Monday, April 23, 2007

More Signs of International Strength Helping the US

From IBD

This is an article talking about the airline industry. Although there is concern about weakening domestic demand, international demand is helping to soften the blow to earnings.

Analysts say weaker domestic demand would hurt Southwest more than other airlines since it has the most U.S. flights. Also, Southwest's large fuel hedges are wearing off.

Meantime, it's boom time on the international front, where demand, load factors and pricing remain strong. Most low-cost carriers don't fly these lucrative routes, but the legacy carriers are adding new flights, buoyed in part by an "open skies" deal that will free up European airports such as London's Heathrow to more U.S. carriers.

Even if domestic yields slow, many of those flights feed into higher-yielding international connections. "Those new international routes make domestic routes stronger," said Michael Boyd of the Boyd Group.