Airline Stocks Rise on Strong Reports

Shares of most major airlines rose Tuesday on reports of strong passenger traffic in September.

Continental Airlines Inc. said late Monday that it expects to post a modest profit in the third quarter, as a 9.8 percent increase in traffic boosted revenue enough to more than offset higher fuel prices and the cost of disruptions from hurricanes. The Houston-based airline said problems related to Hurricane Rita would hurt September operations by about $25 million.

American Airlines, a unit of AMR Corp., Fort Worth, Texas, said September traffic rose 9.1 percent. Despite improved traffic numbers, the airline said the hurricanes, and the soaring price of jet fuel, would have a "significant negative impact on American's third-quarter results. But the company said it hadn't changed earlier projections for cost and revenue in the third quarter.

Shares of Continental rose 58 cents, or 5.9 percent, to $10.49 in midday trading on the New York Stock Exchange.

AMR stock rose 57 cents, or 5.1 percent, to $11.66 on the NYSE.

Shares of regional carrier Mesa Air Group, Inc., Phoenix, rose 93 cents, or 11 percent, to $9.38 on the Nasdaq Stock Market.

Frontier Airlines, Denver, stock rose 53 cents, or 5.4 percent, to $10.37 on the Nasdaq.

AirTran Holdings Inc., Orlando, Fla., shares rose 72 cents, or 5.6 percent, or 73 cents, to $13.69. Bear Stearns on Tuesday upgraded AirTran to "outperform" from "peer perform."

Lower oil prices Tuesday also attracted airline investors to the sector, which has been hit hard by the price of jet fuel. At the end of September, the price of jet fuel has risen 129 percent since the beginning of 2005. While tied to the price of oil, jet fuel prices have also been hurt by reduced refining capacity.

News stories provided by third parties are not edited by "Site Publication" staff. For suggestions and comments, please click the Contact link at the bottom of this page.