By Dividend Stocks Online:
Being frugal has been a growing trend and for good reason. Whether it be out of necessity, fear or wisdom we have certainly seen a shift into spending less in America. This trend is likely to continue for the foreseeable future.
Do you feel like you are paying too much for gasoline? At least you did not have to fill up for the Daytona 500. The special ethanol-blended fuel that NASCAR drivers put into their tanks at the race on Sunday cost more than twice the national average for regular unleaded. And at about 18 gallons per tank, that comes to about $150 a fill up in a car that gets single-digit miles per gallon!
HOW long ago seem the promising months of early 2012, when the American economy added jobs at a healthy 225,000 monthly clip. And how disappointing when the labour market slumped back into its now traditional spring-and-summer slump. The Bureau of Labour Statistics' June employment report, out this morning, is anticlimatic in its confirmation of the already-too-obvious: job creation is back in the rut that seems the default position for this recovery.
MUMBAI: Domestic airlines are anticipating another beneficial quarter this financial year, helped by the recent 11.7 per cent cut in jet fuel prices, a development that will help aviation companies sort out their balance sheet. Air turbine fuel (ATF) costs have gone down more than 40 per cent since the beginning of FY15. In fact, every 10 per cent reduction in fuel prices increases an airline's earnings before interest, taxes, depreciation and amortization (Ebitda) by 3-5 per cent, according to KPMG aerospace and defence partner and India head Amber Dubey.
It is the second time George Osborne has scrapped the fuel duty in the last six months. The Chancellor cancelled a similar 3p rise in petrol prices – due to have taken effect in January – in his Autumn Statement in December.
Osborne was under enormous pressure to scrap the duty after official figures yesterday blamed higher prices at petrol pumps for a rise in inflation to 2.8 per cent.
Inflation has remained stubbornly above the 2 per cent inflation target of the Bank of England. And economists warning inflation could hit 3.5 per cent by the summer.
Airline stocks could be poised for a rebound amid jet fuel price declines and traffic and capacity increases. While prices are still 39.4% higher than a year ago, prices are down 8.5% on the month and 10.9% on the week, according to IATA’s Jet Fuel Price Monitor. Meanwhile, many airlines are seeing increased traffic as they move to expand capacity amid a broad economic recovery.
Fuel Prices Fall, Fare Prices Rise
When it comes to the U.S. airline industry, many investors borrow their wisdom from Warren Buffett. For years, the Berkshire Hathaway CEO has stuck to his conviction that investing in airlines is like “pouring money into a bottomless pit.” His reasoning, partly drawn from an inopportune trade for US Airways stock that he made in 1989, is that airlines tend to earn thin profit margins despite requiring heavy capital investment up front.