American Airlines Lowers 2015 Guidance, but Why?
Lower capacity guidance In its latest update, American Airlines (AAL) lowered its full-year overall system capacity growth outlook by approximately 1%. The company estimates its full-year domestic capacity growth will be…
The North American airline majors such as Delta Air Lines and American Airlines are locked in a dispute over market access with the major Gulf carriers such as Qatar and Etihad Airways.
American Airlines took advantage of lower interest rates due to its improved credit ratings to refinance each of its secured term-loan facilities at lower interest rates.
American Airlines (AAL) stock was listed on the market after it completed its merger in December 2013. The stock has generated about 50% returns since then.
American Airlines experienced a large decline in passenger unit revenues. Yet at the same time, it derived enormous fuel-cost benefits thanks to its no-fuel-hedging policy.
American Airlines announced its quarterly results on July 24, 2015. Positive expectations saw the stock open about 2% higher at $43.08. And the company reported its best-ever quarterly profits.
Southwest is among the big airlines that have come under the scanner for probable price fixing of ticket fares in order to maintain high profits.
During 2Q15, Southwest authorized a new $1.5 billion share repurchase program, along with a 25% hike in its quarterly dividend.
Southwest is known to be the pioneer of low cost travel in the industry. Its 42-year record of profitable operations is enough to prove the success of the company’s business model.
Southwest Airlines (LUV) saw a strong 7.9% year-over-year growth (or YoY) in traffic numbers over the corresponding quarter last year.
The strong performance in Southwest’s bottom line was possible because of savings in fuel costs.
Southwest Airlines (LUV) declared its 2Q15 earnings on July 23, 2015. The earnings came as a mixed bag for investors.
In the shipping industry, valuations are generally higher in bad times—the profitability is lower. Similarly, valuations are lower in good times.
With higher demand for petroleum products, the demand for crude oil rises. This is beneficial for the crude tanker industry.
Seaborne crude oil imports for the week ending July 3, 2015, were 3.09 MMbpd. This was a rise of 127,000 bpd from the previous week.
US oil production has been rising due to the shale revolution. It’s rallying for the top producer spot. It indirectly affects the crude tanker industry.
In June 2015, Brent crude oil prices have been range-bound between $62 and $65 per barrel. In July, the prices have started to fall.
The US and China are in close competition for being the world’s top crude oil importer. In June, China snatched the top position from the US.
China is the largest automobile market. It has the highest automobile sales in the world. The country’s automobile sales drive the oil consumption.
Secondhand vessel prices reflect the short and medium-term outlook for the crude tanker industry. They’re more reactive to the spot market shipping rates.
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