Severe weather won’t cancel airline profits
Despite severe weather conditions this week that forced airlines to cancel more than 6,000 flights, profits among U.S. carriers are expected to increase 20 percent this year to more than $6 billion, MarketWatch reported.
“As we had been predicting since early in 2010, there was no ‘double dip’ recession,” said Ray Neidl, an analyst with New York-based Maxim Group LLC. “What developed was a slow economic recovery, which we expect will moderately accelerate in 2011 and could carry over into the presidential election year of 2012.”
On Tuesday and Wednesday, hundreds of thousands along the East Coast were stranded by winter storms as many carriers canceled their flights 24 hours in advance in order to avoid costly federal fines for tarmac delays.
Airlines also lost millions of dollars in profits over the long Christmas weekend due to fierce blizzards on the East Coast, but the stock prices of major carriers will likely increase in 2011.
“Although we believe all of the major U.S. carriers have stock price appreciation potential of up to 20 percent or more this year, we believe that Delta, Alaska Air, Hawaiian, Allegiant Travel and Copa SA have the best chances of exceeding this outlook,” Neidl said.