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Finally, blue skies for airlines

Diantha Parker Oct 19, 2006
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Finally, blue skies for airlines

Diantha Parker Oct 19, 2006
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TEXT OF STORY

BRIAN WATT: The nation’s most profitable airline, Southwest, is expected to post a healthy profit when it releases 3rd Quarter earnings today. Yesterday, American Airlines announced its first back-to-back profitable quarters in 6 years. Are the skies finally clearing for the troubled airline industry? Diantha Parker reports.


DIANTHA PARKER: American was the first major carrier to post 3rd quarter results — a profit of $15 million, compared to a loss of $153 million this time last year.

Analysts expect Southwest to do well too, predicting gains anywhere from 20 to 23 cents a share, nearly $180 million in net income.

There were worries this summer’s London terrorist plot would have a long term chilling effect on the airline industry.

But analyst Ray Neidl, with Calyon Financial, is optimistic.

RAY NEIDL: Looking at the 4th quarter, you’ll see a rebound with lower fuel prices. And I think the London effect will wear off in October, at least that’s what the airlines are hoping.

American acknowledges the London scare cost them $50 million and Neidl says 3rd quarter earnings for all airlines will reflect a similar hit.

Still, Neidl says, even the most strapped carriers are seeing their highest booking numbers since September 11.

In Chicago, I’m Diantha Parker for Marketplace.

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