Quick Hits: Airlines Could Gain Altitude by 2009-Minyanville

Quick Hits: Airlines Could Gain Altitude by 2009

Scott Reeves Aug 12, 2008 12:25 pm

Quick Hits: Airlines Could Gain Altitude by 2009


		Brief scrutiny of today's headlines.

Airlines apparently thought they’d find salvation in nickel-and-diming passengers for previously free services: Charging for pillows, for example, or for the privilege of checking that second suitcase.

Lower oil prices and flight cuts plus charging for services -- called “unbundling” in the airline industry -- could turn the industry around by 2009, The Wall Street Journal reports.

However, the Air Transport Association, a trade group based in Washington, DC, expects the industry to lose $7 to $13 billion in 2008.

Oil for September delivery fell to $113 a barrel on the New York Mercantile Exchange and recently fetched $114.55. That’s down about 22% from the high of $147.27 reached on July 11.

On Monday, a report from China said the country’s crude oil imports were down 7% from last year, suggesting that the economic slowdown in the US and Europe may be hitting Asia.

In general, airline stocks have been on the rise since oil futures started declining in mid-July.

Fewer flights will force travelers to scramble and help airlines boost fares - or at least reduce the availability of cheap seats.

Shares of US Airways (LCC) gained as much as 22% Monday before closing at $8.39 a share, up 5.4%.

United (UAUA) gained 16% before closing at $12.27 a share, up 10.24%.

American Airlines (AMR) gained 8.17% and closed at $12.18. Continental (CAL) rose 7.17% and closed at $17.75. Jetblue (JBLU) gained 2.64% and closed at $5.83.

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