Wednesday, April 23, 2008

Airline Industry Continues to Get Pummeled

This is not shaping up to be a good year to fly OR to own airline stocks. Recent articles in the WSJ are forecasting this summer's travel season to be worse than ever in terms of crowded planes and cancelled flights. As for owning shares of an airline? The cost of jet fuel is making it harder and harder for airlines to turn a profit. All one needs to look at is the recent bankruptcy announcements by ATA, Aloha, Frontier and Skybus. iMiners' press release database allows any user to search press releases by date range and industry (and other criteria as well), so I just did a query for the airline industry to review recent releases. We have a useful application which shows the percentage change of a company's share price on the day of a release (or the next day if the release was issued after the market closed). As I scroll through releases from recent days it does not look pretty. United shares were down 36% yesterday, and AirTran shares were down 21%. JetBlue was down 6% and Alaska Air down 7%. American Airlines was down 14%. Not a good earnings season thus far.

The only interesting press release that looks like had a positive impact on an airline's stock was Frontier's announcement on April 17 "Two Industry Veterans Join Frontier Management Team". The company's stock price went up nearly 19%. Other than that the database is just showing lots of red.

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