Airlines Trade Driving the Dow Transports Due North
$DAL, $AAL, $UAL
The airlines’ outperformance has also given the Dow Jones Transportation Averages (+1.1%) a boost.
Thursday’s performance has given the DJTA a slight edge over the benchmark index for the year; the 2 averages show YTD gains of 3.3% and 3.1%, respectively.
Thursday, President Donald Trump told US airlines he would help them compete with foreign carriers that he said are subsidized by their governments, a crucial signal of White House support for a long-running industry campaign that began in Y 2015.
“You’ve got a lot of competition,” President Trump said at a White House meeting Thursday with the nation’s largest airlines, air freight companies and airports. “A lot of that competition is subsidized by governments, big league.”
Active involvement by President Trump would answer 2 years of prodding by Delta Air Lines Inc.(NYSE:DAL), United Continental Holdings Inc (NYSE:UAL). and American Airlines Group Inc. (NYSE: to act on claims that $50-B in government support have enabled three Persian Gulf carriers to compete unfairly.
The airlines asked last week to meet with Secretary of State Rex Tillerson to discuss their allegations against Emirates, Etihad Airways PJSC and Qatar Airways Ltd.
Representatives for the Persian Gulf carriers didn’t immediately respond to requests for comment. The airlines have disputed the claims of their US rivals.
President Trump made his comments as part of a wide-ranging discussion in which he also called for improvements to airports, roads and rails. He didn’t say what steps he might consider. He said he’d seek to help domestic carriers while also encouraging foreign airlines and the “big investments” they make in the US
President Trump also said much of the nation’s transportation infrastructure needed significant improvements.
“We have an obsolete plane system, we have obsolete trains, we have obsolete airports, we have bad roads,” he said. “And we’re going to change all that.”
He also called the air-traffic control system “outdated.” Southwest Airlines Co. CEO Gary Kelly called for the government to get out of the system, a position supported by most major airlines except Delta. The conversation with Trump was focused on infrastructure investment, regulation and taxes, Mr. Kelly said..
“You people are regulated probably as much as anybody,” President Trump said. “We’re going to be announcing something I would say over the two or three weeks that will be phenomenal in terms of tax and developing our aviation infrastructure.”
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