American Airlines (+2.2%) was among the few gainers for Tuesday (19-Oct-2010) following news AMR Corp reportedly hired investment bank Evercore Partners Inc and consultant Bain & Co to examine options for its American Eagle regional unit. The evaluation process is likely to take more than six months.
American Eagle would reportedly most likely be spun off to AMR shareholders due to a lack of potential buyers although a sale is reportedly still possible. A separation of Eagle would allow American to seek lower cost ways to serve regional routes and enable Eagle to compete for contracts with other airlines.
In other American Airlines news, the carrier entered an interline agreement with WestJet Airlines (+0.7%), providing American Airlines connecting services to 25 Canadian cities not served by American or American Eagle. The connections will first be available through the six gateways in Canada served by American or American Eagle – Toronto, Montreal, Calgary, Vancouver, Halifax and Ottawa.
American and WestJet expect to implement a second phase of their interline relationship in Dec-2010 that will add connecting opportunities through WestJet's non-stop US services to Canadian cities. The agreement represents WestJet's first interline agreement with a US carrier.
Elsewhere, Hawaiian Airlines (-3.2%) declined for the day, after reporting slightly before the end of trading a slight decline in net income for the three months ended 30-Sep-2010. Hawaiian reported consolidated net income of USD30.5 million, or USD0.59 per diluted share, on total operating revenue of USD352.0 million. This result compares with net income of USD30.7 million, or USD0.58 per diluted share, on total operating revenue of USD305.6 million for the previous corresponding period.
Atlas Air (-6.5%) and Republic Airways (-5.1%) were also down for the day. Delta Air Lines (+1.7%) and Expressjet (+0.2%) were the only other carriers to gain for the day, after the Dow (-1.5%) slumped on mortgage concerns for the banking sector.
North & South America selected airlines daily share price movements (% change): 19-Oct-2010