Canaccord Genuity on Guggenheim Airline ETF (FAA): Is There A Double-Inverse Airline ETF?
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Rating Summary:
0 Buy, 0 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 28 | New: 14
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Canaccord Genuity on Guggenheim Airline ETF (NYSE: FAA): Is there a double-inverse airline ETF?
The International Air Transport Association (IATA) has cut its profit forecast for airlines in 2012 as rising oil prices threaten the bottom line. The IATA now sees full-year industry profit of $3 billion, down from its December estimate of $3.5 billion, largely due to an increase in its expected price of oil. Three months ago, the association estimated the average price of oil to be $99 per barrel versus its new forecast of $115 per barrel, with high oil prices replacing the European debt crisis as the concern du jour. Demand is expected to be more in line with supply than originally expected and load factors are expected to return to pre-recession levels. Tony Tyler, chief executive of the IATA, commented, “While we have seen some improvements in economic prospects, any further significant rise in the fuel price will almost certainly turn weak profits into losses.” He went on to say, “With GDP growth projections now at 2.0% and an anaemic margin of 0.5%, it will not take much of a shock to push the industry into the red for 2012.” Asia-Pacific carriers are expected to report the largest forecast by region at $2.3 billion while European carriers are expected to lose $600 million. In North America, carriers are expected to report total profit of $900 million, down from the December estimate of $1.7 billion.
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The International Air Transport Association (IATA) has cut its profit forecast for airlines in 2012 as rising oil prices threaten the bottom line. The IATA now sees full-year industry profit of $3 billion, down from its December estimate of $3.5 billion, largely due to an increase in its expected price of oil. Three months ago, the association estimated the average price of oil to be $99 per barrel versus its new forecast of $115 per barrel, with high oil prices replacing the European debt crisis as the concern du jour. Demand is expected to be more in line with supply than originally expected and load factors are expected to return to pre-recession levels. Tony Tyler, chief executive of the IATA, commented, “While we have seen some improvements in economic prospects, any further significant rise in the fuel price will almost certainly turn weak profits into losses.” He went on to say, “With GDP growth projections now at 2.0% and an anaemic margin of 0.5%, it will not take much of a shock to push the industry into the red for 2012.” Asia-Pacific carriers are expected to report the largest forecast by region at $2.3 billion while European carriers are expected to lose $600 million. In North America, carriers are expected to report total profit of $900 million, down from the December estimate of $1.7 billion.
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