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American Airlines in Chapter 11. |
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Released on Tuesday, November 29, 2011, 8:00 PM ET
Pittsburgh, PA (SpeculatingStocks) - American Airlines (NYSE:AMR), the nation’s fourth largest carrier, announced on Tuesday that the company entered into Chapter 11 bankruptcy protection. A new CEO has been appointed, who backs the bankruptcy proceedings. The Chapter 11 protection will allow American Airlines to renegotiate their labor contracts, a point of contention that has been holding the company back.
The story behind this in terms of the market is that other airlines are going to benefit from American Airlines not being able to be aggressive for a while.
JetBlue Airways Corporation (NASDAQ:JBLU) is a company that could benefit from American Airlines being in Chapter 11. JBLU moved 10%+ on the news and trended up throughout the day on Tuesday. JBLU is a profitable company with $3.78 billion in revenue last year and $97 million in profit. They are known for their new approach to the airline industry and great customer service.
Delta Air Lines, Inc. (NYSE:DAL) is the #1 airline out there in terms of fleet size and scheduled passengers carried annually. DAL is in a great position to take advantage of American Airlines being in Chapter 11. DAL generated revenue of $31.7 billion in 20101 and had a profit of $593 million. DAL moved up close to 5% on the American Airlines news. DAL can be aggressive with over $4 billion in cash and short-term investments on the balance sheet.
US Airways Group, Inc. (NYSE:LCC) recently slouched to a new 52-week low at $3.96. LCC moved 4.45% on the American Airlines news and is now trading at $4.46. LCC is trading at a market cap of only $723.02 million. LCC had revenue of $11.9 billion last year and a profit of $502 million.
Airline stocks as a whole are significantly off of their 52-week highs. This looks like a great time to look at Airline stocks. A significant amount of attention is coming onto the sector with American Airlines in the news so much.
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