United Airlines’ share price dropped a further 8.1% yesterday as investors consider the implications of its USD175 million debt issue last week, seen by many as a sign of increasing desperation by the carrier. A Fitch Ratings spokesman told Bloomberg, “paying 17% for debt is not where you want to be”.
United's stock price slumped almost 36% last month, double the nearest fall by US Airways (-17.6%). United is also moving to force agents to the pay customers’ credit-card fees, effective 20-Jul-2009. It is unclear whether more airlines will follow United’s move.
American Airlines' stock fell 5.4% yesterday as it too went to capital markets to raise more than half a billion dollars in debt, paying 10.4% interest.
Republic Airways' shares dropped back 4.5% as CEO, Bryan Bedford, told the Financial Times, “we have interest where we think we can bring value to a particular business model, and we can acquire a revenue stream at a fair price. It just hasn't happened yet”.
WestJet advanced 5.5% as Raymond James upgraded its rating from "market perform" to "outperform" and raised his price target from CAD10 to CAD12.
North & South America selected airlines daily share price movements (% change): 30-Jun-09
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