Today's Research on US Airways and United Continental: IATA Expects Airlines
to Post Net Profit of $8.4 Billion in 2013
LONDON, February 19, 2013
LONDON, February 19, 2013 /PRNewswire/ --
Back in December 2012, the International Air Transport Association (IATA)
provided its 2013 financial forecast for the airline industry. While IATA's
outlook for 2013 is cautious, improvement in the global economy should benefit
airlines such US Airways Group Inc. (NYSE: LCC), which recently announced a
merger with AMR Corp., and United Continental Holdings Inc. (NYSE: UAL), this
year. StockCall professionals have completed their technical analysis on US
Airways and United Continental and these free reports are accessible by
registering at http://www.stockcall.com/research
IATA's Cautious Outlook
In December 2012, IATA's Director General and CEO, Tony Tyler said that
airlines' net profits are expected to rise to $8.4 billion, which would leave
the industry with a 1.3% net profit margin. Tyler noted that it is good that
the airline industry is moving in the right direction, but the year ahead is
shaping up to be another tough one for the industry.
IATA expects global economy to grow 2.3% in 2013. Growth once again will be
driven by emerging economies. Passenger demand in 2013 is expected to rise
4.5%, while cargo demand is forecasted to rise 1.4%. IATA expects oil prices
to remain slightly moderate at $104 per barrel this year; however, IATA
believes that the premium paid for jet fuel refining will result in a smaller
decline in jet fuel prices to $124.3 per barrel.
Improving Global Economic Outlook Should Benefit Airlines
While IATA's outlook for the airline industry is cautious, signs of
improvement in the global at the start of this year augur well for airlines.
In its report, IATA cited the Eurozone debt crisis as a major concern.
However, since the start of this year, the Eurozone has shown signs of
stabilizing. There are still no signs of growth, though, with fourth quarter
GDP in the monetary union falling 0.6%, according to a report released last
One of the major trends in the airline industry, especially in the U.S., has
been consolidation. Two years ago, United Airlines and Continental Airlines
merged, forming United Continental Holdings Inc. Recently, US Airways Group
Inc. and AMR Corp., the parent company of American Airlines, announced a
much-anticipated merger. Be sure to read our latest technical research on
United Continental Holdings Inc. by registering at
AMR Corp. had filed for bankruptcy in November 2011 and since then there had
been talks of a merger between the bankrupt airline and US Airways Group Inc.
The merger agreement was finally sealed last week. The combined companies will
operate under the American Airlines name. Sign up for the free technical
research on US Airways Group Inc. at http://www.StockCall.com/LCC021913.pdf
As per the terms of the merger agreement, shareholders of US Airways Group
Inc. will receive one share of common stock of the combined airline for each
share of US Airways Group Inc. common stock they hold.
Doug Parker, Chairman and CEO of US Airways Group Inc., said that the combined
airline will have the scale, breadth and capabilities to compete more
effectively and profitably in the global marketplace.
United Continental Holdings Reports January Operational Performance
Earlier this month, United Continental Holdings reported its January 2013
operational results. The airline's consolidated traffic in January rose 0.9%,
while consolidated capacity fell 1.9%. Consolidated passenger revenue per
available seat mile (PRASM) rose an estimated 3% to 4%.
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