Airline stocks rise on American Airlines' upbeat forecast
U.S. airline stocks rose after American Airlines Group Inc
Analysts said forecasts for the key performance metric from American Airlines, the No.1 U.S. airline, and smaller rival United Airlines confirm fares are trending higher due to rising fuel costs.
Non-fuel unit cost growth also seems to be reverting to historical levels, according to Cowen & Co analyst Helane Becker.
Mizoram Election Results 2023: Check out date, time of counting of votes, result announcement of 40 Assembly seats
PPF vs VPF vs ELLS Mutual Funds: Options that give you returns and tax benefits in your retirement planning
SBI Fixed Deposit (FD): How much return will you get on Rs 5 lakh investment in 1, 2, 3, 5 and 10 years?
12th Fail Box Office Collection: Vidhu Vinod Chopra-directed movie crosses Rs 50-crore barrier at domestic box office
2023 Exit Polls: Check when and where to view result predictions for Rajasthan, Madhya Pradesh, Chhattisgarh, Telangana, Mizoram election
Shares of American Airlines were up 3 percent and United Airlines was 6.2 percent higher. The U.S. airline index <.djusar> was up 2.5 percent.
American Airlines said it now expects its total revenue per available seat mile for the quarter to rise about 5-6 percent, compared with its prior guidance of 2.5-4.5 percent. The company also raised its pre-tax margin forecast to 6.5-7.0 percent, from 4.5-6.5 percent.
"The improvement in pre-tax margin is due to better than expected unit revenue in 4Q17," Becker said.
United, the No.3 U.S. airline, said on Tuesday it now expects fourth-quarter passenger unit revenue to be about flat, compared with its previous guidance of down 2 percent to flat.
"We believe that many buysiders were already modelling for something in the -1 percent to flat neighbourhood," J.P. Morgan analyst Jamie Baker said.
"The beat was driven by a combination of stronger overall yields as well as better than expected close-in demand, ordinarily a proxy for business travel. Frankly, we`re not surprised," Baker said in a note.
United, whose parent is United Continental Holdings
Shares of Delta Air Lines
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)