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Posted
Aug 14 2008, 01:39 PM
by
Matt Koppenheffer
Airline stocks have been the place to be lately. Continental has more than doubled since bottoming out in July, Delta is also up 100% from its lows, and UAL... well, after touching below $3 per share it's blasted off to over $12. The reason for all this renewed optimism? Let's all say it together: falling oil prices.
On The Motley Fool's CAPS service, CAPS member MENGIV blogged about the run in airline stocks and the fact that analysts are starting to upgrade the beleaguered group. In fact, he noted that JPMorgan expects as much as $13 billion in cost savings industry-wide due to falling fuel prices.
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Posted
Jul 10 2008, 04:17 PM
by
Matt Koppenheffer
Rating:
I typically skip over the periodic emails that I get from various airlines for being part of their frequent flier programs, but the subject line of the email from Delta yesterday -- "An Open Letter to All Airline Customers" -- caught my eye. And it's a good thing I read it, because the letter brought it to my attention that there's an evil group of speculators out there that are driving up oil prices and making all of our lives miserable (please be sure to note my sarcasm).
The letter ended with the plea "We need your help. Get more information and contact Congress by visiting www.StopOilSpeculationNow.com." Interested to find out if the airlines actually have found conclusive evidence that speculators are responsible for pushing up oil prices I followed the link. Unfortunately, instead of evidence I got "While everyone is aware that supply and demand constraints contribute to price increases, there’s another force at work that, like gravity, is invisible yet powerful. This force is rampant speculation.
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Posted
Apr 23 2008, 05:15 PM
by
Matt Koppenheffer
Rating:
Airlines, ugh! what a lousy investment they've been recently. Is there a better way?
After managing to hit $40 per share back in early 2007, AMR, the parent of American Airlines, has plummeted over 80%. UAL, United's parent, peaked at $50 right around the same time and has since fallen to $13. Continetnal? Ditto. US Air? Ditto. I'm sure Delta would have taken a similar kamikaze dive too, but it didn't emerge from bankruptcy until midway through 2007. Everybody's airline sweetheart Southwest has held up a bit better, but even it's down nearly 30% over that timeframe.
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Posted
Apr 03 2008, 02:17 PM
by
Matt Koppenheffer
Rating:
If you need proof that it's a tough time to be in the airline business, just ask the folks at ATA. After filing for Chapter 11 bankruptcy protection earlier this week, the airline bowed out completely after it lost a key contract.
Not enough proof? You can also talk to Aloha Airlines. On Monday, the Hawaiian airline also shut the cockpit door -- so to say. The sad message on its website simply reads: "Sorry... After more than 60 years of serving Hawaii Aloha Airlines is no longer operating."
What of the rest of the bunch? On Thursday Glenn Tilton, the CEO of United Airlines parent UAL, was talking up the need for industry consolidation, particularly in the face of $100 oil. Tilton was quoted as saying "The case for change including consolidation was compelling a year ago and has to be more so today." That could also probably be rephrased to read, "We really don't want to go bankrupt... again."
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Posted
Nov 02 2007, 02:11 PM
by
Matt Koppenheffer
Rating:
It's been a challenging decade for the airlines. The 2001 terrorist attacks body slammed the industry, employee relations have been less than stellar as they try to cut costs, and the seemingly unstoppable price of oil continues to crimp business. American Airlines and Delta just pushed through some price hikes aimed at offsetting the rocketing price of jet fuel, and United and Southwest did some of the same last month.
For investors, the question is whether there is opportunity to be found in the face of these headwinds. On The Motley Fool's CAPS service, players are split on the prospects for Southwest, a long-time favorite among investors. Though there are fair number of Southwest bulls, the stock has just a two star rating -- suggesting that it's not among the best investment opportunities in the 5,000-stock CAPS universe.
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