US analysts warn over airline shares

Sunday, 12 Jan, 2005 0

Analysts in the US are warning investors to steer clear of the major airlines, which began the year by slashing prices on major routes. The analysts believe a potential price war is only one of many problems for carriers such as Delta Air Lines, United, American, Northwest, Continental and US Airways group. Heavy fuel costs, staff problems and pension obligations make them a risky investment, say market observers. “Unless you are a highly risk tolerant investor, avoid airline stocks,” said Brian Hayward, airline analyst at Zacks Investment Research in Chicago. “There will be trading opportunities. If you think you’re good enough to trade on where oil is going to go and you think you’re nimble enough to trade on that information, good luck.” Delta has been forced to slash fares following intense competition from no-frills airlines such as JetBlue and Southwest Airlines. “It is no co-incidence we are seeing simplified pricing. It was inevitable for the industry, given the aggressive growth of low-cost carriers,” said Smith Barney analyst Daniel McKenzie. “There’s probably been no carrier in history that has struck as much terror in the corporate offices of the cyclical majors as JetBlue. That’s what Delta has to respond to.”



 



Most Read

Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know

Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham

Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago

Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research

Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact

Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference

Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role

Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal

Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination

Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness

Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future

Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
TRAINING & COMPETITION
Skip to toolbar
Clearing CSS/JS assets' cache... Please wait until this notice disappears...
Updating... Please wait...