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In the past week, Delta Air Lines’ (DAL - Free Report) management gave a bullish outlook for the second quarter and full-year 2023 at its Investor Day presentation. Higher air-travel demand scenario was the primary catalyst behind management’s upbeat projections.
Southwest Airlines (LUV - Free Report) was also in the news following the pay-related tentative deal between the carrier and the Aircraft Mechanics Fraternal Association (“AMFA”). AMFA represents nearly 2,800 mechanics and related employees at Southwest Airlines. An expansion-related update was also available from Alaska Airlines, the wholly owned subsidiary of Alaska Air Group (ALK - Free Report) ,in the past week.
Recap of the Past Week’s Most Important Stories
1. DAL’s management anticipates full-year adjusted earnings to be $6 per share, in line with the top end of its previous expectation in the $5-$6 range. The company attributes this positive outlook to strong air travel demand. Delta expects adjusted earnings per share in the range of $2.25-$2.50 for second-quarter 2023. The earlier expectation was in the range of $2-$2.25. Delta also raised its revenue outlook for the second quarter, expecting growth between 17% and 18% (up from the previous range of 15-17%). Operating margin for the second quarter is expected to be 16%.
Delta also raised its estimate for 2023 free cash generation to $3 billion from $2 billion. Delta currently carries a Zacks Rank #2 (Buy).
2. LUV’s agreement with AMFA aims to reward employees and maintain the airline's operational efficiency. The primary goals of AMFA include safeguarding work, improving standards and increasing recognition for AMTs and related professionals. The provisional deal covers more than 2,800 mechanics and related employees at Southwest Airlines, including aircraft maintenance technicians, aircraft inspectors, maintenance controllers and training instructors. It is important to note that the tentative deal will only become effective if it is approved through the voting process.
3. To meet the anticipated demand swell during winter this year, Alaska Airlines’ management decided to add four new routes to its network. Under its expansion plan, the carrier added its first-ever non-stop flights to the Bahamas from Los Angeles and Seattle. The flights will operate from Dec 15, 2023, to Apr 9, 2024. ALK’s management also decided to increase its service to Mexico with new routes between Las Vegas and Cabo San Lucas and Puerto Vallarta. The Las Vegas-Cabo San Lucas flights will operate four times a week, from Dec 15, 2023 to Apr 10, 2024. The Las Vegas-Puerto Vallarta flights will operate four times a week from Dec 14, 2023 to Apr 9, 2024.
4. According to a Reuters report, Ryanair Holdings (RYAAY - Free Report) expects passenger numbers in central and eastern Europe (CEE) to register an increase of at least 50% over the next 10 years. This is part of RYAAY’s strategy to expand its presence in a less-developed market. Alicja Wojcik-Golebiowska, the CEE and Baltics country manager for Ryanair, stated, "We see that central and eastern Europe was a little bit left behind in last years. So we want to catch up in this region to catch it up with our most developed markets like Spain, Italy or Poland."
Performance
The following table shows the price movement of the major airline players in the past week and during the last six months.
Image Source: Zacks Investment Research
The table above shows that almost all airline stocks traded in the green over the past week, resulting in the NYSE ARCA Airline Index gaining 4.5% to $76.64. Over the course of the past six months, the NYSE ARCA Airline Index appreciated 34%.
What’s Next in the Airline Space?
Stay tuned for the usual news updates in the space.
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Airline Stock Roundup: DAL's Upbeat View, LUV's Labor Deal & More
In the past week, Delta Air Lines’ (DAL - Free Report) management gave a bullish outlook for the second quarter and full-year 2023 at its Investor Day presentation. Higher air-travel demand scenario was the primary catalyst behind management’s upbeat projections.
Southwest Airlines (LUV - Free Report) was also in the news following the pay-related tentative deal between the carrier and the Aircraft Mechanics Fraternal Association (“AMFA”). AMFA represents nearly 2,800 mechanics and related employees at Southwest Airlines. An expansion-related update was also available from Alaska Airlines, the wholly owned subsidiary of Alaska Air Group (ALK - Free Report) ,in the past week.
Recap of the Past Week’s Most Important Stories
1. DAL’s management anticipates full-year adjusted earnings to be $6 per share, in line with the top end of its previous expectation in the $5-$6 range. The company attributes this positive outlook to strong air travel demand. Delta expects adjusted earnings per share in the range of $2.25-$2.50 for second-quarter 2023. The earlier expectation was in the range of $2-$2.25. Delta also raised its revenue outlook for the second quarter, expecting growth between 17% and 18% (up from the previous range of 15-17%). Operating margin for the second quarter is expected to be 16%.
Delta also raised its estimate for 2023 free cash generation to $3 billion from $2 billion. Delta currently carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2. LUV’s agreement with AMFA aims to reward employees and maintain the airline's operational efficiency. The primary goals of AMFA include safeguarding work, improving standards and increasing recognition for AMTs and related professionals. The provisional deal covers more than 2,800 mechanics and related employees at Southwest Airlines, including aircraft maintenance technicians, aircraft inspectors, maintenance controllers and training instructors. It is important to note that the tentative deal will only become effective if it is approved through the voting process.
3. To meet the anticipated demand swell during winter this year, Alaska Airlines’ management decided to add four new routes to its network. Under its expansion plan, the carrier added its first-ever non-stop flights to the Bahamas from Los Angeles and Seattle. The flights will operate from Dec 15, 2023, to Apr 9, 2024. ALK’s management also decided to increase its service to Mexico with new routes between Las Vegas and Cabo San Lucas and Puerto Vallarta. The Las Vegas-Cabo San Lucas flights will operate four times a week, from Dec 15, 2023 to Apr 10, 2024. The Las Vegas-Puerto Vallarta flights will operate four times a week from Dec 14, 2023 to Apr 9, 2024.
4. According to a Reuters report, Ryanair Holdings (RYAAY - Free Report) expects passenger numbers in central and eastern Europe (CEE) to register an increase of at least 50% over the next 10 years. This is part of RYAAY’s strategy to expand its presence in a less-developed market. Alicja Wojcik-Golebiowska, the CEE and Baltics country manager for Ryanair, stated, "We see that central and eastern Europe was a little bit left behind in last years. So we want to catch up in this region to catch it up with our most developed markets like Spain, Italy or Poland."
Performance
The following table shows the price movement of the major airline players in the past week and during the last six months.
Image Source: Zacks Investment Research
The table above shows that almost all airline stocks traded in the green over the past week, resulting in the NYSE ARCA Airline Index gaining 4.5% to $76.64. Over the course of the past six months, the NYSE ARCA Airline Index appreciated 34%.
What’s Next in the Airline Space?
Stay tuned for the usual news updates in the space.