US Airways, United prove the best buys in 1H2010; Latin carrier shares lose ground after strong 2009


US airline investors seemed indifferent to whether merger activity was under way or not in the first half of this year. After seemingly being spurned by United as a partner, US Airways stocks have gained 80.5% in the first six months of 2010. Yet at the same time, as United seeks authorisation to combine with Continental Airlines, both of those carriers' shares have also performed strongly, with United up a stirring 60.6% and Continental up 21.3%.

  • US Airways stocks have gained 80.5% in the first half of 2010, despite failed merger attempts with United.
  • United and Continental Airlines' shares have performed strongly, with United up 60.6% and Continental up 21.3%.
  • Alaska Air stocks have shown strong performance, up 28.9% in the first six months.
  • Delta was the only major legacy airline to gain, with a 4.7% increase in stock value.
  • Expressjet stocks have lost 43.6% in the first half, but investors are hopeful with the appointment of a new CEO.
  • Latin American airlines TAM, GOL, and COPA experienced significant declines in stock value, while Lan Airlines had a positive showing with a 9.0% increase.

Of the US carriers, unaligned (or, alternatively, multiply aligned) Alaska Air was another which has shown strongly, with its stock up 28.9% in the six months.

Delta (+4.7%) was the other major legacy airline to gain, while American Airlines, increasingly attracting doubts over its cost base, was alone in losing 11.2% off its value.

But the regional jet sector's woes were encapsulated in Expressjet's sad performance, the company's stocks losing 43.6% in the half. With a new CEO now in place, investors in the carrier will be looking for upside.

Meanwhile Air Canada, after a very difficult year in 2009, where it had to be rescued from bankruptcy by its government, has seen its B shares gain over a third since 1-Jan-2010, up 34.1%).

Latin American airlines mostly down

TAM (-39.1%), GOL (-21.2%) and COPA (-19.2%) led the charge down for Latin American stocks, after very strong showings in 2009. Only Lan Airlines, among the region's carriers, had a positive showing, with its stock up 9.0% in the first half.

LCCs mostly steady

In a volatile marketplace, the main low cost airlines generally held their ground in the six months to 30-Jun-2010. Only GOL moved significantly, with Southwest Airlines (-0.6%) hovering around the baseline. JetBlue lost 1.3% of value and AirTran was down 6.4% and holiday operator Allegiant shed 11.1%.

North & South America selected airlines share price movements (% change): 01-Jan-2010 to 30-Jun-2010

Stocks were mixed yesterday, with Delta gaining close to 4% and AirTran losing 2.2%.

North & South America selected airlines daily share price movements (% change): 30-Jun-2010

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