Can This Airline Survive on Its Own?

Before you go, we thought you'd like these...
Before you go close icon

Recently released September airline traffic data shows that AMR, parent company of American Airlines, continues to struggle. American had a terrible month, experiencing problems with seats coming loose on some flights, and experiencing more delayed and canceled flights with more pilots calling in sick. Not surprisingly, AMR's total traffic dropped 2.8% in September, with domestic traffic falling 7.1%. One bright spot for the struggling airline was a 4% uptick in passenger revenue per available seat mile, which rose due to more effective international joint ventures.

Still, this has been a terrible month or so for AMR, which is trying to exit bankruptcy as an independent airline. One of its biggest obstacles to doing that, the reluctance of its pilots' union to agree to a deal, is showing no signs of changing despite the fact that the two sides have resumed talks. In the video below, analyst Brendan Byrnes explains why he believes that the most likely outcome is AMR merging with US Airways, and why most long-term investors should stay away from legacy airline stocks. 

The unpredictable and rising price of jet fuel is one reason to avoid airlines -- it can account for over 30% of operating expenses -- but there are companies that are poised to take advantage of the move away from petroleum and towards cheaper forms of energy like natural gas. We've picked one incredible natural gas company that presents a rare "double-play" investment opportunity today. We're calling it "The One Energy Stock You Must Own Before 2014," and you can uncover it today, totally free, in our premium research report. Click here to read more.


The article Can This Airline Survive on Its Own? originally appeared on Fool.com.

Brendan Byrnes has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Southwest Airlines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners