Tue, Dec 29, 2009
Christmas Bomb Scares Likely To Have No Effect
Industry analysts expect little movement on airline stocks in
response to the attempted bombing of NWA flight 253 and a second
scare on Sunday. Experts foresee little change in airline
traffic volume, so stock prices shouldn't dip.
Roger King, an analyst for CreditSights in New York, told the AP
that in November the volume of people flying was up 2 percent
compared with a year ago. Airline stocks started to regain
value during the second half of 2009 as people began flying again
and ticket prices edged up. Stock prices for the parent
companies of American, Delta, and Continental roughly doubled since
July 1 while United's shares tripled in value.
King thinks these markers will overshadow any individual
security events for Wall Street investors. In December 2001,
shares of major airline companies barely budged on the Monday
following the arrest of 'shoe bomber' Richard Reid.
"The airline industry is constantly exposed to these types of
events," King said. "A failed attempt like that really doesn't do
much in terms of revenue."
Analysts expect that even new security procedures that frustrate
travelers won't stop them from flying in large numbers or send
stock prices down. Demand from the airlines' high-margin
business travelers could be dampened, however, if the new security
measures prove to make air travel significantly more onerous, said
Kevin Mitchell, president of the Business Travel Coalition.
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