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| September 3, 2012 08:20 AM EDT | Reads: |
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NEW YORK, NY -- (Marketwire) -- 09/03/12 -- After a strong start to the year, airline stocks have begun to falter. Higher fuel prices resulted in reduced profit margins for airlines during the first half of 2012, as fuel accounts for approximately 34 percent of the industry's costs. The Guggenheim Airline ETF (FAA) has fallen roughly 12.5 percent since mid-July. The Paragon Report examines investing opportunities in the Airlines Industry and provides equity research on Delta Air Lines, Inc. (NYSE: DAL) and JetBlue Airways Corporation (NASDAQ: JBLU).
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Airlines for America, a U.S. airlines trade organization, in their midyear economic outlook reported U.S. airlines first half expenses increased by 9.4 percent. Profit margins have declined to -1.5 percent in the first half of 2012 from -0.4 percent in the same period a year ago. Rising fuel prices has been one of the major reasons for the decline in profit margins as fuel cost increased 13.1 percent.
"There is a lot of pressure on carriers of all shapes and sizes, not just in the US but across the globe, to continue to find ways to cut costs, expand revenues and improve productivity," A4A chief economist John P. Heimlich said.
Paragon Report releases regular market updates on the Airlines Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at www.ParagonReport.com and get exclusive access to our numerous stock reports and industry newsletters.
Delta Air Lines is investing more than $3 billion through 2013 in airport facilities and global products, services and technology to enhance the customer experience in the air and on the ground. The company reported that consolidated passenger unit revenue (PRASM) increased 4.5 percent for the month of July as compared to the prior year.
JetBlue reported record second quarter operating revenues of $1.3 billion, an increase of 11.0% versus last year. "Our strong second quarter unit revenue results reflect our continued success in attracting both leisure and higher yielding business traffic while growing our network," said Robin Hayes, JetBlue's Chief Commercial Officer.
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Published September 3, 2012 Reads 229
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