NEW YORK, NY--(Marketwire -02/06/12)- Airline stocks have been on fire this year. The Guggenheim Airline ETF, which seeks to represent a modified equal-dollar weighted index designed to measure the performance of highly capitalized and liquid U.S. and international passenger airline companies, is up more than 24 percent in 2012 as higher ticket prices and leaner operations have boosted profits industry wide. The Paragon Report examines investing opportunities in the Airlines industry and provides Stock research on US Airways Group Inc. (NYSE: LCC - News) and JetBlue Airways Corporation (NASDAQ: JBLU - News). Access to the full company reports can be found at:
According to The New York Times the airline industry's recipe for success has been straightforward: "fewer airlines, fewer planes and fewer seats combined with higher ticket prices and more fees." William S. Swelbar, a research engineer in the Massachusetts Institute of Technology's International Center for Air Transportation, argues that "consolidation is having a significant impact on pricing, no doubt. And the industry has rid itself of unprofitable routes."
CNN reports that American Airlines' bankruptcy has many in the industry questioning if a merger is in its future.
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Last week JetBlue Airways reported that its fourth-quarter profit nearly tripled on a sharp increase in passengers. Revenue rose 22 percent to $1.15 billion. Higher ticket prices and fees drove its yield up 11 percent. JetBlue expects average fuel price per gallon, including hedges and fuel taxes, to be $3.18 in the first quarter and $3.17 for the full year 2012.
US Airways reported net income of $18 million, or 11 cents per share, in the fourth quarter. That compares with $28 million, or 17 cents per share, a year earlier. Excluding charges, it earned 13 cents per share.
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