Canaccord Genuity Morning Coffee on Guggenheim Airline ETF (FAA): Costs Take Flight

Canaccord Genuity Morning Coffee on Guggenheim Airline ETF (NYSE: FAA): Costs take flight.

An Airlines for America (A4A) report stated that U.S. airlines were in the red for the first half of 2012, despite a strong start to the year. The A4A is reporting that the 10 major U.S. carriers recorded a net loss of $1.07 billion in the first half of the year as profit margins deteriorated to -1.5% from the prior year level of -0.4%. The ten carriers include: Delta Airlines (NYSE: DAL), United Continental (NYSE: UAL), US Airways (NYSE: LCC), Southwest Airlines (NYSE: LUV), JetBlue (Nasdaq: JBLU), Alaska Air (NYSE: ALK), Spirit Airlines (Nasdaq: SAVE), Allegient (Nasdaq: ALGT), Hawaiian Holdings (NYSE: HA) and American Airlines. First-half expenses rose by 9.4%, largely due to a 13.1% increase in fuel costs. A4A Chief Economist John Heimlich commented, “There is a lot of pressure on carriers of all shapes and sizes, not just in the U.S. but across the globe, to continue to find ways to cut costs, expand revenues and improve productivity.”

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