I believe lower jet fuel prices will play a primary role in facilitating airline companies reporting

For a long time now Airline stocks were perceived as highly volatile and risky due to complex labor disputes and erratic fuel prices. However, with consolidation cheap plane ticket in several areas, which resulted in positive synergies transforming the airline industry into an attractive investment. At present, the industry looks well balanced with relatively lower fuel prices and a higher passenger volume. In addition, several airlines have made purposeful efforts in increasing average pricing and cutting costs, cheap plane ticket leading to higher margins.
I believe lower jet fuel prices will play a primary role in facilitating airline companies reporting strong growth over the next few quarters. Before we go deeper, let's examine the revenue streams of both Delta and U.S. Airways in order to identify, how both airlines generate their respective cheap plane ticket revenues.
Both Airlines generate the highest percentage of revenues cheap plane ticket through their domestic operations with Delta contributing 38% and U.S. Airways contributing approximately 44% to its overall revenues. However, the second highest contributing revenue stream for Delta comes from its international routes at around 31%; in contrast U.S. Airways generates cheap plane ticket its second highest revenues through its express carriers at around 24%. The remaining revenues for both companies are generated cheap plane ticket through regional carriers and cargo.
The sharp drop in fuel prices is expected to stimulate growth in airlines stocks such as Delta and U.S. Airways. According to U.S. Energy Information Administration, the jet fuel spot price peaked earlier this year during February at around $3.2/Gallon; however since then the price has dropped cheap plane ticket to $2.7/ Gallon.
It must be comprehended by potential cheap plane ticket investors that jet fuel represents approximately 33% of the total cost incurred by airlines and any drop in the cost of jet fuel significantly reduces the operating expense. Delta Airlines is due to release its second quarter earnings today, and I firmly believe we will witness a noticeable drop in its fuel expense, resulting in higher profitability.
At present, both Delta and U.S airways appear an attractive option with the latter trading at a heavy discount. cheap plane ticket The U.S. airways TTM PE ratio is trading at around 5.69, in comparison cheap plane ticket Delta and Southwest Airlines trade around 18.41 and 26.29 respectively. cheap plane ticket Given that U.S. Airways posted robust quarterly results (4% like for like revenue growth) the stock seems to be trading at a discount. The company operates cheap plane ticket on a 7% operating margin, which is marginally higher than the industry average. Furthermore, the airline has posted a remarkable 122% return on its equity, which makes this stock a buy.
In addition to the attractive valuation of U.S. Airways, Delta has been successful in driving growth through various cost-cutting measures. The airline has taken up a stringent cost cutting initiative as it replaced several smaller regional jets with larger ones in order to enhance its operating efficiency. Moreover, the company is making a strong effort in reducing its Non-fuel unit cost by enforcing improved resource cheap plane ticket management and cheaper maintenance solutions.
Even though someone cheap plane ticket like Warren Buffet deems investing in airlines stocks risky and an easy way to lose money; nonetheless, these two stocks have broken all rules as they have posted robust numbers. I believe we are going to witness robust growth reported cheap plane ticket by both companies as we move deeper into 2013 (including September, which is usually deemed cheap plane ticket a volatile month for the airline industry) predominantly due to higher unit prices, cost cutting initiatives and increasing corporate travel.
First international flight to Vail, Colorado Maui beach closed after shark attacks swimmer Wednesday morning cheap plane ticket Delta adds new service to Aspen Pseudoscience - a new niche for Oklahoma Tourism Tulsa, Oklahoma, USA should look at tourism Low-budget travelers from Japan may target Hawaii and Guam in 2014 Travel and Tourism Spending in the United States American Eagle flight makes emergency landing in Albany