TAM (-5.6%) and GOL (-5.4%), South America’s leading airlines, each suffered over 5% falls yesterday. TAM is still suffering from Fitch Ratings’ downgrade last week, when it noted the “deterioration in TAM's credit profile, a result of the combination of high leverage and greater use of its formerly robust but still satisfactory liquidity position to finance its business”.
The downgrading of FedEx (-4.8%) by Stifel Nicolaus analysts, from 'buy' to 'hold', apparently led to its higher decline.
Meanwhile, US Airways (+1.6%), the only US airline to stay above the line yesterday, was propped up by the pricing of its USD150 million equity raising announced last week.
LCCs generally suffered the larger falls. JetBlue (-4.3%) and AirTran (-4.2%) were seen as most sensitive to the recent increases in fuel prices. These will progressively eat into their market advantages if the recent gains in oil prices are maintained. Southwest Airlines' stock eased 2.7%.
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North & South America selected airlines daily share price movements (% change): 11-May-09