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US LCCs increase employee levels; GOL impacted by LAN/TAM merger


Shares in US LCCs were all strong yesterday, with shares in JetBlue, Southwest, Allegiant and AirTran gaining 1.3%, 1.4%, 1.6% and 2.6%, respectively. Shares in Canadian LCC, WestJet, were also higher, up 2.6%.

Meanwhile, US Department of Transportation's Bureau of Transportation Statistics (BTS) reported that US LCC full-time equivalent employee (FTE) levels in Jun-2010 increased 0.9% year-on-year, with five LCCs reporting year-on-year increases, namely: Frontier Airlines (+10.1%), Allegiant (+10.0%), Virgin America (+8.8%), Spirit (+7.8%) and JetBlue (+4.3%). Southwest and AirTran reported year-on-year FTE Reductions.

The six LCCs reporting employment data in both 2006 and 2010 employed 11.9% more FTEs in Jun-2010 than in Jun-2006, with Alleigant reporting the largest percentage increase, up 121.0%. 

Overall, US scheduled passenger airlines employed 2.4% fewer workers in the month, marking the 24th consecutive decrease in FTE levels for the scheduled passenger carriers from the same month of the previous year. However, the June FTE number was the highest since Jan-2010.

Meanwhile, shares in Brazilian LCC, GOL, gained 1.8%. The previous day, the carrier (which ended the day 1.1% higher) witnessed its biggest intra-day tumble since 06-May-2010, slumping 7%, on news of the LAN-TAM merger, before making a comeback in afternoon trading. The merger provides somewhat of a challenge for GOL, as LAN will now be looking to grow in Brazil

Selected LCCs daily share price movements (% change): 17-Aug-2010

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