Deutsche Bank's Advice For Long-Term Airline Investors

Recent decline in airline shares presents an attractive buying opportunity for long-term investors, according to Deutsche Bank analyst Michael Linenberg.

American Airlines Reports June Results

Shares rose following American Airlines AAL June traffic results and Q2 PRASM. American Airlines reported that June total revenue passenger miles (RPMs) was up one percent year-over-year at $19.9 billion. Total capacity was up 3.2 percent but total passenger load factor fell 1.9 percent compared with June 2013.

The 8-K filing states, "The Company expects its second quarter 2014 consolidated passenger revenue per available seat mile (PRASM) to be up approximately 5.5 percent to 6.5 percent versus the same period last year. In addition, the Company expects its second quarter pre-tax margin (excluding special items) to be approximately 12 percent to 13 percent."

Deutsche Bank Advises Long-Term Investors To Buy

Deutsche Bank analyst Michael Linenberg reported that the recent share pullback presents an attractive buying opportunity for long-term investors.

The analyst remarked that the U.S. capacity outlook is “benign” with the "recent sell-off surprising given strong pricing environment and improving U.S. economy." The firm noted that U.S. airlines are not planning to expand its transatlantic capacity more than five percent year versus European airlines with planned double-digit growth.