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The performance of airline stocks over the past 5 trading sessions was a mixed bag, inclined slightly to the positive side. While soft economic data did not play much in favor, we believe a slight recovery in the S&P 500 over the last 5 days remains a supportive factor for the positive trending. 

One of the major highlights of the past week was the transition in the passport clearance process with the introduction of Automated Passport Control kiosks at select airports. This major change marks a big step forward for U.S. airline companies in terms of enhanced passenger service and depicts their efforts to incorporate advanced technologies to accelerate growth.  

In addition, Delta Air Lines Inc. (DAL - Analyst Report), Alaska Airlines Group Inc. (ALK - Snapshot Report) and JetBlue Airways (JBLU - Analyst Report) made headlines with the introduction of new flights.

Recap of Last Week’s Most Important Stories

  1. U.S. bound international passengers are set to enjoy an improved passport clearance process, as some of the major airports are now being updated with Automated Passport Control kiosks. (Read More: Customs Clearance Now Faster with Automated Passport Control)
  2. Alaska Airlines Group has added a daily round-trip service to Tampa, FL from Seattle. The non-stop year-round service aims to save on passengers’ travelling time. Notably, Seattle-Tampa is the third busiest U.S. route carrying nearly 320 passengers daily. Prior to Alaska Airlines’ latest offering, the much popular route lacked a much needed non-stop service.(Read More: Alaska Airlines Continues Seattle Expansion with Tampa Service)
  3. Delta Air Lines recently announced non-stop services connecting Barbados with both Atlanta and New York. Scheduled for Thursdays and Saturdays, the flights will start simultaneously from New York and Atlanta, connecting Barbados. (Read More: Delta Airlines to Reinstate Barbados Operations)
  4. In the same vein, JetBlue Airways flagged off new flights to Barnstable Municipal Airport in Hyannis, the commercial and transportation hub of Cape Cod, MA. The carrier will offer seasonal service with one daily flight between Jun 26 and Sep 9, 2014, representing the only airline connecting New York City with Cape Cod.
  5. United Airlines, subsidiary of United Continental Holdings, Inc. (UAL - Analyst Report), announced last week that a new joint labor agreement has been ratified by the Professional Airline Flight Control Association (PAFCA) and the Transport Workers Union (TWU). These unions represent over 300 United Airlines dispatchers. Most of the employees at United Airlines are unionized, depending strongly on various U.S. labor organizations. The relation between airlines and labor unions remain imperative as any failure to amend terms and conditions suitably may lead to work stoppages or strikes, and thereby hamper operations.

Performance

The following table shows the price movement of the major airline players over the past 5 trading days and during the last 6 months:

Company

Last 5 Days

Last 6 Months

AAL

-0.11%

72.95%

ALK

2.39%

34.11%

CPA

0.48%

-7.75%

DAL

-2.16%

40.91%

GOL

0.89%

28.51%

HA

-0.93%

44.49%

JBLU

3.00%

27.67%

LUV

2.82%

47.50%

SAVE

3.10%

41.91%

UAL

1.08%

12.01%

 

Over the trailing 5 sessions, the airline stocks listed above jointly exhibited a mixed price trend, with most of them leaning toward a price increase. 

Among the gainers, Spirit Airlines, Inc. (SAVE - Snapshot Report), JetBlue Airways and Southwest Airlines Co. (LUV - Analyst Report) topped the list with 3.1%, 3.0% and 2.8% increase in stock price, respectively. Biggest losers over the period were Delta Air Lines and Hawaiian Holdings Inc. (HA - Snapshot Report) with 2.2% and 1.0% decline in stock prices, respectively.

Over the past 6 months, most of the stocks have fared reasonably well with the exception of Copa Holdings, which has dropped 7.8%. The biggest gainers in the 6-month span were American Airlines and Southwest Airlines, sporting growth of 73% and 47.5%, respectively.

What’s Cooking in the Airline Biz?

The current week witnessed a major move in the form of Southwest Airlines flying into international territory, flagging off flights to the Caribbean. Southwest Airlines inaugurated services from Atlanta, Baltimore and Orlando to Oranjestad, Aruba and Montego Bay, Jamaica. Another flight will fly from the Baltimore-Washington D.C. area to Nassau and Paradise Island, thus extending the carrier’s international service to the Bahamas.

Further, American Airlines is reportedly set to finalize its deal worth $2.6 billion with CFM International for purchasing 200 engines to equip 100 A320 neo jetliners.

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