Being a writer, I think I can lend the airline industry a hand: Specifically, I could formulate a template for each airline to report their quarterly results. It would have the basic three components of every airlines earnings report: net income/loss, total revenue, and a statement detailing just how high fuel costs surged this quarter.
OK, perhaps that was a little facetious, but honestly, it's growing tiresome that no matter what these airlines do to hedge their fuel bets, the bottom line is that the price of jet fuel is making it increasingly hard for them to remain profitable.
Yesterday a trio of earnings reports crossed the wire and, not surprisingly, all three shared a similarity -- rising fuel costs.
United Continental Holdings
On a smaller scale, JetBlue
Earlier in the week US Airways
All told, aside from JetBlue continuing to add capacity and Alaska cleaning up as usual, it appears investors are once again cheering on the "less bad" rally – only now it's migrated over to the airline sector, too! Ticket prices are indeed up over the year-ago period, but they've fallen by 2.4% over the prior quarter. As fuel prices rise, major carriers like United, Delta, US Airways, and the now-bankrupt American Airlines are going to feel the pinch. With the airline sector remaining very hit-or-miss going forward, I continue to see a very select group of regional carriers as the only potential values in the sector. Until fuel costs stabilize, the rest of this sector is running on fumes.
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