North and South American airline stocks were mixed on Thursday (03-Jun-2010), despite a number of carriers reporting improved passenger traffic for May-2010. Gains in airline stocks were mitigated as investors were cautious ahead of Friday’s key jobs report, with the Dow (+0.1%) gaining slightly in late trading, rallying from earlier losses.
The AMEX Airline Index (+0.4%) rose marginally as a result.
WestJet and Air Canada report traffic gains
WestJet (+3.0%) gained after reporting a 3.6 ppt year-on-year rise in load factor for May-2010, to 77.7%. The result came as traffic (RPMs) rose 18.9% for the month, on a 13.4% increase in capacity.
Also during trading, it was reported WestJet plans to sign five cooperation agreements with foreign carriers over the next 18 months in a bid to compete with Air Canada. Foreign carriers WestJet is targeting reportedly include British Airways, Japan Airlines, Mexicana, Delta Air Lines, Korean Air, China Eastern Airlines and Emirates.
Air Canada was flat for the day, despite reporting a 2.5 ppts rise in load factor for the month, to 82.0%. Traffic rose 6.0% on a 5.1% increase in capacity. President and CEO, Calin Rovinescu, stated this was the carrier’s sixth consecutive monthly improvement in traffic.
US Airways load factor rises only 0.3 ppts
US Airways (-2.4%) took the day’s biggest decline, after reporting only a 0.3 ppt increase in load factor for May-2010, to 82.5%, a weaker result than other North American carriers which have so released their traffic results for the month.
Traffic rose 1.8% on a 1.6% increase in capacity. Passenger numbers were up 1.4%, to 5.2 million.
More positively, the carrier estimated consolidated passenger revenue per available seat mile (PRASM) increased approximately 18% year-on-year for the month, while while total revenue per available seat mile increased approximately 19%. President, Scott Kirby, stated moving into the peak summer travel period, US Airways continues to be “optimistic as the revenue environment remains robust with continued strength in close-in bookings and overall yields”.
AirTran announces put option notification for 7% convertible notes due 2023
AirTran Holdings (-0.3%) slipped. The carrier announced during trading that it is notifying holders of its 7% Convertible Notes due 2023 to require AirTran to repurchase their Notes for cash (the 'Put Option'). The Put Option expires on 01-Jul-2010. The Notes are, subject to certain conditions, convertible into 89.9281 shares of AirTran common stock per USD1,000 principal amount of the Notes.
America Airline Daily is your one-stop shop for news, data and analysis from the dynamic North American, Caribbean and Latin American aviation markets. Other stories featured in today’s issue include:
- American Airlines pax up 2.1% in May-2010;
- BTS Bureau of Transportation Statistics reports Apr-2010 airline on-time performance;
- Southwest to launch Oakland-Corpus Christi service;
- Canadian North announces codeshare destinations with Air Canada;
- Airone Ventures to launch LCC services within the Caribbean and to the US.
North & South America selected airlines daily share price movements (% change): 03-Jun-2010