Airlines' Unit Revenue Expected to Take Off

(Studio D’Xavier)

Zacks.com submits: Airlines companies have reported their June 2010 traffic results. Airlines traffic, measured in billions of revenue passenger miles, increased from an improvement in the global economy, improved business travel, international traffic and rising fares. Airlines are increasing their capacity in order to restore profitability and posted higher unit revenue growth for the month of June. The stocks have risen on account of improved June traffic.

By Zacks.com: The largest U.S. airline United Continental Holdings Inc. (UAL) expects unit revenue (passenger revenue per seat mile) to grow 9.5–10.5% in the third quarter despite domestic capacity cuts.

By Valuentum: Whenever we see a bullish article on airlines such as this one, we are compelled to remind individual investors that airline stocks are merely speculative bets on changes in the direction of crude oil prices and the economy. As we outline in our airline industry primer:

Zacks.com submits: Jet fuel prices rose over 53% as oil prices increased to above $100 per barrel, given the ongoing civil unrest in the Middle East. Despite the sharp rise in fuel prices, airline traffic picked up significantly in February, attributable to a strong revival in the economy. The month also saw improved performances on the heels of increased air fares and higher revenues collected from extra fees.

World Market Pulse submits:Asia has definitely taken the lead in the road to recovery as far as the Aviation industry is concerned with Asian airlines leading the way to a stronger recovery than their global peers amid rising passenger and cargo volumes helped by the economic slowdowns in Europe and the United States.

Zacks.com submits: Fluor Corporation (FLR) reported earnings per share from continuing operations of 76 cents for the first quarter of 2010 compared with the Zacks Consensus Estimate of 74 cents. Revenue was $4.9 billion, down from $5.8 billion in the first quarter of 2009.

Tom Lydon submits: The airline ETF may be set to soar after combating rising fuel prices, a global credit crunch, overcapacity and a host of other external factors that airliners are unable to control.