North and South American carriers rose with the wider market on Friday (05-Mar-2010), with the Dow (+1.2%) rising on news US job losses were smaller than expected in Feb-2010, withthe unemployment rate remaining at 9.7%. Furthermore, job losses totalled 36,000 for the month, much lower than the 67,000 expected by analysts.
The AMEX Airline Index (+0.8%) was up as a result, despite a gain in oil prices (+0.4%), to USD81.18.
Hawaiian gains despite disappointing traffic results
Hawaiian Airlines (+0.8%) gained slightly despite reporting a 0.7 ppt year-on-year slip in load factor for Feb-2010, to 82.3%, as the 5.0% decline in traffic outweighed the 4.1% reduction in capacity. Passenger numbers were also down for the month, falling 2.3%, to 626,590.
The airline additionally faces increasing competition from Allegiant, which is acquiring B757 equipment for the purposes of serving Hawaii from late 2010.
Southwest reports RASM growth
Southwest (+0.6%) was also up marginally, after estimating RASM for Feb-2010 rose 16-17%. However, the rise in share price was weakened by news passenger revenue for the month declined by approximately USD15 million as a result of weather-related cancellations and delays. According to MarketWatch, analysts expect the Feb-2010 storms to have affected US carriers’ revenues by over USD100 million.
In other LCC news, JetBlue (-0.2%) slipped after Fitch Ratings affirmed the Issuer Default Rating (IDR) for JetBlue Airways at 'B-' and the senior unsecured rating, which applies to approximately USD470 million of convertible notes, at 'CC' with a Recovery Rating of 'RR6'. The airline's rating outlook has been revised from 'Negative' to 'Stable'.
Copa Airlines (+1.7%) stated during trading that it plans to increase capacity by approximately 10% this year, a sign demand for the carrier is on the mend. During the year, Copa plans to take delivery of eight new B737-800s.
LAN (+1.6%) announced during trading it has increased the capacity of its domestic and international flight operations to and from Chile's Santiago International Airport to 54% of normal flight operations. The carrier now expects to return to normal Santiago operations in two weeks.
TAM (-2.9%) meanwhile made the biggest fall of the day.
- Allegiant to purchase six B757 aircraft to support Hawaii expansion;
- American Airlines takes delivery of 114th B737 (NG) aircraft;
- WestJet Airlines to launch its loyalty and credit card programme on 08-Mar-2010;
- Air Jamaica flights continue under Caribbean Airlines.
North & South America selected airlines daily share price movements (% change): 05-Mar-2010