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The airline industry is used as an example for the derivation of the minimum variance cross hedge under the mean-reverting spreads, stochastic convenience yields and jumps. A time-varying hedge ratio that can be applied to a hedging horizon is also determined.

'It was months of panic, basically. The stress was very difficult,' says Gail Girard, director of meetings at the New Jersey State Bar Association in New Brunswick. She's describing what [...]

Some firms, such as in the airline industry, are looking at ways to discard customers which yield low profits. To ensure shareholders receive the highest returns customers who are expensive yet are unprofitable are not retained. Analysts suggest some 20% of customers provide 80% of profits.

Growth is expected to be reported by most air carriers for the 4th qtr of 1998 and early 1999, even though not at the 5% rate of 1997. Increased capacity growth, pricing uncertainties, and strategic alliances between domestic and international air carries are other industry trends which investors must also consider. These cyclical stocks have an average timeliness rating through the years 2001-2003.

Airline traffic growth is expected to remain solid for 1998 and 1999 along with the US economy, although it will be less than the 5% of 1997, and airline capacity is forecast to grow more slowly than traffic. Airlines are also creating international joint ventures in order to take advantage of the expected increase in international travel. These shares are timely and have outperformed the market in 1997 and 1998, but continue to be cyclical.

Airlines are expected to continue with good profits in 1998 after having a good year in 1997, with rising traffic, firm prices, and the slow rise of airline capacity. International joint ventures have increased for the air transport industry, as international travel outside the US is expectd to grow at a rapid pace, and US airline consolidation is moving ahead, also. Several of these stocks look strong for investors in 1998 and later.

Airline traffic in the US has been strong through July 1997 and is forecast to remain solid through the rest of the year, though slower. Airline load factors have risen to 69.2% for 1997, pricing has risen, and tax changes have been beneficial for carriers, as well. Foreign joint ventures have also become more important to airlines with the expected international market growth. These stocks are cyclical, but are timely for investors in 1997.

The air transport industry is expected to post improved profits in 1996 and 1997, boding well for at least some of the companies' stocks. The industry made a profit in 1995 for the first time since 1989. Potential investors, however, should be aware of labor conflicts at some of the carriers and of the general cyclical nature of the industry. Air traffic is outpacing capacity, increasing loads and efficiencies. Meanwhile, the impact of reduced airlines commissions to travel agents is not yet known.

A resumption of fare discounting in Aug 1994 will hurt airline bottom lines in the latter half of the year, but the industry will post its first profit since 1989. It will become even more profitable if it can control capacity growth and increase fares and if the economy improves. Sales and earnings growth information for specific carriers is provided.

The air transport industry is expected to see increased traffic and profits in 1994 after having performed poorly since 1990. The industry's stocks rank above average in timeliness but are below average in safety. The only consistently profitable major US airline has been Southwest Airlines, but attempts by USAir and Continental to imitate Southwest's inexpensive, low-haul niche could bring their profits up significantly.

The air transportation industry was plagued by low traffic during the first two thirds of 1993, but its stocks fared better than the majority of industries in the year as a whole. Securities analysts expect traffic to increase in 1994, prices to stay fixed or increase and profits to rise up through 1986 and 1987. Southwest Airlines, however, is the only one of the 12 airlines covered that has had steady profits.

The deregulation of the airline industry has resulted in the bankruptcy of six major carriers. False assumptions concerning the effects of deregulation on the airline industry are viewed as being responsible for the failure of the six airlines. Deregulators wrongly believed that airline size was an unessential element to carrier operations, that the barriers to entry in the industry were low, that greater competition would result in low air fare rates, and that travel agencies would exert very little influence on the marketing and distribution functions of airlines. A carefully conceived and practical policy for competition coupled with a six-step procedure can be used to enhance the competitive potential of the airline industry and maximize the benefits of deregulation.

It was a superlative year for the travel world-as in really, really bad. First came a stunner, the Day That Travel Stood Still-the outset of the Persian Gulf war. Then, [...]

The economic prospects for Qantas Airlines, following the collapse of Ansett Airlines, are discussed. Qantas' plans to buy more aircraft and increase its share of the domestic market to 75%, which could lead to net profits of 665m Australian dollars, are examined.

The $100-billion-a-year air passenger and cargo industry of the US reports record first quarter earnings in 1997 following several years of losses. Transportation analysts expect the industry to sustain these high results for the remainder of 1997. Industry officials attribute the industry's past financial decline to unstable fuel prices and federal excise taxes. United Air Lines announced sales of $195 million, or 11.4% growth in the company's cargo revenue for the first quarter of 1997, compared to the first quarter of 1996.