AC.B share price dive

[aerodude]

What's going on at AC.B? Apart from the oil prices, all other airline are in gains today with AC.B being sold off as if in a garage sale.

[turbo-beaver]

Perhaps the Twaites decision is coming out.

[CanadianEh]

Investors are getting jittery about union negots too. Add in uncertainty about oil and that pretty much explains the dive. If there are any labour disruption we'll see prices below $2 again.

[V1ummmm]

Great. Just bought 3000 shares and managed to lose 15% in one day. Anybody got any dirty dishes they need cleaned...?

[Norwegianwood]

Great. Just bought 3000 shares and managed to lose 15% in one day. Anybody got any dirty dishes they need cleaned...?

Nope, but I do have 2 basement bathrooms that are wallpapered with old airline shares.......
Advice to self, never, never buy airline shares again, amen!

[duranium]

Perhaps the Twaites decision is coming out.

I would venture a guess that you are probably correct. Should be '' very very interesting '' as sargeant Shultch of Hogan's Heros days would have said...

[Jastapilot]

http://online.wsj.com/article/BT-CO-201 ... 11244.html

[Flightlevels]

Not to mention that both AC and WJ have to start using a new accounting method to report their Q starting this year. We are going along with the way Europe reports. It's like when we changed to the metric system...and here too the American carriers aren't following. There is more info on this from the WJ conference call on their last quarter. They were giving guidance on the subject. So the mom and pop stock buyers will probably shy away even more.

[Norwegianwood]

With oil prices climbing above $100 a barrel and beyond, there has been a dramatic sell-off of airline stocks in the past week.

This is perhaps not surprising, given fuel often account for about 30% of an airline’s costs.

But David Tyerman, Canaccord Genuity analyst, said the sell-off might actually represent a buying opportunity for investors.


He said he believes the strength of the economy and a tight supply/demand equation currently in the market should allow airlines to continue to increase prices, and that rising energy costs won’t dent their profitability as much as investors seem to fear.

“Our research shows that economic conditions appear to be a far stronger driver of airline profitability and share prices than oil prices,” he said in a note to clients.

“Accordingly, we think that recent airline share price decreases could provide investors with a nice buying opportunity,” he added.

He said while airline profitability did crumble in 2008 as oil prices spiked, their earnings have steadily risen alongside oil prices since early 2009. Mr. Tyerman said he expected that trend to continue, allowing airlines to offset increasing energy costs for now.

He has a “buy” rating on both Air Canada and WestJet Airlines Ltd.

Scott Deveau

.

[yycflyguy]

Interesting. I am a gambler but I think the spiking energy prices will have a greater affect than what is being suggested. Oil crippled most airlines when it hit $143. With the Mid-East turmoil, I wouldn't be surprised to see this spike surpass that high water mark. Good for your financial portfolio if you have Energy stock, bad if you are putting gas into your car or Jet A into your plane.

[Sea2Sky]

I can't agree. The spiking oil prices a few years ago was coupled with growth (relative to now). Since then, OPEC has imposed significant production limits that can be eased to free up supply this time around. The global economy is not in a position to support similarly inflated oil prices, and they know it.

[yycflyguy]

It couldn't be supported by the airline industry in 2008 either. Here is a short list of airlines that went Tango Uniform with oil above $100/bl.

Aloha Airlines 31 March 2008
ATA Airlines 3 April 2008
Skybus Airlines 5 April 2008
Frontier Airlines 10 April 2008 (successfully restructured)
Eos Airlines 26 April 2008
Sun Country Airlines 6 October 2008
Primaris Airlines 15 October 2008

I think expecting OPEC, and the politically volatile Mid-East to control this spike is unreasonable.

[Sea2Sky]

market pulse
March 8, 2011, 3:26 a.m. EST

OPEC lifting oil output to cool pricing:

Robert Daniel TEL AVIV (MarketWatch) -- Key members of OPEC, including Saudi Arabia, Kuwait, the United Arab Emirates and Nigeria, are lifting oil output to push back oil prices, which have soared during the unrest in the Arab states, Tuesday media reports said. The move would address global concerns that the unrest in the Arab nations might interrupt global oil supplies, as well as worries that higher oil prices might send inflation soaring or depress economic growth, reports said. In particular, a production increase at the Organization of the Petroleum Exporting Countries would about make up the shortfall in supplies out of Libya, which is currently wracked by a civil war, reports said. Kuwaiti Oil Minister Sheikh Ahmad al-Abdullah al-Sabah told reporters Tuesday that OPEC was in talks about increasing production but hadn't yet decided to do so, Reuters reported.

[ettw]

Great. Just bought 3000 shares and managed to lose 15% in one day. Anybody got any dirty dishes they need cleaned...?

You only lose 15% if you sell.....otherwise you're on a ride.

ETTW

[CanadianEh]

Great. Just bought 3000 shares and managed to lose 15% in one day. Anybody got any dirty dishes they need cleaned...?

You only lose 15% if you sell.....otherwise you're on a ride.

ETTW

Bingo. If labour disruptions happen we could have a tremendous buying opportunity on our hands. We all know that Air Canada's going to be around for a while. I wouldn't pick up any shares for more than $2.

[yycflyguy]

Wasn't too long ago they were trading at 97 cents.

[CanadianEh]

Wasn't too long ago they were trading at 97 cents.

Right you are. Don't think we'll see the stock get depressed by that much, unless we have another recession of epic proportions like the last.