Dahlman Rose Gives Airline & Aircraft Industry Update

Dahlman Rose's weekly airline and aircraft lessor report discussed updated 3Q10 guidance. Most of the airlines continue to see double digit revenue growth for 3Q2010 and strong forward bookings at least through mid-November. Airlines are continuing to focus on keeping costs flat up low single digits, while oil prices have trended lower. Dahlman expects all airlines in it's universe to be profitable in 3Q2010. Credit card sales in August totaled $5.7 Billion, which is up 21.6% from August 2009 and up 2.5% from August 2008 levels as well. Shareholders of United Airlines and Continental Airlines CAL approved the merger. All approvals are in except for the US Department of Transportation, which is expected to approve the merger in the next few weeks. Risks to the industry include troubled worldwide economies, especially if they have international operations. Airlines have no control over the cost of fuel and its is volatile as well as difficulty seeing into future fluctuations. Load factors are at all time record levels right now and airline company air fares are below record levels. Although fares have been going up during the current year, there is always the risk that the airlines will be unable to raise fares. Continental Airlines shares are trading up $0.31 at $23.35