Airlines decline after latest fare-hike flop: More empty seats in March, higher fuel costs

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By Christopher Hinton , MarketWatch


NEW YORK (MarketWatch) — Airline stocks continued a more than week-long descent Friday, as carriers struggled to raise ticket prices amid slowing demand and rising fuel costs.

Traffic reports showed planes flew last month with more empty seats compared with March 2010, particularly among carriers flying routes to Asia — where demand has slumped after the devastating March 11 earthquake and tsunami in Japan.

“Expectations certainly increased after the airlines outperformed previous expectations as travel demand climbed,” said Matt Jacob, an analyst with ITG Investment Research. “But comps are getting tougher as we move into 2011, ticket-price growth is slowing and there are concerns about where airlines go form here.”

The NYSE Arca Airline Index fell nearly 3% to close at 40.69 points with all 13 components in the red. Since March 29, the sector benchmark is off more than 5% versus a 1% gain in the S&P 500 Index. ...........(more)

The complete piece is at: http://www.marketwatch.com/story/surging-fuel-costs-hit-airline-stocks-2011-04-08