US Airways: What Goes Up ... (Forbes.com article)

[N965VJ]

US Airways: What Goes Up ..
Melanie Lindner, 11.06.07, 3:15 PM ET

Investors should start flapping their wings, this airline's stock is going down.

US Airways took a nosedive on Tuesday after the company reported that traffic for the month of October fell 1.5% from October of 2006 to 4.9 billion sales passenger miles. Capacity, the number of available seats, fell 5.5%% to 6.1 billion from 6.4 billion in the same month a year ago. US Airways did, however, report its highest ever load factor, or fraction of available seats which are filled, at 80.5%, up 3.3 points from October of 2006.

Investors weren't too pleased with the airline's report, causing its stock to drop $1.87, or 7.5%, to $23.28 in Tuesday afternoon trading.

Another factor that might be driving down US Airways stock is a report released Monday by the U.S. Department of Transportation calling US Airways the most complained about airline in the month of September. The company had 2.13 complains for every 100,000 passengers, making the Tempe, Ariz.-based company the worst of the top 20 major U.S. carriers.

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[PHX PHLyer]

See Traffic Results for All Airlines

I don't see how this can be related to their traffic results. Besides AirTran, US had the BEST gain in traffic vis-a-vis their capacity. US load factor was up 3.3% to a new monthly record of 80.5%. United's LF was higher by about 0.6%, and Northwest's was the next highest (and highest overall) at 84.3%. US's traffic declined 1.5% versus a capacity decrease of 5.5%! Northwest, in comparison, saw their traffic decrease 1% against only a 1.9% decrease in capacity. And even jetBlue saw their traffic gain 7% on a capacity increase of 11.1%. Their load factor dropped almost 3% points. Yet jetBlue's stock didn't go down nearly as much as US's did. I don't see what gives. I have noticed that when oil prices increase greatly in one day, US seems to be affected the most. Similarly, when oil drops a lot, US's stock seems to go up the most. I'm sure it just has to do with how much US competes with Southwest, and when their costs are increased by a huge rise in oil prices, investors think that US is put in the worst position because of their cost compared to Southwest. Oil hit $97 a barrel today.

But wow, what a big loss today! Makes me think I need to buy the stock. It's a pretty good deal for where it is trading right now.

 

[Maark767]

See Traffic Results for All Airlines

I don't see how this can be related to their traffic results. Besides AirTran, US had the BEST gain in traffic vis-a-vis their capacity. US load factor was up 3.3% to a new monthly record of 80.5%. United's LF was higher by about 0.6%, and Northwest's was the next highest (and highest overall) at 84.3%. US's traffic declined 1.5% versus a capacity decrease of 5.5%! Northwest, in comparison, saw their traffic decrease 1% against only a 1.9% decrease in capacity. And even jetBlue saw their traffic gain 7% on a capacity increase of 11.1%. Their load factor dropped almost 3% points. Yet jetBlue's stock didn't go down nearly as much as US's did. I don't see what gives. I have noticed that when oil prices increase greatly in one day, US seems to be affected the most. Similarly, when oil drops a lot, US's stock seems to go up the most. I'm sure it just has to do with how much US competes with Southwest, and when their costs are increased by a huge rise in oil prices, investors think that US is put in the worst position because of their cost compared to Southwest. Oil hit $97 a barrel today.

But wow, what a big loss today! Makes me think I need to buy the stock. It's a pretty good deal for where it is trading right now.

I'd think twice about buying USAirways ( LCC ) stock.... this stock is headed down even further...

 

[NCFL]

See Traffic Results for All Airlines

Makes me think I need to buy the stock.

I've got some swamp land and a bridge for sale, too, if you're looking for solid investments.

I'm happy to report that I sold every stinking share of US stock in my portfolio (if you can call it that) the day it hit $80/share back in 1998. And how can this article site US' poor DOT performance in complaint statistics as a reason for the stock drop? It's rightfully been last (or darn close) of all majors for more than a year, if memory serves correctly. In many cases, US' complaint rate was double that of the next-crappiest competitor. US' service stinks. It stank prior to HP, and it stinks worse now. Late. Filthy. Surly. Draconian. And with HP mgmt at the helm now, one can add penurious, disorganized, low-class and uncomfortable to that list of descriptive terms.

If poor performance in the complaint statistics department were the litmus test for stock price, US would be trading down near $0.01 at this point.

 

[usair_begins_with_u]

You know how to make a small fotrune in airline stocks?

Start off with a large fortune.

I have been telling people since this stock was at $60 supposedly on its way up to $100, thats its a single digit value stock. There is no growth, no value, if you believed the dopey analysts that were pumping this POS shame on you. More than once, heck, more than five or six times, search the archives I told people to short LCC and they could not lose.

Im not a genius, im not a fortune teller, I only stand on the shoulder of giants. The Oracle of Omaha, the Great Warren Buffet himself has always maintained that there can be NO long term success in airline equities. I only listen and repeat. Wall Street analysts continually make bad calls on airlines, most of them ignore basic long term industry profitability models like Porter et al. The traditional valuation models do not apply to industries like the airlines because of the highly unfavorable economic structure of the industry.

It is my belief, thats sans regulation, the airlines will be in a painful, continual cycle of bankruptcy and restructuring. There is a sucker born every minute in the financial markets though and some idiot will always think that bailing out an airline instead of letting it crumble is a short cut to a cornucopia of unimaginable wealth. Until this cycle is broken, anyone who invests in airline stocks will ALWAYS lose.

I would still short LCC here, into the slowing economy. A combination of $100+ bbl oil, and an economy heading into recession will land LCC into the single digits in the next 8-12 months. A few long puts would be a more conservative bet. Any major consolidations will only temporarily bump share prices, but it will takes years and years to see real value from M&A, and the bounce of a new mega merger will fade, and share prices will drop back down.

 

[usair_begins_with_u]

Down another 4% today... don't try to catch a falling knife.. Run don't walk to the exits.

 

[AAA73Pilot]

Worst
But our winner is US Airways, which on Tuesday reported miserable traffic numbers for October. Revenue passenger miles declined 1.5% and capacity fell 5.5%. Load factor, meanwhile, rose to 80.5%, a new record.

In other words: US Airways flew less. But the times it did fly, its aircraft were packed tighter than sardines in a can.

Yet none of this is why the airline tops today's list of losers. This is: US Airways ranked worst among the major airlines in terms of customer complaints in September, according to Department of Transportation statistics.

Fewer flights. Packed aircraft. Subpar service. And this was the company that once promised to rescue Delta (NYSE: DAL) via a merger? Puh-leeze. US Airways -- Tuesday's worst stock in the CAPS world.

It's going to get a lot worse before it gets better. I wonder how many investors are willing to give ole Doug and Company more money for consolidation now? My guess is we're rapidly becoming a non player very quickly.

 

[PHL]

I'd think twice about buying USAirways ( LCC ) stock.... this stock is headed down even further...

I wouldn't. Except I'd short it to take advantage of the decline. But I don't speculate on individual stocks, so someone else can make a fortune doing that (or not...if a merger is announced, the stock will go up again...briefly)

 

[NCFL]

My guess is we're rapidly becoming a non player very quickly.

US and HP have been "also rans" since their respective inceptions. Never leading...always following. What was it one of the Wall Street pundits called US/HP after the merger announcement? "Two drunks holding one another up," or something like that. That description kind of takes on a new meaning with Dougweiser at the helm!

 

[usair_begins_with_u]

Teens here we come... WooOOooOOooOOooT

 

[N965VJ]

MarketWatch.com:

US Airways cut to neutral from buy at Goldman Sachs

By Laura Mandaro
Last Update: 10:18 AM ET Nov 9, 2007

SAN FRANCISCO (MarketWatch) -- US Airways Group, Inc.

LCC shares were downgraded Friday to neutral from buy by Goldman Sachs analyst Robert Barry, who forecast "rising U.S. macro pressure will make fuel headwinds harder for [US Airways] to offset, especially with less international flying vs. peers." Barry also cut his six-month price target to $24 from $31 a share. Among other reasons for his darkened view of the stock, Barry said consolidation and asset sales will remain a driver of airline stock performance, "and in this regard we think [US Airways] falls short of peers." Shares fell 3.5% in midmorning trading, worse than a 2.5% drop in the Amex Airline Index

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