conditions.

American Airlines re-evaluating sale of American Eagle

American Airlines (+2.0%) stated during trading that it plans to re-evaluate whether to sell or separate from its American Eagle subsidiary almost 23 months after taking the carrier off the market. AMR Corporation stated in Nov-2007 that it would sell the carrier after shareholders demanded more divestures to boost the group’s stock. It then decided against a sale in or spinoff in Jul-2008, stating it would prefer to wait until economic conditions were “more stable and favorable”.

Also during trading, AMR named Daniel Garton President and CEO of American Eagle. Mr Garton returns to American Eagle after 12 years with American Airlines, most recently as Executive Vice-President – Marketing since 2002.

See related CAPA Profile: Restructuring

Elsewhere, ExpressJet (-6.1%) continued its downward trend. According to SmarTrend, the carrier is currently below its 50-day moving average of USD3.68 and 200-day moving average of USD3.63. WestJet (-0.7%) was down, while Jazz Air Income Fund (+6.6%) and TAM (+6.3%) gained.

North & South America selected airlines daily share price movements (% change): 10-Jun-2010