KEY POINTS:
Airline stocks rebounded around the world yesterday after the price of oil fell to a six-week low.
Air New Zealand rose 6.9 per cent to $1.23 - its highest close in two months - and across the Tasman Qantas gained to close at A$3.60 ($4.61), up 6.19 per cent.
In the United States, the Bloomberg Airlines Index jumped 16 per cent yesterday in the largest gain since the index of 14 carriers was created in 1999, as airline results beat analysts' estimates and the oil price fell.
Oil prices slipped further after tumbling more than US$3 a barrel in the previous session as a hurricane looked likely to spare key oil installations in the Gulf of Mexico.
The release of US oil supply data overnight was expected to show a rise in gasoline stocks amid weakening demand in the world's largest energy consumer taking further pressure off prices. The sell-off yesterday dragged oil prices to US$126.69 - their lowest level since early June and was crude's fifth decline in the last six sessions.
Prices fell as Dolly - a tropical storm that spun into a hurricane - headed towards the US-Mexico border but grew increasingly unlikely to threaten key oil supply in the Gulf.
That gave traders one less reason to buy as a strengthening dollar helped to keep prices in check.
The drop offered further evidence that investors are now quickly pulling money out of the market, after driving prices to a record above US$147 only a week and a half ago.
It was also a reminder that the absence of major news can push the market down - just as incremental supply concerns previously drove prices sharply higher.
Despite the positive oil news, US airline United, the world's second-largest carrier, boosted planned job reductions to 7000. US Airways said it would cut 18 per cent more jobs than previously planned, and JetBlue said that its unspecified cutbacks would be "commensurate" with its plansfor reduced flight capacity.
The results raise combined second-quarter losses at six of the eight largest US carriers to US$5.8 billion. The industry this year has announced the elimination of 26,000 jobs. Through the first half, only one of the biggest companies, Southwest Airlines has managed a quarterly profit.
Yesterday Air New Zealand released its operating figures for June which showed passenger load across the airline had dropped by 0.7 per cent compared with the same period last year.
This was primarily driven by a drop in passenger load factors across the short-haul network where passenger numbers were unable to keep pace with increased capacity.
In the important long-haul sector, passenger load factors for the month increased slightly, driven by a 10.5 per cent lift on Japanese routes compared with June last year.
Across the airline, yields were up 0.2 per cent. Air New Zealand increased fares across many routes from July 17 in response to continued high jet fuel prices.
Fares sold in New Zealand for Tasman and domestic flights increased by an average 3 per cent while long-haul fares increased by an average of 5 per cent.
- AGENCIES, STAFF REPORTER
