June 06, 2007

Airlines slip as oil steadies

NEW YORK (MarketWatch) -- Airline shares drifted lower Wednesday as crude-oil futures steadied, with the sector slipping along with the broader equity market.

The Amex Airline Index was down 0.7% at 50.43 points in early action. All 11 of the benchmark's component shares traded to the downside. Investors cued off, among other things, carriers' latest traffic data from U.S. Airways Group, Northwest Airlines Corp. and Alaska Air Group.

U.S. Airway said Wednesday its traffic in May rose 0.1% as capacity fell 1.8%, translating to a rise in load factor, or the percentage of seats filled with paying passengers, to 81.5% from 79.9%. The Tempe, Ariz., airline operator also said its unit revenue fell in May.

Also Wednesday, Alaska Air Group said May passenger traffic for its Alaska Air operations rose 5.7% and its capacity rose 6.2%. The Seattle-based company's Horizon Air unit had a May traffic increase of 6.1% and a capacity rise of 7.9%.
Late Tuesday, Northwest said May traffic was flat compared with the year-ago period as capacity rose 1.9%. Load factor fell 1.6 percentage points to 84.3%, the Eagan, Minn.-based carrier said.

Meanwhile, MAIR Holdings Inc. said Wednesday fourth-quarter loss narrowed to $1.2 million, or 6 cents a share, from $54.1 million, or $2.63 a share, in the year-earlier period. The Minneapolis and St. Paul, Minn.-based regional operator of Big Sky Airlines said it benefited from the resolution of Mesaba Aviation bankruptcy claim with Northwest.

By Padraic Cassidy, MarketWatch

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