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Bearish on Airlines (XAL Index) Replies |
rffrydr
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 Posted: Fri May 11, 2012 9:56 am Post subject: |
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October reflex? Saudis making no bones about it, they want to break/brake crude.
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rffrydr
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| Posted: Thu Oct 06, 2011 9:10 am Post subject: |
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XAL regaining Aug 8 level today. Merrill on european implications of AMR BK:
| Quote: | his note from Merrill
NH
American Airlines was down 33% in the US yesterday on speculation (widely
reported) that the company may need to file for bankruptcy. We believe that this
will inevitably have a sentiment read-across for the European airlines today, in
particular Air France.
NH
On our estimates Air France has gearing of c. 170% (vs. IAG and Lufthansa of c.
45%) and we believe that consensus estimates suggest that EBITDAR/interest is
one turn within covenant levels of 2.5x. That said, the company faces an
increasing capex backdrop in the years to come alongside an EBIT that is highly
sensitive to movements in yield. Holding all other variables stable, a 1% increase
in yields moves EBIT by c.30% in FY11/12.
NH
On our estimates, the current share price implies a FY03/12E EV/CE of 0.25x, a
c.30% discount to the 5yr historical average (0.39x). |
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rffrydr
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| Posted: Tue Oct 04, 2011 7:54 am Post subject: |
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DAL up this morning....UP! 
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HenryTo
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rffrydr
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| Posted: Fri Sep 16, 2011 7:25 am Post subject: |
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rffrydr
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| Posted: Sat Jul 23, 2011 2:06 pm Post subject: |
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Airlines have goosed up their fares to fill the gap left by uncollected excise taxes starting last night, midnight. This could be substantial if we stretch out another few weeks.
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rffrydr
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| Posted: Tue May 17, 2011 6:27 am Post subject: |
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From the flying UK CPI: The major surprise in the CPI numbers came from air transport, where prices increased by 29.0% m/m.
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rffrydr
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| Posted: Tue Apr 26, 2011 11:26 am Post subject: |
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Airlines, unlike auto, write-off the fuel-frenzy quarter--and stock looks forward to tighter times. Delta leads trades today up, 10%:
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Delta Chief Executive Richard Anderson said fuel was "the biggest challenge facing this industry and Delta is actively reducing capacity, implementing fare actions, hedging our fuel needs and attacking our cost structure in order to offset fuel's impact on our earnings."
In the latest quarter, Delta posted a loss of $318 million, or 38 cents a share, compared with a prior-year loss of $256 million, or 31 cents a share. Revenue jumped 13% to $7.75 billion.
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rffrydr
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| Posted: Sun Apr 17, 2011 11:05 pm Post subject: |
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There's a recovery story here staring the high oil headline right in the face:
http://www.latimes.com/business/la-fi-summer-fare-hikes-20110418,0,1739623.story
| Quote: | | For example, the cheapest round-trip flight from Los Angeles International Airport to Frankfurt, Germany, in the first week of May 2009 was $499, including taxes and surcharges, Parsons said. Last week, he said, the least-expensive flight for the same time period on the same route was $1,067. |
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rffrydr
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| Posted: Fri Mar 18, 2011 9:42 am Post subject: |
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| rffrydr wrote: |
I'm writing some may puts today see if we can't pick up some economic tailwinds into summer. Expect some kind of oversold rally soon and sharp retest to get outright long.
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Long 100 shares, what the hell. Looks like I can use the options premium decay as a built in stop. "Riskless" trade always attractive.
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rffrydr
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| Posted: Tue Mar 08, 2011 11:20 am Post subject: |
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Is it so surprising that even chickens can make scratch. 
Brent/WTI spread turned pretty good yesterday.
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rffrydr
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| Posted: Mon Mar 07, 2011 11:15 am Post subject: |
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Delta failed it's gap reach and has been riding the lower Bollinger down all year. Now at "double-dip" August lows. Summer being written off. Soros must be reducing his position by now, if not long since.
I'm writing some may puts today see if we can't pick up some economic tailwinds into summer. Expect some kind of oversold rally soon and sharp retest to get outright long.
Oil bearish and too chicken to trade it. Just bullish enough on airlines to take chicken long.
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rffrydr
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| Posted: Sun Feb 27, 2011 11:59 pm Post subject: |
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Buffett says he's got a 1-800 number when tempted to invest in airlines. He ended up going the biz route. Other than Wall ST. I, which ended with the UAL deal, there has been precious little history to be invested here. I still think they've pulled off something in the hit and a little money on Soros' tail under cover of the domino theory is not a bad idea.
Airlines: more downside than up
Published: February 25 2011 09:52 | Last updated: February 25 2011 20:40
| Quote: | Investors who think the oil price has overshot in the past week might be tempted to buy airline shares. After all, the sector’s profits are highly sensitive to changes to the price of jet fuel and the Bloomberg global airlines index has fallen 6 per cent in seven days.
But the potential downside to this strategy is much bigger than the upside. Imagine oil remains near $120 a barrel or even spikes higher. European airlines have only hedged 60 per cent of this year’s fuel needs and the rest of the world is even more exposed, Morgan Stanley estimates. Oil at just $100 a barrel last month prompted European low-cost carrier EasyJet to warn that its half-year loss would double.
Even when an airline is hedged, this only buys time to pass on the extra fuel costs to passengers. The trick is to do that without hurting demand. While the economic outlook is better than it was in 2008, the last time airlines faced oil prices this high, many US and European consumers still act like they are in a recession. Business travellers are less price-sensitive but cannot pull all the weight, even if corporate profits remain high.
Imagine instead that the Middle East settles down, and so does the oil price. Even then, airlines have problems. After a year in which passenger ticket prices rose as demand recovered, there are signs that airlines are returning to their self-defeating expansionary ways: capacity is now expanding more quickly than demand on some long-haul routes, according to UBS.
Investing in a sector that struggles even in good times to cover its cost of capital is rarely wise. The International Air Transport Association predicts that the industry will retain just 1.5 per cent of 2011 revenues as net profit – and that forecast assumes oil at $84 a barrel. |
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rffrydr
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| Posted: Thu Feb 24, 2011 9:34 am Post subject: |
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Airlines really holding in here all things considered. Looked to Delta this morning. No buy there for me; Soros feeling pretty good about himself now. My old favorite Lufthansa would be good, but at 1.30 euro. Will we watching for this.
Good indicator the cyclical bull is still in force.
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rffrydr
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| Posted: Tue Feb 15, 2011 2:56 pm Post subject: |
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Delta "introduces" economy comfort class.
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