Airline-sector stocks gained ground Thursday amid optimism about a pension bill that stands to ease the financial pinch facing U.S. carriers and another decline in oil prices.
Shares in American Airlines parent AMR Corp. and Continental Air Airlines Inc. were leading the charge. In midday New York Stock Exchange trading, AMR rose 85 cents, or 7.4 percent, to close at $12.41, while Continental advanced rose $1.38, or 13 percent, to close at $11.88.
According to the latest version of a pension reform bill in the U.S. Senate, the two carriers will be given extra time to pay off underfunding in their pension plans. The same privilege was granted last week to Northwest Airlines Corp. and Delta Air Lines Inc. after the two carriers filed for bankruptcy protection.
Despite record passenger volumes, many U.S. airlines are struggling in the face of unmanageable labor costs and high fuel prices, which hit record levels in the wake of hurricanes Katrina and Rita.
The pension bill, which still needs to be discussed in the full Senate and in the House of Representatives, would help reduce the financial burden. A sharp decline in oil prices in recent days stands to help the carriers reduce their expenditures on fuel.
On Thursday, oil prices plunged to two-month lows, as some refineries whose operations were halted by the storms begin coming back online and consumer demand is hampered by high retail prices.
Other rising airline stocks Thursday included JetBlue Airways Corp. shares, up $1.12, or 6.2 percent, to settle at $19.17 on the Nasdaq Stock Market, and Southwest Airlines Co. shares, up 20 cents, or 1.3 percent, to close at $15.21 on the NYSE.
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