NEW YORK (AP) -- Airline shares rose on Monday after an analyst's upgrade and the approval of a new pilot contract at United.
Dahlman Rose analyst Helane Becker upgraded some of the biggest airlines — including United, Delta, and US Airways — to "Buy" from "Hold." Broadly speaking, airlines have been paying down debt and benefitting from revenue that is growing faster than traffic, she wrote.
United struggled with its merger in 2012, but Becker wrote that "the airline turned the corner sometime during the past four months."
United Continental stock also benefited from pilots on Saturday approving a new, joint contract covering pilots who flew for United or Continental before the two airlines joined. The vote is a major step forward in the merger. Once seniority issues are worked out, the airline will be able to schedule crews to fly together regardless of which pre-merger airline they worked for.
Shares of United Continental Holdings Inc. rose 23 cents to $23.24 in afternoon trading. Delta Air Lines Inc. rose 17 cents to $11.39. US Airways Group Inc. shares rose 8 cents to $12.91.
JetBlue Airways Corp. had the biggest percentage gain, up 19 cents, or 3.4 percent, to $5.72. Becker upgraded JetBlue to "Hold" from "Sell," as revenue growth and operating margins improve.
Alaska Air Group Inc. shares rose 87 cents, or 2 percent, to $44.03. Becker raised her price target on the parent of Alaska Airlines to $53 from $45 and wrote that the company "remains one of the best positioned airlines, with a strong balance sheet, defensible route structure, and the ability to consistently execute."
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