GO
Loading...

Three Airline Stocks to Watch

Airline stocks may be taking off -- despite such seeming drags as soaring fuel prices and bankruptcies. Andrew Wilkinson, senior market analyst at Interactive Brokers, told "Power Lunch" viewers why he sees a renaissance in passenger carrier shares.

Oil hit a 10-month high on Monday, but Wilkinson said that no longer spells financial doom for carriers: "The airlines have learned to hedge their fuel costs -- and are operating more efficiently than they have ever done," he said.

The analyst told CNBC's Sue Herera that carriers have used Chapter 11 bankruptcy protection as a tool, enabling them to revamp and reach that operating efficiency.

Symbol
Price
 
Change
%Change
DAL
---
JBLU
---

Three carriers to watch:

Northwest Airlines. Wilkinson pointed to "extreme bullishness on the call-option side" during the second half of June. And the volume of call-buying for the once-bankrupt company was "absolutely huge," he said.

Delta Air Lines. The analyst said that the Atlanta-based carrier -- which had declared bankruptcy on the same day (Sept. 14, 2005) as Northwest -- also saw big activity in June's latter half. Wilkinson noted that 115,000 December-contract call options were bought.

JetBlue Airways. Perhaps due to high-profile weather-related problems, "there were a lot of long-standing bear positions on JetBlue puts." But Wilkinson said that "last week, when the [airline] sector was upgraded," a major investor "abandoned" its bear call.

Symbol
Price
 
Change
%Change
JBLU
---

Featured

Contact

  • Showtimes

    United States
    Monday - Friday 1:00P ET
    Europe
    Monday - Friday 18:00 CET
    Asia Pacific
    Tuesday - Saturday 01:00 SIN/HK
    Australia
    Tuesday - Saturday 03:00 AEST
  • Sue Herera is a founding member of CNBC, helping to launch the network in 1989. She is co-anchor of "Power Lunch."

  • "Power Lunch" & “Nightly Business Report” Co-Anchor

Power Pitch

Kenny Polcari