Aviation Industry (incl Maintenance, Repair & Overhaul)

Re: Aviation Industry (incl Maintenance, Repair & Overhaul)

Postby winston » Sat Sep 26, 2015 6:27 am

The airline business is booming… Here’s what you need to know

by Justin Dove

Source: The Crux

http://thecrux.com/the-airline-business ... d-to-know/
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Postby behappyalways » Tue Oct 06, 2015 10:25 am

Air France bosses have shirts ripped from their backs as they escape furious employee mob
http://www.telegraph.co.uk/finance/news ... s-mob.html
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Re: Aviation Industry (incl Maintenance, Repair & Overhaul)

Postby winston » Thu Oct 15, 2015 8:47 am

3 Airline Stocks That Should Depart Your Portfolio

Airline stocks have been flying high, but now it's time for them to land

By Rebecca McClay

Source: Investor Place

http://investorplace.com/2015/10/airlin ... h73P6Sqcy4
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Re: Aviation Industry (incl Maintenance, Repair & Overhaul)

Postby winston » Tue Nov 03, 2015 9:19 pm

Foreign Manufacturers Behind China’s First Homegrown Passenger Plane

By Joshua Philipp

Source: Epoch Times

http://www.theepochtimes.com/n3/1889691 ... ger-plane/
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Re: Aviation Industry (incl Maintenance, Repair & Overhaul)

Postby winston » Mon Nov 23, 2015 7:28 am

This Volatile Industry Is Ready for Takeoff

by Bob Creed

There are four reasons for this...
1. Airlines are finally enjoying the benefits of years of cost-cutting.
2. The industry is benefiting from improved aircraft efficiency and falling oil prices.
3. Passenger numbers are on the rise as improving unemployment rates have given many families more spending power.
4. Airlines are pocketing more revenue than ever from passenger fees.


Source: The Oxford Club

http://www.investmentu.com/article/deta ... lJJn3YrKM8
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Re: Aviation Industry (incl Maintenance, Repair & Overhaul)

Postby winston » Sun Nov 29, 2015 7:35 am

IATA Cuts Global Air Travel On China Slowdown: Airlines Slump

By Shuli Ren

The IATA now sees the number of air passengers to double to 7 billion by 2034, with an annualized 3.8% growth rate. The organization previously saw 4.1% growth to 7.4 billion.


Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... nes-slump/
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Re: Aviation Industry (incl Maintenance, Repair & Overhaul)

Postby winston » Thu Dec 03, 2015 12:43 pm

by behappyalways

FAA downgrades Thailand over aviation safety concerns

http://edition.cnn.com/2015/12/02/aviat ... index.html
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Re: Aviation Industry (incl Maintenance, Repair & Overhaul)

Postby winston » Thu Dec 10, 2015 9:01 am

Read This if You're Thinking of Buying Airline Stocks By Brian Weepie

Some of the biggest winners of the oil-price decline have been airlines.

Rising sales and falling operating costs – thanks to low oil prices – have helped push the share prices of airlines higher.

But that doesn't mean you should rush out and buy these stocks…

As regular readers know, crude-oil prices have declined 65% since June 2014. The drop has helped lower the cost of jet fuel (which is derived from crude oil). The price of jet fuel has fallen from its most recent peak of $3.30 per gallon in February 2013 to $1.21 per gallon today.

This means fuel costs – as a percentage of the total operating expenses of U.S. airlines – have also dropped. You can see this in the table of the major U.S. airlines below.


Fuel as a % of Operating Expenses
Company Q3 2012 Q3 2015 Decrease
American Airlines (AAL) 34.2% 21.9% -12.3%
Delta Air Lines (DAL) 25.8% 23.3% -2.5%
Southwest Airlines (LUV) 35.9% 22.9% -13.0%
United Airlines (UAL) 35.1% 19.7% -15.4%
Source: Bloomberg

As you can see, each of these companies spent less on fuel in the third quarter of 2015 than in the third quarter of 2012… even though their sales increased over this period. For example, American Airlines' sales increased 66% during this time, but the company's fuel costs fell from 32.8% of sales to 17.4% of sales.

Falling operating costs and rising sales have increased airlines' profit margins. You can see this in the table below of these companies' earnings before interest, taxes, depreciation, and amortization (EBITDA) margins from the third quarters of 2012 and 2015.


EBITDA Margin Company Q3 2012 Q3 2015 Increase
American Airlines (AAL) 8.1% 23.4% 15.3%
Delta Air Lines (DAL) 14.2% 25.1% 10.9%
Southwest Airlines (LUV) 9.9% 24.5% 14.6%
United Airlines (UAL) 11.0% 23.7% 12.7%
Source: Bloomberg

This has pushed the share prices of airlines higher. The Dow Jones U.S. Airlines Index – which tracks a basket of airline stocks – is up around 300% over the past three years. That's some serious growth. It has outperformed the S&P 500 by six times.

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Meanwhile, Delta and Southwest are up more than 400% and 350%, respectively, in the same time frame.

This outperformance might have you thinking of buying airline stocks. But be careful.

Low crude-oil prices have led some airlines to reduce or remove their fuel hedges. Fuel hedges are contracts that airlines enter into to lock in future jet-fuel costs. For example, an airline could lock in today's low fuel prices for the next year. That way, if there is an uptick in price, it would continue buying fuel at today's rock-bottom prices. This is what airlines SHOULD be doing right now.

Locking in the cost of jet fuel is important for an airline. It gives management certainty about its future costs. If the company doesn't know how much it will have to pay for fuel, the best thing that management can do is tell Wall Street analysts what it expects (hopes) will happen.

But many airlines have been gambling that oil prices will remain low… and haven't been hedging.

American Airlines, for example, dramatically reduced the amount of fuel it hedged starting in 2013. Per Bloomberg, the company decreased its fuel hedges as a percentage of total purchases from 40% in the second quarter of 2013 to 19% by the end of that year.

Since then, American Airlines hasn't hedged at all. With oil prices continuing to drop, this has worked for the company. Its share price is up more than 80% in the past three years.

But things can change. Unrest in the Middle East could throw off the supply-demand dynamics of oil without any notice. That could push oil – and jet-fuel – prices higher… and many airlines could end up paying more than they expect for fuel. This would increase their operating costs and decrease their profit margins.

Of the four companies above, Southwest had the most fuel hedged (43%) at the end of the third quarter. United is 23% hedged. Like American, Delta doesn't have any hedge contracts in place. That's because, in 2012, Delta acquired an oil refinery to produce its own jet fuel.

As long as oil prices remain low, most airline stocks will likely continue to do well. And since its stock hasn't soared as much as the others, American is the most attractive on a short-term basis. But if you're looking to invest in the sector on a longer-term basis, I recommend looking at Southwest.

Source: Growth Stock Wire
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Re: Aviation Industry (incl Maintenance, Repair & Overhaul)

Postby winston » Fri Dec 18, 2015 10:58 am

This industry is set to post record profits on lower fuel costs

by Frank Holmes

Source: U.S. Global Investors

http://thecrux.com/this-industry-is-set ... uel-costs/
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Re: Aviation Industry (incl Maintenance, Repair & Overhaul)

Postby winston » Mon Dec 21, 2015 3:41 pm

<Research Report>CICC Recommends Buying Chinese Airlines; Top Pick CHINA SOUTH AIR

CICC, in its report, commented that the valuation of Chinese airlines are now bottoming while the correlation of oil prices and share performance has been distorted significantly.

Should renminbi depreciates by 5% next year, their results can still grow by 30%.

Furthermore, as the Chinese New Year is approaching, there will be a great chance of seeing an increase in both the volume and turnover.

The broker recommended buying Chinese airlines. CHINA SOUTH AIR (01055.HK) was the top pick, with a rating of "Recommend". The target prices of its A/H-shares were RMB12.5/HK$8 respectively.

Meanwhile, CICC rated AIR CHINA (00753.HK) and TRAVELSKY TECH (00696.HK) at Recommend, with a target price of HK$9 and HK$17.

Source: AAStocks Financial News
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