Oil slide raises airline shares, industry conditions still volatile

11/4/2008 | Star-Telegram (Fort Worth, Texas) · TheStreet.com · Forbes

Airline stocks jumped on Monday as oil prices slid to near $65 a barrel and a veteran industry analyst predicted major airlines could earn up to $5.2 billion in 2009. "Consolidation has begun, resulting in a sharp reduction in capacity and higher average fares," FTN Midwest Securities analyst Mike Derchin said in a report. "We are currently forecasting that 2009 will be a strong profit year for the airlines, despite the recession." Derchin's prediction hinges largely on the price of oil, which he estimated at $80 per barrel for the year. But the Air Transport Association's chief economist sounded a cautionary note, warning that tougher environmental standards and higher taxes that are looming will strain an industry "that can ill afford additional government mandated costs."

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Star-Telegram (Fort Worth, Texas) · TheStreet.com · Forbes

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