Do High Air Fares Equal Profits?

Average domestic air fares in the first quarter of 2010 increased to their second highest level since 2001, rising 4.7 % from the first quarter of 2009, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported. The $328 first-quarter 2010 average fares were down 8.3% from the all-time high, not inflation-adjusted, of $358 in the third quarter of 2008. Airline revenue and profits may be directly related to fares, but they are a reasonable indicator of carrier health. Air fares excludes lease, personnel, jet fuel, and debt service costs. The stock market must see some correlation between fares and carrier viability. Continental Airlines CAL trades at close to $26. To read the rest, head over to 247WallStreet.com