The U.S. Airlines industry has gone through several ups and downs in the past five years. Major negative influences on the industry included skyrocketing oil prices since 2005, economic recession in the U.S. since 2008, global economic downturn in 2009 and the "swine flu" outbreak. The airlines industry is cyclical and sensitive to a number of key drivers, the most prominent of which is the world price of crude oil. Since the beginning of 2009, prices of crude oil have been half of what they had been the year before, creating some relief for airlines. However, some industry operators hedged their fuel contracts at higher rates and are still paying the price. Many of the top airlines in the industry have responded by reducing services and aircraft fleet sizes, introducing new fees and higher fuel surcharges and reducing the number of people employed. Even with the price ...

Companies featured in this edition of the newsletter: CHIP, ENZ, GERS, IWEB, OMCM, ONEZ, XSNX

Markets hit fresh highs for ‘09 yet again last week, as the first round of earnings helped to assuage investor concerns that operating results would underpin robust gains in equities this year. All told, the Dow gained 130 points to end the week at 9995 after briefly cracking the 10,000 mark, gaining 1.3% on the week and extending its gains to 13.9% on the year. The Nasdaq gained 0.8% on the week to close at 2156, up 36.8% on the year, while the S&P 500 and Russell 2000 gained 1.5% and 0.2% respectively, bringing their YTD totals to 20.4% and 23.4%.

Earnings stole the spotlight last week as things got off to a strong start early with JP Morgan handily beating expectations calling for $0.51 per share, reporting earnings of $0.82 per share. Citigroup

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The markets were down for most of the day, until a late rally sent two of the three major indexes positive, all except the NASDAQ which was down 0.19%.  The Dow Jones and S&P 500 were up 0.32% and 0.14% respectively, closing at 8799.26 and 946.21.  The 10-year saw prices climb once again, as the yield ended at 3.792%.  Oil was down today settling at $72.04, while gold also had an off day settling at $940.70.

Late Thursday night, Blackrock [BLK: 176.56, -6.04 (-3.31%)] agreed to buy Barclays Global Investors from Barclays Plc [BCS: 19.27, -0.63 (-3.17%)] for 37.8 million shares of common stock and equivalents and $6.6 billion in cash.  The deal was worth a total of $13.5B.  This deal will make Blackrock and BGI the world’s biggest fund manager, managing over $2.7 trillion in assets.  The buzz about a potential buy of BGI by

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While few airline carriers can really admit to “loving to fly and it shows”, Delta Airlines has given some cheer back by lowering their fares from New York to Tel Aviv to $617, the lowest set fare ever on this route. The fares, which will be available only through the end of this week, apply to flights through the end of March. The new price reflects a $132 drop in fuel surcharges.

According to the Globes article:

Delta Airlines commercial director for Israel Esty Herskowicz said that the fare referred to a whole class, not to an allocation of seats. She added that seats were available at this price on most flights during the period of the campaign.

I guess Israel really sees some benefits when the price of oil plummets.

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Thursday October 30, 2008 Navivest

Delta Air Lines, Inc. (DAL) and Northwest Airlines, Inc. (NWA) completed their merger yesterday, after they got the go ahead from the justice department. The news that both companies were in merger talks first leaked on February 11, 2008.

Under the all-stock $2.6 billion dollar deal, Northwest Airlines (NWA) is now a wholly owned subsidiary of Delta. The merger creates the world’s largest airline.

Northwest Airlines (NWA) stockholders will receive 1.25 Delta (DAL) shares for each Northwest Airlines (NWA) share they own and based on Delta’s (DAL) closing stock price on Oct. 29, 2008, this exchange ratio works out to $9.99 for each Northwest Airlines (NWA) common share.

Tags: Northwest Airlines  Delta Airlines  Merger

 

Had there not been a massive financial crisis crippling the U.S. economy over the past two months and seemingly dominating the public's short attention span for news, this very well could have been the foreign policy election of the post-Cold War era. Even Vladimir Putin has incredibly suggested that the war in Georgia was masterminded by the U.S. government with the aim of giving John McCain a vehicle to the presidency - though while a preposterous argument, one could still sense a note of disappointment that his "we are all Georgians" speech couldn't hold the headlines for more than a day. Nowadays in their stump speeches, if either candidate talks about a financial aid package to Georgia, most voters will likely be thinking of bailouts for Delta Airlines and Aflac to shore up jobs in the Atlanta area.

Shares of Northwest Airlines Corp. (NWA) jumped 10.63% on Wednesday morning after chief executive Doug Steenland said that he expected the merger with Delta Airlines (DAL) to be wrapped up by the end of this year in spite of opposition from labor unions.

He added that Northwest can reap profit if crude oil price stabilizes near the $100-mark. According to Reuters, Steenland refuted any doubts that the credit crunch will cast a shadow on the merged airline as the entity would have $6 billion in cash on closing.

Delta is also up 11.14% a day after AP reported that airline stocks were some of the star performers in the third quarter, with most major carriers clocking double-digit percentage hikes.

"NWA" Free Stock Analysis: Buy? Sell? Hold?"DAL" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research