(Recasts; adds analyst comments)
Sept 25 Stifel Nicolaus started four U.S.
airlines with a "buy" rating, and said high fuel prices served
as an impetus for the airline industry to restructure itself.
The rapid increase in oil prices led carriers to retire old
fuel-inefficient aircraft and cut less profitable routes,
analyst Hunter Keay said.
U.S. airlines had entered a new period defined by air
travel becoming a mid-priced luxury good, the analyst said.
"With oil pulling back from previous highs, airlines now
have increased breathing room from a liquidity perspective,"
Keay wrote in a note to clients.
But new capacity in the industry was unlikely, as there was
limited capital in the market to fund start-up ventures, Keay
Keay started AMR Corp AMR.N, Continental Airlines Inc
(CAL.N), Delta Air Lines Inc (DAL.N) and UAL Corp UAUA.O with
a "buy" rating and Southwest Airlines Co (LUV.N) with a "hold"
The following are Stifel's ratings and price targets on
U.S. airline stocks:
Company Name Rating Price
AMR Corp AMR.N Buy 18.00
Continental Airlines Inc (CAL.N) Buy 27.00
Delta Air Lines Inc (DAL.N) Buy 16.00
UAL Corp UAUA.O Buy 19.00
Southwest Airlines Co (LUV.N) Hold --
(Reporting by Arup Roychoudhury in Bangalore; Editing by