Those of us that own either AA or CO shares had a very good day.....AA shares were up about 6% and CO shares were up more than 7%. Lower fuel prices, stronger revenues and under-control costs are leading investors to believe that both CO and AA will continue to make money in the coming months and that the future of these airlines is more secure than it has been in recent years. Also, bond ratings for debt issued by CO and AA were upgraded, while the debt issued by both airlines is certainly not investment grade, any improvment in the debt rating (from CCC to B- for secured CO debt) is welcomed, and will help the airlines in the financial markets. It is nice to report some good news for the airlines!
Delta filed a motion to extend the deadline for filing its restructuring plan....instead of a November 8 deadline, tha airline wants to file on Feb 15, 2007, about a three month delay. The deadline to solicit approval would also be extended....until mid April 2008, again about 3 extra months. This would be Delta's third extension. Not a big deal as Delta still hopes to be done with its bankruptcy proceeding by the middle of 2008, about 9 months from now. While Delta has accomplished a remarkable turnaround in the past few months as far as airline performance and operations, we can only assume that some of the legal and financial issues are taking a little longer than expected to resolve.
US Airways shares also moved higher. In all, not a bad day for the legacy carriers.