The big airlines–Delta Air Lines (DAL) and American Airlines (AAL), among them–took off in 2013. Can they reach cruising altitude in 2014?
EPA Absolutely, says Cowen’s Helane Becker. She writes:
2013 proved to be a very strong year for the airlines, trading up 57.6%. Our 2013 thesis of capacity discipline, last major airline merger and the beginnings of capital deployment announcements played out in line with expectations. We expect 2014 to be a strong year for the group, as the airlines have really only benefited from merger
announcements rather than merger synergies. We expect [United Continental (UAL)] and American to continue rationalizing capacity, helping with the pricing environment. United will announce their return of capital plans in late 2014 to be executed in 2015, while Delta will announce further capital deployments at their annual meeting in June.
Becker’s top picks: Southwest (LUV), United Continental, Delta and American.
Top picks they may be, but they haven’t all performed that way. While American Airlines has gained 1.6% to $26.96, Delta Air Lines has risen just 0.2% to $29.28, United Continental has ticked down 0.1% to $39.90 and Southwest Airlines has dropped 1.3% to $19.17.
Is this the result of a shift into American from other airlines?
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