Airline Stocks Soar

Sector Snap: Airline Stocks Soar

Jan. 29, 2008, 10:23AM

NEW YORK — Airline stocks rose Tuesday, buoyed by better-than-expected fourth-quarter results from several carriers as well as falling crude oil prices.

The Amex Airline Index rose more than 2 percent to 34.95 as light, sweet crude for March delivery fell 32 cents to $90.67 a barrel on the New York Mercantile Exchange. Fuel is one of the industry's highest costs.

On Tuesday, JetBlue Airways Corp. and Northwest Airlines Corp. both reported narrower losses than Wall Street expected, indicating that carriers are tightening their belts for non-fuel costs and pushing to maximize revenue.

Airlines have been struggling to maintain profits with surging fuel costs and intense domestic competition that limits their ability for significant fare hikes. Carriers are also facing pressure to trim capacity to fit more passengers on fewer, more profitable flights.

AirTran Holdings Inc. also posted a narrower fourth-quarter loss Tuesday, as it sought to offset higher fuel costs with higher traffic and occupancy.

JetBlue shares led sector gains, rising 48 cents, or 9.7 percent, to $5.42 in morning trading. Northwest rose 23 cents to $18.17 and AirTran rose 29 cents, or 3.4 percent, to $8.75.

Shares of GOL Linhas Areas Inteligentes SA, which was recently added to the airline index, rose $1.24, or 6.6 percent, to $20.18. The Brazilian carrier said Tuesday that it plans to buy back up to 5 million shares, or nearly 9 percent of its outstanding stock.

Shares of ExpressJet Holdings Inc. continued to rise on speculation it will be bought by larger rival SkyWest Inc. Its stock gained 13 cents, or 5.1 percent, to $2.68. Its shares rose 25 cents, or 10.9 percent, to close at $2.55 on Monday. SkyWest shares rose 27 cents to $25.53.

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