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Airline Stock Roundup: ACDVF's Pilot Unrest, JBLU's Bleak Q3 Guidance & More
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In the past week, Air Canada’s (ACDVF - Free Report) pilots demonstrated at Toronto's Pearson Airport, demanding higher pay, job security and better working conditions. Low-cost carrier JetBlue Airways (JBLU - Free Report) featured in the news following its bearish guidance for the third quarter of 2023.
Joby Aviation (JOBY - Free Report) took a step toward fulfilling its goal of commercial operations when it expanded the scope of its flight test program to include flying with a pilot onboard. European carrier, Ryanair Holdings’ (RYAAY - Free Report) September traffic declined sequentially mainly due to air traffic control strikes
Recap of the Past Week’s Most Important Stories
1. JetBlue’s management announced that adverse weather and air traffic control issues in the Northeast hurt operations during the third quarter. Additionally, leisure travel bookings during the September quarter were lower than expected. For third-quarter 2023, JetBlue now anticipates revenues to be near the low end of its prior guidance (earlier estimate was a decline of 4-8%).
Non-fuel unit cost for the September quarter is now expected to be near the high end of the prior view (the earlier estimate was a 2.5-5.5% increase). With oil prices moving north, JetBlue raised its fuel cost per gallon guidance for the third quarter and now anticipates fuel price per gallon to be around $2.95 (prior view: $2.75-$2.90 band). JBLU currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2. Air Canada's pilots have received a 2% wage increase per year since 2014. The contract ended on Sep 29. The union believes that the ongoing talks, which have been going on since June 2023, will continue throughout October, leaving them without a contract. With no breakthrough yet, pilots of ACDVF are naturally pressing for a new pay-related contract. The recent lucrative deals inked by its counterparts in the United States also acted as a catalyst behind their decision to protest.
Air Canada has also been in the news recently due to its fleet upgrade efforts. The news was covered in detail in the previous week’s write-up.
3. In September, the number of passengers ferried on RYAAY flights was 17.4 million, reflecting a 9% year-over-year increase. The load factor (percentage of seats filled by passengers) was high at 94% in September 2023. The reading was similar in the year-ago period. RYAAY operated more than 97,350 flights in September 2023.
4. Most of Joby Aviation’s testing has been completed remotely from a ground control station by using modern communications technology and software. This remote testing allowed JOBY to generate a large amount of data on the performance of the aircraft through a variety of flight conditions. The pilot-on-board campaign was led by its Chief Test Pilot, James Denham. The campaign was designed to collect information on the aircraft’s handling qualities and pilot control interfaces.
Price Performance
The following table shows the price movement of the major airline players over the past week and during the past six months.
Image Source: Zacks Investment Research
The table above shows that most airline stocks traded in the red in the past week. As a result, the NYSE ARCA Airline Index declined 3.2% over the period to $52.58. Over the course of the past six months, the sector tracker declined 6.9%.
What's Next in the Airline Space?
Delta Air Lines (DAL - Free Report) is scheduled to kickstart the third-quarter earnings season for airlines on Oct 12. While passenger revenues are likely to have been impressive, high fuel costs are expected to have dented DAL’s bottom-line performance in the to-be-reported quarter.
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Airline Stock Roundup: ACDVF's Pilot Unrest, JBLU's Bleak Q3 Guidance & More
In the past week, Air Canada’s (ACDVF - Free Report) pilots demonstrated at Toronto's Pearson Airport, demanding higher pay, job security and better working conditions. Low-cost carrier JetBlue Airways (JBLU - Free Report) featured in the news following its bearish guidance for the third quarter of 2023.
Joby Aviation (JOBY - Free Report) took a step toward fulfilling its goal of commercial operations when it expanded the scope of its flight test program to include flying with a pilot onboard. European carrier, Ryanair Holdings’ (RYAAY - Free Report) September traffic declined sequentially mainly due to air traffic control strikes
Recap of the Past Week’s Most Important Stories
1. JetBlue’s management announced that adverse weather and air traffic control issues in the Northeast hurt operations during the third quarter. Additionally, leisure travel bookings during the September quarter were lower than expected. For third-quarter 2023, JetBlue now anticipates revenues to be near the low end of its prior guidance (earlier estimate was a decline of 4-8%).
Non-fuel unit cost for the September quarter is now expected to be near the high end of the prior view (the earlier estimate was a 2.5-5.5% increase). With oil prices moving north, JetBlue raised its fuel cost per gallon guidance for the third quarter and now anticipates fuel price per gallon to be around $2.95 (prior view: $2.75-$2.90 band). JBLU currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2. Air Canada's pilots have received a 2% wage increase per year since 2014. The contract ended on Sep 29. The union believes that the ongoing talks, which have been going on since June 2023, will continue throughout October, leaving them without a contract. With no breakthrough yet, pilots of ACDVF are naturally pressing for a new pay-related contract. The recent lucrative deals inked by its counterparts in the United States also acted as a catalyst behind their decision to protest.
Air Canada has also been in the news recently due to its fleet upgrade efforts. The news was covered in detail in the previous week’s write-up.
3. In September, the number of passengers ferried on RYAAY flights was 17.4 million, reflecting a 9% year-over-year increase. The load factor (percentage of seats filled by passengers) was high at 94% in September 2023. The reading was similar in the year-ago period. RYAAY operated more than 97,350 flights in September 2023.
4. Most of Joby Aviation’s testing has been completed remotely from a ground control station by using modern communications technology and software. This remote testing allowed JOBY to generate a large amount of data on the performance of the aircraft through a variety of flight conditions. The pilot-on-board campaign was led by its Chief Test Pilot, James Denham. The campaign was designed to collect information on the aircraft’s handling qualities and pilot control interfaces.
Price Performance
The following table shows the price movement of the major airline players over the past week and during the past six months.
Image Source: Zacks Investment Research
The table above shows that most airline stocks traded in the red in the past week. As a result, the NYSE ARCA Airline Index declined 3.2% over the period to $52.58. Over the course of the past six months, the sector tracker declined 6.9%.
What's Next in the Airline Space?
Delta Air Lines (DAL - Free Report) is scheduled to kickstart the third-quarter earnings season for airlines on Oct 12. While passenger revenues are likely to have been impressive, high fuel costs are expected to have dented DAL’s bottom-line performance in the to-be-reported quarter.