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Shares Of Brazilian Carriers Plunge

Strike threat sends shares of Brazilian airlines into nosedive

Dec 22, 2010

Gol Linhas’ U.S. shares dropped 3% and Tam SA shares fell 2%.

Their stocks helped drag the Brazilian market lower. The Bovespa fell 292 points, or 0.4%, to 67,922. Other transportation companies also fell. LLX Logistica was down 2.1% in Sao Paulo.

The strike could happen Thursday, according to the Web site of Brazil’s National Union of the Airlines.

Unions that represent Brazil’s pilots, flight attendants and ground personnel are seeking a salary increase of at least 13%. Airline company representatives wish to offer a wage hike of more than 6%, according to the union site and reports from Dow Jones Newswires and Fox News.

Negotiations ended in stalemate last week. The unions originally sought a salary increase of 15%.

Gol bills itself as the largest low-fare airline in Latin America, with more than 900 daily flights in South America and the Caribbean. Tam flies to 45 destinations in Brazil and 17 others in the United States, Europe and South America.

Year-to-date, Gol shares are down 5% in New York. Tam shares are up 9%. By comparison, the NYSE Arca Airline Index is up 41%.

The retreat in Brazilian shares was in line with a regional pullback. Mexico’s IPC lost 0.4% to 38.091.92 and Chile’s IPSA slid 1% to 4,903.

Strike threat sends shares of Brazilian airlines into nosedive
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Source: MarketWatch

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