Friday, September 26, 2014

American Airlines Group: Fuel and Taxes


Summary

  • American Airlines to benefit from reduced fuel costs and consumption.
  • American Airlines won't face income tax payments until 2016, at the current income level.
  • The stock is extremely cheap with the above tailwinds helping offset any global slowdown concerns.
Typically people focus on two certainties in life: death and taxes. For an airline like American Airlines Group (NASDAQ:AAL), the certainties are fuel and taxes. Fuel accounts for the largest expense line for airlines. The ability to lower fuel consumption or the cost per gallon will have a material impact to the bottom line. For taxes, the airlines are entering a new era of dealing with income taxes after decades of loses that eliminated the need to pay the government.

Read the full article at Seeking Alpha.


Disclosure: Long AAL. Please review the disclaimer page for more details. 




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