Sector Snap: Airlines rise on December wings

Reports of strong revenue trend in December help boost airline stocks

Associated Press

NEW YORK (AP) -- Airline stocks soared Thursday on reports of a strong holiday travel season and upbeat comments from United Airlines.

American Airlines and US Airways, both owned by American Airlines Group Inc. since a merger last month, said Thursday that traffic and a key revenue figure both increased sharply last month from the previous December.

United said late Wednesday that the same key revenue figure rose more than expected due to strong passenger traffic and prices throughout December. Other factors helped, including storms that led United to cancel 1,200 flights last month. Canceled flights can help airlines financially if they squeeze the same number of passengers on fewer planes.

The key statistic — revenue for every seat flown one mile — rose about 12 percent at United, 14 percent to 15 percent at Southwest, and between 9 percent and 12 percent at American, US Airways and Delta.

Last month's results were helped by a late Thanksgiving, which pushed some holiday-return travel into early December. The calendar windfall may have particularly helped Southwest because of its greater reliance on leisure travelers, said Raymond James analysts James Parker and Savanthi Syth.

J.P. Morgan analyst Jamie Baker raised his forecast of fourth-quarter earnings for United Continental Holdings Inc. to 70 cents per share from 10 cents per share. He slightly raised his profit forecast for Southwest Airlines Co. while reducing it for Delta Air Lines Inc.

In afternoon trading, United shares rose $3.39, or 8.3 percent, to $44.41; Delta rose $1.19, or 4 percent, to $30.99; American Airlines Group gained $1.45, or 5.3 percent, to $29.08; and Southwest rose 21 cents, or 1 percent, to $20.39.

Shares of JetBlue Airways Corp. fell 19.5 cents, or 2.2 percent, to $8.805. JetBlue, which is based in New York, struggled to deal with arctic weather in this week and briefly stopped flying at airports in New York and Boston.

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