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The past week saw quite a few updates in the airline space. Low-cost carrier Southwest Airlines (LUV - Free Report) grabbed headlines with announcements of hike in its quarterly dividend and approval of a new buyback plan.
Southwest Airlines’ investor-friendly updates apart, the past week saw Airlines for America (‘A4A’) – the largest airline trade association in the U.S. – unveiling a bullish projection for the upcoming summer season (Jun 1–Aug 31). The association expects the season will be the busiest one for U.S. carriers in terms of air travel.
Additionally, shares of JetBlue Airways Corporation (JBLU - Free Report) were positively impacted by its bullish update on revenue per available seat mile (RASM: a key measure of unit revenues) for the second quarter of 2017. Copa Holdings (CPA - Free Report) unveiled impressive traffic data for April during the past week.
1. Close on the heels of Delta Air Lines’ (DAL - Free Report) quarterly dividend hike, low-cost carrier Southwest Airlines announced a 25% increase in dividend along with a new share repurchase program worth $2 billion. The new buyback scheme will replace a recently completed $2 billion repurchase plan. (Read more: Southwest Airlines Hikes Dividend, Unveils New Buyback Plan).
2. During its presentation at the 10th Annual Wolfe Research Global Transportation Conference, Long Island City, NY-based JetBlue Airways said that it expects RASM for the second quarter of 2017 to grow in the band of 4–6% (the previous guidance hinted at year-over-year growth in the band of 3–6% for the same period).
The bullish guidance pertaining to this closely watched unit revenue metric for the current quarter was driven by expectations of strong performances in the months of May and June. RASM is projected to be in the positive territory in those months. Moreover, the timing of Fourth of July is expected to aid this metric in the quarter. The carrier also said that the outlook on RASM for the third quarter has substantially improved since the first-quarter conference call in April.
JetBlue, which expects capacity to grow in the band of 4–6% in the second quarter, is focussed on strengthening its presence in key cities like Boston as well as expanding its premium service (Mint). Cost per available seat miles (CASM: excluding fuel) is anticipated to grow in the band of 4.5–6.5% in the quarter. The likes of American Airlines Group (AAL - Free Report) are also bullish on this key unit revenue metric.
3. According to a projection by A4A, companies in the airline space will make hay in the upcoming summer season. Per the forecast, approximately 234.1 million passengers will be transported by U.S. airlines this summer, up 4% from the 2016 levels. In fact, air travel projection for summer is of 2.54 million fliers per day during the said period (Read more: U.S. Carriers Likely to Have Busiest Summer, Says A4A).
4. Copa Holdings reported impressive traffic data for the month of Apr 2017. Traffic – measured in revenue passenger miles (RPMs) – came in at 1.55 billion, up 16.5% on a year-over-year basis. Also, consolidated capacity (or available seat miles/ASMs) rose 6.3% year over year to 1.86 billion (Read more: Copa Holdings Traffic, Load Factor Rise in April).
5. In a bid to cope with the anticipated rush during the upcoming summer season, Alaska Airlines, the wholly owned subsidiary of Alaska Air Group (ALK - Free Report) started offering non-stop flights connecting Philadelphia and Portland, OR. The flights are operating on a daily basis from May 22, up to Aug 26 (Read more: Alaska Airlines' Seasonal Flights to Meet Summer Demand).
Performance
The following table shows the price movement of the major airline players over the past week and during the last 6 months.
Company
Past Week
Last 6 months
HA
-2.15%
-12.11%
UAL
0.55%
8.44%
GOL
-31.45%
27.77%
DAL
-1.84%
-1.22%
JBLU
3.23%
5.24%
AAL
0.42%
0.69%
SAVE
-3.01%
-2.17%
LUV
4.28%
25.9%
CPA
-10.66%
19.38%
ALK
1.36%
3.4%
The table above shows that the airline stocks exhibited a mixed trend with respect to price over the past week. The NYSE ARCA Airline Index declined 1.37% to $112.92 over the past week. Shares of GOL Linhas declined the most (31.45%) primarily due to the political scandal in Brazil. Over the course of six months, the NYSE ARCA Airline Index appreciated 6.44%. Shares of GOL Linhas gained the most (27.77%) during the period.
What's Next in the Airline Space?
With the earnings season over, stay tuned for usual news updates in the space.
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Airline Stock Roundup: Southwest Airlines Hikes Dividend, Busiest Summer Likely
The past week saw quite a few updates in the airline space. Low-cost carrier Southwest Airlines (LUV - Free Report) grabbed headlines with announcements of hike in its quarterly dividend and approval of a new buyback plan.
Southwest Airlines’ investor-friendly updates apart, the past week saw Airlines for America (‘A4A’) – the largest airline trade association in the U.S. – unveiling a bullish projection for the upcoming summer season (Jun 1–Aug 31). The association expects the season will be the busiest one for U.S. carriers in terms of air travel.
Additionally, shares of JetBlue Airways Corporation (JBLU - Free Report) were positively impacted by its bullish update on revenue per available seat mile (RASM: a key measure of unit revenues) for the second quarter of 2017. Copa Holdings (CPA - Free Report) unveiled impressive traffic data for April during the past week.
Transportation - Airline Industry 5YR % Return
Transportation - Airline Industry 5YR % Return
(Read the last Airline Stock Roundup for May 17, 2017).
Recap of the Past Week’s Most Important Stories
1. Close on the heels of Delta Air Lines’ (DAL - Free Report) quarterly dividend hike, low-cost carrier Southwest Airlines announced a 25% increase in dividend along with a new share repurchase program worth $2 billion. The new buyback scheme will replace a recently completed $2 billion repurchase plan. (Read more: Southwest Airlines Hikes Dividend, Unveils New Buyback Plan).
2. During its presentation at the 10th Annual Wolfe Research Global Transportation Conference, Long Island City, NY-based JetBlue Airways said that it expects RASM for the second quarter of 2017 to grow in the band of 4–6% (the previous guidance hinted at year-over-year growth in the band of 3–6% for the same period).
The bullish guidance pertaining to this closely watched unit revenue metric for the current quarter was driven by expectations of strong performances in the months of May and June. RASM is projected to be in the positive territory in those months. Moreover, the timing of Fourth of July is expected to aid this metric in the quarter. The carrier also said that the outlook on RASM for the third quarter has substantially improved since the first-quarter conference call in April.
JetBlue, which expects capacity to grow in the band of 4–6% in the second quarter, is focussed on strengthening its presence in key cities like Boston as well as expanding its premium service (Mint). Cost per available seat miles (CASM: excluding fuel) is anticipated to grow in the band of 4.5–6.5% in the quarter. The likes of American Airlines Group (AAL - Free Report) are also bullish on this key unit revenue metric.
3. According to a projection by A4A, companies in the airline space will make hay in the upcoming summer season. Per the forecast, approximately 234.1 million passengers will be transported by U.S. airlines this summer, up 4% from the 2016 levels. In fact, air travel projection for summer is of 2.54 million fliers per day during the said period (Read more: U.S. Carriers Likely to Have Busiest Summer, Says A4A).
4. Copa Holdings reported impressive traffic data for the month of Apr 2017. Traffic – measured in revenue passenger miles (RPMs) – came in at 1.55 billion, up 16.5% on a year-over-year basis. Also, consolidated capacity (or available seat miles/ASMs) rose 6.3% year over year to 1.86 billion (Read more: Copa Holdings Traffic, Load Factor Rise in April).
Copa Holdings carries a Zacks Rank # 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5. In a bid to cope with the anticipated rush during the upcoming summer season, Alaska Airlines, the wholly owned subsidiary of Alaska Air Group (ALK - Free Report) started offering non-stop flights connecting Philadelphia and Portland, OR. The flights are operating on a daily basis from May 22, up to Aug 26 (Read more: Alaska Airlines' Seasonal Flights to Meet Summer Demand).
Performance
The following table shows the price movement of the major airline players over the past week and during the last 6 months.
Company
Past Week
Last 6 months
HA
-2.15%
-12.11%
UAL
0.55%
8.44%
GOL
-31.45%
27.77%
DAL
-1.84%
-1.22%
JBLU
3.23%
5.24%
AAL
0.42%
0.69%
SAVE
-3.01%
-2.17%
LUV
4.28%
25.9%
CPA
-10.66%
19.38%
ALK
1.36%
3.4%
The table above shows that the airline stocks exhibited a mixed trend with respect to price over the past week. The NYSE ARCA Airline Index declined 1.37% to $112.92 over the past week. Shares of GOL Linhas declined the most (31.45%) primarily due to the political scandal in Brazil. Over the course of six months, the NYSE ARCA Airline Index appreciated 6.44%. Shares of GOL Linhas gained the most (27.77%) during the period.
What's Next in the Airline Space?
With the earnings season over, stay tuned for usual news updates in the space.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>