How Will American Airlines’ Equity Value Move, If Crude Oil Prices Average $50 Per Barrel In 2018?
Jet fuel costs account for one-third of an airline’s total operating expenses. Due to the steep fall in crude oil prices over the last 20 months, the fuel expense of airlines throughout the globe has been reduced significantly, resulting in a notable jump in their earnings. In our base case, we anticipate crude oil prices to recover steadily to $70 per barrel by 2018. However, in case oil prices take longer than expected to recover, and average $50 per barrel in 2018, then we expect a more than 65% upside to our base case price estimate for American Airlines.
Have more questions about American Airlines (NYSE:AAL)? See the following links:
- How Will American Airlines’ Equity Value Move, If Crude Oil Prices Rebound To $100 Per Barrel By 2018?
- Why Are American Airlines’ Domestic Operations More Valuable Than Its International Operations?
- How Did American Airlines’ Revenue And EBITDA Grow Over The Last Five Years?
- How Did American Airlines Use Its Increased Cash Flows In 2015?
- How Will American Airlines’ Revenue And EBITDA Grow Over The Next Five Years?
- What Is American Airlines’ Fundamental Value Based On 2016 Estimated Numbers?
- How Has The Oil Slump Impacted American Airlines’ Operating Margins?
- How Has American Airlines’ Revenue And EBITDA Composition Changes Over The Last Five Years?
- What Is American Airlines’ Revenue And EBITDA Breakdown?
- US Airlines: A Comparison Of Operating Margins
- US Airlines: A Comparison Of Dividend Yields
- Is American Airlines Better-Off Post Merger Or Is It Merely Flying On The Oil Price Slump?
- Should You Pick American Airlines Stock At $14 After A 6% Fall In A Week?
- With 20% Gains This Month Is Alaska Air A Better Pick Than American Airlines Stock?
- Which Airlines Stock Will Offer Better Returns – American Or United?
- What To Expect From American Airlines’ Q2?
- Will American Airlines Stock Recover To Its Pre-Inflation-Shock Level?
- Pick Either American Airlines Stock Or Its Peer – Both May Offer Similar Returns
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for American Airlines
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