Just taking a price snapshot the morning after the QE3 day before: Friday 14 September 5.00am Brent November $117.40 Heating Oil October $3.2490 ES September 1461.00 ES December 1454.25 Closing prices from Thurs 13 Sept: Airline index $XAL 38.71 IYT $92.96
Airlines have done extremely well since my last post in this thread on 14 September 2012. The $XAL has more than doubled, but the S&P 500 is "only" up by about 33%. However in the last couple of weeks as $BRENT rose above $110, airline stocks suffered. The worst performers have been non-US airlines, such as GOL, AF (France), LHA (Germany). CEA and ZNH have done poorly in the last year, but their volume on the NYSE is quite thin. Of the US airlines, SKYW looks the weakest, and of the big-four, UAL looks weaker than LUV, DAL and AAL.
Shorting airlines because of oil is risky. Capacity is a bigger driver : and right now there isn't much of it. So airlines can pass oil prices on.
I disagree. Airlines are the most sensitive sector to substantial increases in the price of oil. They get hit on the revenue side (customers cancel discretionary flights), and they also get hit on the expense side (higher oil prices). There is a limit to the extent to which they can pass on higher oil prices to customers. Eventually there comes a point where it leads to lower revenue.
Depends what % each respective airline has hedged their exposure to jet fuel Exposure to rise in crude will be different for each Hope you bothered to look at their financials to ascertain (from the notes) the % jet fuel hedged (& duration) before blindly shorting
@yabz @Pekelo Sirs, indeed a super old post but I see you both use the Altman Z-Score to as a tool for stocks. I am interested in the current Z-Score for AAL, and cannot seem to find a free version of the Z-Score easily available on the internet. Any information is appreciated. Thank you