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Dahlman Rose & Co. analyst Helane Becker weighs in on impact of jet fuel prices on the airline industry.
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Welcome back jet fuel prices have dropped over 7% in the last three months.
My next guest says he's falling fuel prices are giving airline stocks the support they need to take -- Joining me now it's going back for airline analyst at -- rose thanks much for joining us thanks for having me.
-- -- prices are down but the yeah it's really getting to take advantage of this or they'll lock in a lot of their fuel costs ahead of time.
Actually they are getting.
Did have a big benefit in the second quarter at least figure there's about a two to three week lag between when prices -- to come down.
And when it really starts true positively affect the earnings so that it ended locked in sun but certainly not all.
At the same time you know they're able to raise their prayers over time as the price of fuel is going up they -- so quick to bring it down so they do make money -- that way I know that the airlines raise their -- with something like.
Twelve times last year they've already done it twice this year do you see that sticking.
We we see -- to fare increases this year is holding -- they've tried five times -- very it's just the other three didn't exactly work.
And now with fuel prices coming down their so much less pressure.
On them to raise ticket prices which is good going into the summer months because you can still find deals.
They're hard to find that can you -- debt they are.
-- -- -- there's a lot of capacity has been squeezed out of the system but I know on the airline industry people always say you know you're only as Smart as the dumbest guy out there because he'll just lower his price.
To -- market share and then you have to compete with that it is not true.
It's been true for prefer big part of the last couple of decades but as we've had consolidation in the industry and as the airlines have gone.
To really day of week scheduling yeah we've seen a real improvement in the pricing structure and the prices have held so that's good because you really want.
On a successful airline industry to have -- a really a successful economy it in the interview like delta how come.
Really get -- our top pick in the group for a variety of reasons first we think that they've got an improving balance sheet second.
They're very aggressive in in maintaining among the lowest fuel costs in the refinery purchases are gonna -- day jump the gun on that refinery purchase of fuel prices are -- anything it's still a great investment I know right they absolutely top -- did they thought they bought refinery may -- the exact top.
That we don't think a bit as dumped owning a refinery as much as we think of it is -- to buying Jeff killed different light.
So we think that'll still be an okay investment for them and so small 250 million.
-- 150 million dollars plus -- 109 integrating -- and I don't -- yeah but nothing and say yeah do you think it'll work out you also like -- are real quick before you go what is that yet so Panamanian based airline that's got just to really terrific kind and connects South America with North America Central America and the Caribbean.
And they've got a number of monopoly routes they make a lot of money -- yeah that's the way to -- -- great going thanks so much for joining us great information we appreciate it.
