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Airline Stock Roundup: Spirit Airlines Tweaks View, Southwest Airlines May Load Factor Down
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The past week saw May traffic data releases from key airline players like Southwest Airlines (LUV - Free Report) , Spirit Airlines (SAVE - Free Report) , United Continental Holdings (UAL - Free Report) and American Airlines Group (AAL - Free Report) . While American Airlines’ figures were impressive, Southwest Airlines and United Continental disappointed particularly with respect to load factor (% of seats filled by passengers).
Spirit Airlines lifted its current quarter guidance for unit costs and trimmed the same for unit revenues in the wake of dispute with pilots. On the price front, the NYSE ARCA Airline index inched up to $116.66 over the last five trading days.
1. American Airlines witnessed a 2.6% rise in May traffic, measured in revenue passenger miles (RPMs), to 19.9 billion. Load factor increased to 82.1% from 81.9% in May 2016 as traffic growth outpaced capacity expansion of 2.3%. The company still expects total revenue per available seat mile (TRASM) in the second quarter of 2017 to rise 3.5%–5.5% year over year (read more: American Airlines' Traffic & Load Factor Increase in May).
2. Southwest Airlines’ share price was hurt by the decline in May load factor. The metric deteriorated 40 basis points (bps) to 85.4% during the month as capacity expansion (4%) outpaced traffic growth (3.4%), leading to relatively empty planes (read more: Southwest Airlines' Load Factor in May Falls, Stock Slumps).
3. While reporting its May traffic data, low-cost carrier Spirit Airlines raised its second-quarter guidance for cost per available seat miles, excluding fuel (CASM). The metric is now expected to increase 9% to 10% year over year (old guidance had called for an increase of 3.5% to 4.5%). Furthermore, the guidance for total revenue per available seat miles (TRASM) has been trimmed as flight disruptions dented the top line, thanks to refunds to passengers. The metric is now expected to grow in the band of 4% to 5% in the second quarter of 2017 (old guidance had hinted at growth of 4.5% to 5.5%). Capacity for the current quarter is projected to grow 14.5% (old guidance hinted at 16.7% year-over-year growth). Also, fuel cost per gallon (economic) is now pegged at $1.66, compared with $1.76 expected earlier (read more: Spirit Airlines' May Load Factor Falls, Q2 CASM View Raised).
4. While revealing its May traffic data, Chicago-based United Continental reiterated its second-quarter guidance for passenger unit revenues. The metric is still expected to grow in the band of 1% to 3% on a year-over-year basis. The carrier, like most of its peers, suffered a decline in load factor in the month as capacity expansion outpaced traffic growth (read more: United Continental's Traffic in May Rises, Load Factor Falls).
5. JetBlue Airways Corporation (JBLU - Free Report) reported a 3.8% increase in May traffic. Load factor increased in the month as traffic growth outpaced capacity expansion (3.7%). The low-cost carrier still expects revenue per available seat mile (RASM) for the second quarter of 2017 to increase between 4% and 6% (read more: JetBlue Airways May Traffic & Load Factor Rise, Capacity Up).
6. May traffic at GOL Linhas dropped 2.4%, while capacity contracted 4.6%. Load factor rose to 76.6% from 74.9% in May 2016. This was owing to capacity contraction that was wider than traffic decline (read more: GOL Linhas Traffic & Capacity Fall in May, Load Factor Rises).
Performance
The following table shows the price movement of the major airline players over the past week and the last six months.
Company
Past Week
Last 6 months
HA
-0.91%
-2.5%
UAL
-4.2%
6.8%
GOL
-3.4%
76.92%
DAL
1.6%
5.3%
JBLU
2.3%
2.31%
AAL
0.4%
3.82%
SAVE
-2.5%
-5.9%
LUV
-1.42%
20%
CPA
2.9%
21.52%
ALK
0.6%
3.04%
The table shows that airline stocks have exhibited a mixed trend with respect to price over the past week. Shares of United Continental depreciated the most (4.2%), while Copa Holdings (CPA - Free Report) emerged as the biggest gainer (2.9%). Over the course of the last six months, the NYSE ARCA Airline Index appreciated 4.4% on the back of GOL Linhas’ huge gain (76.92%).
What's Next in the Airline Space?
With President Trump expected to announce changes to the existing Cuba policy on Jun 16, investors interested in the space will keenly await updates on the same.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
Image: Bigstock
Airline Stock Roundup: Spirit Airlines Tweaks View, Southwest Airlines May Load Factor Down
The past week saw May traffic data releases from key airline players like Southwest Airlines (LUV - Free Report) , Spirit Airlines (SAVE - Free Report) , United Continental Holdings (UAL - Free Report) and American Airlines Group (AAL - Free Report) . While American Airlines’ figures were impressive, Southwest Airlines and United Continental disappointed particularly with respect to load factor (% of seats filled by passengers).
Spirit Airlines lifted its current quarter guidance for unit costs and trimmed the same for unit revenues in the wake of dispute with pilots. On the price front, the NYSE ARCA Airline index inched up to $116.66 over the last five trading days.
Transportation - Airline Industry 5YR % Return
Transportation - Airline Industry 5YR % Return
(Read the last Airline Stock Roundup for Jun 07, 2017).
Recap of the Past Week’s Most Important Stories
1. American Airlines witnessed a 2.6% rise in May traffic, measured in revenue passenger miles (RPMs), to 19.9 billion. Load factor increased to 82.1% from 81.9% in May 2016 as traffic growth outpaced capacity expansion of 2.3%. The company still expects total revenue per available seat mile (TRASM) in the second quarter of 2017 to rise 3.5%–5.5% year over year (read more: American Airlines' Traffic & Load Factor Increase in May).
2. Southwest Airlines’ share price was hurt by the decline in May load factor. The metric deteriorated 40 basis points (bps) to 85.4% during the month as capacity expansion (4%) outpaced traffic growth (3.4%), leading to relatively empty planes (read more: Southwest Airlines' Load Factor in May Falls, Stock Slumps).
3. While reporting its May traffic data, low-cost carrier Spirit Airlines raised its second-quarter guidance for cost per available seat miles, excluding fuel (CASM). The metric is now expected to increase 9% to 10% year over year (old guidance had called for an increase of 3.5% to 4.5%). Furthermore, the guidance for total revenue per available seat miles (TRASM) has been trimmed as flight disruptions dented the top line, thanks to refunds to passengers. The metric is now expected to grow in the band of 4% to 5% in the second quarter of 2017 (old guidance had hinted at growth of 4.5% to 5.5%). Capacity for the current quarter is projected to grow 14.5% (old guidance hinted at 16.7% year-over-year growth). Also, fuel cost per gallon (economic) is now pegged at $1.66, compared with $1.76 expected earlier (read more: Spirit Airlines' May Load Factor Falls, Q2 CASM View Raised).
4. While revealing its May traffic data, Chicago-based United Continental reiterated its second-quarter guidance for passenger unit revenues. The metric is still expected to grow in the band of 1% to 3% on a year-over-year basis. The carrier, like most of its peers, suffered a decline in load factor in the month as capacity expansion outpaced traffic growth (read more: United Continental's Traffic in May Rises, Load Factor Falls).
United Continental sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
5. JetBlue Airways Corporation (JBLU - Free Report) reported a 3.8% increase in May traffic. Load factor increased in the month as traffic growth outpaced capacity expansion (3.7%). The low-cost carrier still expects revenue per available seat mile (RASM) for the second quarter of 2017 to increase between 4% and 6% (read more: JetBlue Airways May Traffic & Load Factor Rise, Capacity Up).
6. May traffic at GOL Linhas dropped 2.4%, while capacity contracted 4.6%. Load factor rose to 76.6% from 74.9% in May 2016. This was owing to capacity contraction that was wider than traffic decline (read more: GOL Linhas Traffic & Capacity Fall in May, Load Factor Rises).
Performance
The following table shows the price movement of the major airline players over the past week and the last six months.
Company
Past Week
Last 6 months
HA
-0.91%
-2.5%
UAL
-4.2%
6.8%
GOL
-3.4%
76.92%
DAL
1.6%
5.3%
JBLU
2.3%
2.31%
AAL
0.4%
3.82%
SAVE
-2.5%
-5.9%
LUV
-1.42%
20%
CPA
2.9%
21.52%
ALK
0.6%
3.04%
The table shows that airline stocks have exhibited a mixed trend with respect to price over the past week. Shares of United Continental depreciated the most (4.2%), while Copa Holdings (CPA - Free Report) emerged as the biggest gainer (2.9%). Over the course of the last six months, the NYSE ARCA Airline Index appreciated 4.4% on the back of GOL Linhas’ huge gain (76.92%).
What's Next in the Airline Space?
With President Trump expected to announce changes to the existing Cuba policy on Jun 16, investors interested in the space will keenly await updates on the same.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>