Sector Snap: Airlines mostly down on economic news

AP News
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Posted: Nov 24, 2009 1:40 PM

US Airways was the only airline stock in the green Tuesday, after the Phoenix-based airline said it will delay delivery of 54 Airbus jets until at least 2013 so it can hold on to more cash.

The company said delaying the deliveries will reduce its aircraft capital expenditures over the next three years by $2.5 billion.

US Airways will take delivery of 28 planes over the next three years, which it called a more manageable pace when the airline industry is still weak.

CEO Doug Parker said in a message to employees that the moves will boost the company's available cash by about $150 million this year and $450 million by the end of 2010.

Shares rose 11 cents to $3.21 in afternoon trading.

Meanwhile, oil prices fell. Benchmark crude for December delivery lost $1.41 to $76.15 a barrel on the New York Mercantile Exchange.

The rest of the airline sector slipped with the broader market on reports showing tepid consumer confidence and slower economic growth.

A research analyst with Avondale Partners said Tuesday that airline stocks will likely continue to rise and fall according to economic predictions, after shrinking their schedules and fleets to accommodate lower demand. Bob McAdoo said the airlines stocks are becoming attractive investments because they have positioned themselves for improving earnings as the economy recovers next year.

Among airline stocks, American Airlines parent AMR Corp. was unchanged at $5.56. UAL Corp., the parent company of United Airlines, lost 19 cents, or 2.7 percent, to $6.95. Delta Air Lines Inc. gave up 28 cents, or 2.3 percent, to hit $7.55.