American Airlines Group (NASDAQ:AAL)

CAPS Rating: 2 out of 5

Recs

4
Player Avatar DJDynamicNC (26.51) Submitted: 4/9/2010 9:27:26 AM : Underperform Start Price: $7.53 AAL Score: -317.79

US Airways is staring down the barrel of a future loaded with challenges. Rising oil prices, the reinvigoration of the bullet train movement, ever-growing environmental concerns, and the threat of terrorism all pose significant risks to US Airways business model, even singly. Together, they represent an almost overwhelming threat.

Further, US Airways has shown a hearty willingness to simply pass the costs on to their consumer rather than innovate their way to better business practice. While I do not rule out the possibility of a change in corporate strategy and style, I have seen little to give me confidence in US Airways growth rate. Increased European access may give US Airways a boost for the next few years, but the long term picture isn't good, certainly not as good as the S&P 500 as a whole.

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