Seeking Alpha

IATA: Airline traffic up 6.2% in May

  • IATA reports passenger traffic grew by 6.2% in May, marking a deceleration from the 7.6% growth seen in April.
  • International demand was up 7.0%, while domestic demand rose 4.6%.
  • Growth by region: Asia Pacific +7.3%, Europe +6.1%, North America +4.4%, Middle East +13.2%, Latin America +9.1%, Africa +1.9%.
  • Related stocks: AAL, UAL, DAL, RYAAY, CPCAY, SINGY, CEA, ZNH, CPA, GOL, LFL, DLAKF, AIDIF, QUBSF, JBLU,ALK, HA, AIRYY, MLYAF, AFLYY, VLRS, LUV.
Comments (11)
  • zorro2828
    , contributor
    Comments (550) | Send Message
     
    Yesterday, the airlines were hammered .. including AAL and now May was a great month and overcapacity does not seem to be there at all... Airlines have become for the most part lean and mean ... AAL caught a ratings upgrade to $54 yesterday and the stock was off a couple of bucks.. Great time to start or add to a position which I think will pay off handsomely by Christmas.. Personally I bought more AAL yesterday :-)
    3 Jul, 08:38 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5425) | Send Message
     
    And brent is falling.
    3 Jul, 10:08 AM Reply Like
  • nelsonknelson
    , contributor
    Comments (4) | Send Message
     
    Also, saw your profile. I am also bullish on GILD. BX maybe. Similar outlook. Good reasoning. Best to ya...
    4 Jul, 06:39 AM Reply Like
  • nelsonknelson
    , contributor
    Comments (4) | Send Message
     
    Absolutely, Zorro. Right on the money.

     

    And fuel cost is down to one-quarter of the Available Seat Mile (ASM) cost, and that includes corp overhead.

     

    No overcapacity, increase in fares on many key routes. Contracts that get down pilot costs on the primary carrier's smaller equipment fleet, not just the American Eagle franchisees.

     

    Doug Parker was competent as hell at US Air, and this grab of American was genius for locking up routes making the combined whole the airline serving the most single destinations in the USA, as well as a leader in both Europe and Asia.

     

    I'm long AAL (call) options, and a down day can be really costly, but they're staggered far out into January, and I got a few positions cheap enough I bought 100 contracts on each of them. I started playing with AAL as soon as the merger of tickers converted my US Air stock over. Two of my 100-contract buys. are already in the money.

     

    Yep, totally bullish on AAL. (Do have a hedge though, and you should too!...)
    4 Jul, 06:39 AM Reply Like
  • nelsonknelson
    , contributor
    Comments (4) | Send Message
     
    Exactly, and the Saudis, heck, even Libya, are increasing production to make up for any shortfall. And, now it appears Iraq's output will remain safe.

     

    Meanwhile, there are long-term threats to crude prices pushing them downward, such as alternative fossil fuels (natural gas and USA-exported LNG), and even alternative energy -- just matter of time before this country looks like Germany with every other edifice having solar on the roof.

     

    In the short-term, airlines are well-hedged to tolerate fuel-price jitters. In the long-term, they're looking at fair skies.
    4 Jul, 07:48 AM Reply Like
  • kchristiank
    , contributor
    Comment (1) | Send Message
     
    I am playing a similar game, swing trading DITM long calls with various expiration dates. This is a great stock to do this on because of the lower than average PE, but like you said, got to be able to withstand those harsh down days.
    7 Jul, 02:00 PM Reply Like
  • Momintn
    , contributor
    Comments (3855) | Send Message
     
    So why did AAL go down yesterday?
    3 Jul, 08:54 AM Reply Like
  • Papa of Four
    , contributor
    Comments (551) | Send Message
     
    I had picked LFL as one of my stock to benefit from the world cup this year.
    The 9% increase in Latin America would seem to support my thinking. The previous year they also saw 18% currency devaluation relative to the dollar. With the local currencies stabilizing and increased traffic this one has just been overlooked. Should see a nice pop over the next 6 - 12 months as it is far less expensive than many of its peers.
    3 Jul, 01:26 PM Reply Like
  • dancinboots
    , contributor
    Comments (8) | Send Message
     
    Supposedly airline stocks went down due to the impending hurricane and it's expected effects.
    3 Jul, 05:13 PM Reply Like
  • zorro2828
    , contributor
    Comments (550) | Send Message
     
    There was a spurious rumour from Delta that suggested coming over capacity and they lowered some metrics going forward ( although I have not been able to confirm this rumour or action) Just more hot air to move stocks and get the uninformed to sell in a panic.. AAL is sound, and unlike some in the world, the sun will rise tomorrow and people will need to travel for work and play... I have a very large position in AAL and for my money... 2016 should see the stock in the mid to high 60's as they benefit from the recovery and synergies from the rebirth... Happy Red, White and Blue Weekend everyone
    5 Jul, 09:04 AM Reply Like
  • zorro2828
    , contributor
    Comments (550) | Send Message
     
    More nonsense from Air France and European carriers where they are warning about overcapacity... AAL is North American's Big Boy and as such, they will be doing fine.. AAL is off again today and this is just another great time to buy more.. Can't wait for their earnings report!
    8 Jul, 11:35 AM Reply Like
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