The airline industry would be hilarious if it weren't so sad. Check out these two headlines:
- "Airline stocks up after United's quarterly profit"
- "Airline stocks fall after Continental's report"
You'd have found both at MarketWatch yesterday, posted just hours apart. How's that for irony? We love you, airlines! Wait, no we don't!
None of the numbers were great. UAL's
But headlines can deceive, and they did here. UAL, a recent YouTube victim, achieved that profit in part by cutting costs some 52%. Fuel expenses in particular fell 64%, and United's per-share net loss excluding special items improved to $2.23 a share, from $21.57 in the year-ago quarter.
Investors may have been more impressed by management's more bullish outlook on cost reductions. Management now says that it will be able to cut costs per available seat mile (CASM) by $150 million more than it had planned as of January.
But Wall Street had much less enthusiasm for Continental's
As of this writing, Continental is taking the biggest hit among airline stocks, but Southwest
Southwest earned $54 million despite a 9% decline in revenue, to $2.6 billion. Fuel costs fell 23% to $1.79 per gallon. So why the sell-off? Perhaps because CEO Gary Kelly isn't expecting an instant recovery.
"While our second quarter unit revenue trends outperformed the industry, our total operating revenues were down almost nine percent from a year ago and six percent on a unit basis," Kelly said in a press release. "Demand for business travel remains weak, and we continue to stimulate traffic with more discounted and promotional fares."
Shocking. We love you, airlines. Oh, and we hate you, too.
Taxi towards related Foolishness: