Extreme Losses Threaten Airline Stocks

According to the International Air Transport Association (IATA), Europe’s sovereign debt crisis has the potential to push EU airline industry into extreme losses in 2012. That horrific number could top $8 billion – larger than during the financial crisis of 2008.

“The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the euro-zone sovereign debt crisis,” said Tony Tyler, IATA’s director general.

However, for North American carriers the outlook appears not to be so grim. IATA expects a profit of $1.7 billion in 2012.

Here’s how airline stocks are trading on the news:

United Continental Holdings (NYSE:UAL): UAL shares recently traded at $20.59, up $0.46, or 2.29%. They have traded in a 52-week range of $15.51 to $27.72. Volume today was 982,802 shares versus a 3-month average volume of 6,143,590 shares. The company’s trailing P/E is 11.83, while trailing earnings are $1.74 per share.

JetBlue Airways Corporation (NASDAQ:JBLU): JBLU shares recently traded at $4.76, up $0.05, or 1.06%. They have traded in a 52-week range of $3.40 to $7.13. Volume today was 930,612 shares versus a 3-month average volume of 5,073,720 shares. The company’s trailing P/E is 19.94, while trailing earnings are $0.24 per share.

Southwest Airlines Co. (NYSE:LUV): LUV shares recently traded at $8.54,. They have traded in a 52-week range of $7.15 to $13.59. Volume today was 843,963 shares versus a 3-month average volume of 10,022,900 shares. The company’s trailing P/E is 43.57, while trailing earnings are $0.20 per share.

Delta Air Lines Inc. (NYSE:DAL): DAL shares recently traded at $8.59, up $0.12, or 1.42%. They have traded in a 52-week range of $6.41 to $13.50. Volume today was 1,907,514 shares versus a 3-month average volume of 12,505,300 shares. The company’s trailing P/E is 16.21, while trailing earnings are $0.53 per share.

Spirit Airlines Incorporated (NASDAQ:SAVE): SAVE shares recently traded at $15.53, up $0.16, or 1.04%. They have traded in a 52-week range of $10.18 to $17.48. Volume today was 14,204 shares versus a 3-month average volume of 181,086 shares. The company’s trailing P/E is 10.54, while trailing earnings are $1.47 per share.

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