US Airline Shares Slip As Recessionary Fears Take Hold

Shares of major U.S. air carriers were slipping Thursday with the wider market on new recessionary concerns, but at least one analyst said that some airlines have fared surprisingly well despite fewer passengers.

At last check, the Amex Airline Index declined about 1.7% to 25.63 points, with all of its 13 components in the red. In the past 52 weeks, the benchmark index has moved within a range of 38.77 to 12.66 points.

The eight major carriers were all down, with American Airlines’ parent company AMR (AMR) off 2.3% to $11.36; Continental (CAL) down 3.1% to $20.14; U.S. Airways (LCC) off 2.8% to $8.83; and Delta (DAL) down 2% to $11.64.

After Wal-Mart Stores (WMT) trimmed its profit outlook because of lower consumer spending, the Dow Jones Industrial Average shed more than 100 points to stand at about 8,669.

In the past week, airlines have been reporting their December statistics, with consolidated mainline traffic down 4.9%, according to a report from FTN Midwest. A 7.9% reduction in seat capacity, however, helped raise load factors by 1.8 points to 79%, on average.

Three airlines reported “surprisingly good” revenue-per-available-seat-mile results, the investment research firm said. Continental’s RASM jumped an estimated 3.5% to 4.5%; U.S. Airways’ rose 3% to 5%; and JetBlue Airways’ (JBLU) increased a whopping 15%.

“Demonstrating any pricing power in a deep recession is new positive territory for the airlines and reflects capacity discipline and improved yield management techniques,” said FTN analyst Michael Derchin. “Combined with low oil prices, these factors are expected to produce solid profits in 2009.”