Zacks Industry Outlook Highlights: Southwest Airlines, UAL Corp., US Airways Group, JetBlue Airways Corp. and Alaska Air Group Inc.CHICAGO--(BUSINESS WIRE)--Zacks.com releases the latest Industry Outlook. Today, Zacks Equity Research discusses the Airline Industry, including Southwest Airlines (NYSE: LUV), UAL Corp. (Nasdaq: UAUA), US Airways Group (NYSE: LCC), JetBlue Airways Corp. (Nasdaq: JBLU) and Alaska Air Group Inc. (NYSE: ALK).
A synopsis of today's Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/30462/Airline+Industry+Stock+Review+-+Feb.+2010.
Though almost all the carriers are expected to recover slowly in 2010, yet we favor Southwest Airlines (NYSE: LUV) with a Zacks #3 Rank, as we expect it to recover earlier than other carriers. Its low-cost model is an advantage. The airline has reported a 7.1% traffic increase in Jan 2010, with strong bookings in place for February and March.
It has also benefited from the "Bags Fly Free" initiative, causing it to attract a bigger share of business. Southwest has also maintained continued profitability for the last 30 years, even during periods of industry downturns mainly due to its strong fuel-hedging strategies. Low-cost airlines are expected to get a higher share of revenue in the future, and we should see structural changes in the industry and consolidation as a result of competitive pressures.
With demand for air travel slowly returning back, we believe UAL Corp. (Nasdaq: UAUA) and US Airways Group (NYSE: LCC) will benefit in 2010. These companies carry a Zacks #2 Rank.
JetBlue Airways Corp. (Nasdaq: JBLU) with a Zacks #4 Rank and Alaska Air Group Inc. (NYSE: ALK) with a Zacks #3 Rank signaled a cautious approach to the economic rebound as they released their financial results for the fourth quarter 2009. Although corporate bookings are picking up with more people flying, the mixed earnings show that the airlines still have costs -- pension, labor and other non-fuel expenses -- that can be a drag on profitability.
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Posted: February 12, 2010
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