Air Canada (+15.2%), TAM (+10.4%), GOL (+8.9%) and United Airlines (+6.1%) stocks all fared well in favourable winds, as the market gained confidence over recent apparently positive signs. The Dow rose over 3% on Wednesday.
Air Canada union accepts terms
Air Canada stocks leapt as investors sniffed the prospect of avoiding bankruptcy; the machinists union members had a change of heart, with 10% changing their votes on the second attempt. More than 60% approved management’s proposal to defer pension payments until next year.
American Airlines sheds another USD300 million
Even American Airlines (+4.3%) gained, despite announcing a 2Q2009 loss of USD390 million (USD319, net of special items) on the back of over 20% reduction in revenues year on year.
This was against a loss of USD298 million in 2Q2008. It is hard to remember a time when such a bad result – during a peak earning season – would be rewarded with a significant gain in market cap.
And as for the outlook, “the challenges for our industry and company have continued throughout 2009,” said AMR Chairman and CEO Gerard Arpey. “With ongoing global economic weakness and the resulting effect on travel demand, revenues are down sharply from a year ago. The spot price of oil, while much lower than this time last year, has risen since early this year and remains volatile.”
North & South America selected airlines daily share price movements (% change): 15-Jul-09