The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK ( TheStreet) -- UBS Research Analyst Kevin Crissey and Associate Analyst Kevin Grasmick published a report on Jan. 3 analyzing the U.S. airline sector's performance during 2011 and concluding that it was disappointing. Although the airline sector witnessed a strong revenue growth over the last year, their final results have been dismal (excluding Alaska and Allegiant). Hence, on average, airline stocks lost 25%.
Revenue estimates for the airline sector were increased to 10% from 7%, while the estimates for growth in fuel costs were also 20% higher. Moreover, analysts believe that managements of these companies were not able to pass on the fuel price increase entirely to the consumer, generating a negative impact on the bottom-line. Given that the revenue outlook for the sector remains strong in the U.S., analysts are bullish on selected stocks like DAL and LCC.
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