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Airline Stock Roundup: Southwest Airlines Trims Cuba Service, Lap Top Ban Update & More
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The past week, which had one less trading day owing to Independence Day, saw low cost carrier Southwest Airlines (LUV - Free Report) deciding against flying to two Cuban cities from Sep 5. United Airlines, the wholly owned subsidiary of United Continental Holdings (UAL - Free Report) , also hit headlines by virtue of its customer-friendly announcement to include Boeing 777-300ER jets on more routes.
Horizon Air, a subsidiary of Alaska Air Group (ALK - Free Report) , also invited attention in the week, due to the shortfall of pilots. Moreover, the US Department of Homeland Security (DHS) has called for tighter security measures instead of banning lap tops in the passenger cabins of U.S. bound flights.
On the price front, the NYSE ARCA Airline Index has increased marginally to $115.59 over the past week.
1. Southwest Airlines became the latest U.S. carrier to reduce its services to Cuba, thereby joining the likes of American Airlines Group (AAL - Free Report) and JetBlue Airways Corporation (JBLU - Free Report) . The Dallas-based carrier has decided not to fly to Varadero and Santa Clara as the routes have ceased to be viable. The tweaked Cuba policy announced by President Trump might also have played a part in Southwest’s decision (read more: Southwest Airlines to Terminate Service in 2 Cuban Cities).
2. United Airlines has introduced Boeing 777-300ER service (the airline’s latest aircraft type featuring the all-new United Polaris business class seats) to additional routes. The westbound service between San Francisco and Beijing is scheduled to begin from Sep 6, 2017, while the eastbound journey is expected to take off on Sep 8, 2017 (read more: United Airlines Extends Boeing 777-300ER to Extra Routes).
3. In a bid to combat terrorism, DHS has called for enhanced security measuresfor all commercial flights into the U.S. The requirement replaces the need to ban passengers from carrying lap tops in the cabins of the flights. In the event of compliance with the requirements, the ban, currently operational in 10 airports in seven Middle Eastern nations and Turkey, will also be lifted.
4. Horizon Air will reportedly operate lesser flights this summer due to acute pilot shortfall. In fact, the carrier already cancelled multiple flights in June due to this problem. To combat the issue, the carrier has undertaken measures like offering double salary to pilots undertaking extra workload to operate more flights. Additionally, there has been a management change at Horizon Air, with George Knobloch being appointed as the vice president of maintenance and engineering.
5. Ireland-based Ryanair Holdings (RYAAY - Free Report) reported solid traffic data for the month of June on the back of its customer friendly “Always Getting Better” scheme. The carrier’s traffic climbed 12% to 11.8 million in the month. Load factor (percentage of seats filled by passengers) rose to 96% from 94% a year ago on the back of lower air ticket prices.
Performance
The following table shows the price movement of the major airline players over the past week and during the last six months.
Company
Past Week
Last 6 months
HA
1.07%
-15.94%
UAL
-2.29%
3.26%
GOL
-2.61%
49.20%
DAL
3.29%
10.14%
JBLU
1.68%
2.81%
AAL
3.11%
9.31%
SAVE
-3.35%
-10.58%
LUV
-0.45%
24.66%
CPA
2.68%
28.49%
ALK
3.21%
-0.20%
The table above shows that the majority of airline stocks traded in the green over the past week. However, the gains were muted in nature. Shares of Delta Air Lines (DAL - Free Report) gained the most (3.29%) while Spirit Airlines was the biggest laggard (3.35%).
Over the course of six months, the NYSE ARCA Airline Index has appreciated 4.4% riding on impressive gains at Latin American carriers GOL Linhas and Copa Holdings. Shares of Hawaiian Holdings have depreciated the most (15.94%) over the period.
What's Next in the Airline Space?
We expect June traffic reports from the likes of Southwest Airlines, United Continental and Spirit Airlines in the coming days.
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Airline Stock Roundup: Southwest Airlines Trims Cuba Service, Lap Top Ban Update & More
The past week, which had one less trading day owing to Independence Day, saw low cost carrier Southwest Airlines (LUV - Free Report) deciding against flying to two Cuban cities from Sep 5. United Airlines, the wholly owned subsidiary of United Continental Holdings (UAL - Free Report) , also hit headlines by virtue of its customer-friendly announcement to include Boeing 777-300ER jets on more routes.
Horizon Air, a subsidiary of Alaska Air Group (ALK - Free Report) , also invited attention in the week, due to the shortfall of pilots. Moreover, the US Department of Homeland Security (DHS) has called for tighter security measures instead of banning lap tops in the passenger cabins of U.S. bound flights.
On the price front, the NYSE ARCA Airline Index has increased marginally to $115.59 over the past week.
Transportation - Airline Industry 5YR % Return
Transportation - Airline Industry 5YR % Return
(Read the last Airline Stock Roundup for Jun 28, 2017).
Recap of the Past Week’s Most Important Stories
1. Southwest Airlines became the latest U.S. carrier to reduce its services to Cuba, thereby joining the likes of American Airlines Group (AAL - Free Report) and JetBlue Airways Corporation (JBLU - Free Report) . The Dallas-based carrier has decided not to fly to Varadero and Santa Clara as the routes have ceased to be viable. The tweaked Cuba policy announced by President Trump might also have played a part in Southwest’s decision (read more: Southwest Airlines to Terminate Service in 2 Cuban Cities).
Southwest Airlines carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2. United Airlines has introduced Boeing 777-300ER service (the airline’s latest aircraft type featuring the all-new United Polaris business class seats) to additional routes. The westbound service between San Francisco and Beijing is scheduled to begin from Sep 6, 2017, while the eastbound journey is expected to take off on Sep 8, 2017 (read more: United Airlines Extends Boeing 777-300ER to Extra Routes).
3. In a bid to combat terrorism, DHS has called for enhanced security measuresfor all commercial flights into the U.S. The requirement replaces the need to ban passengers from carrying lap tops in the cabins of the flights. In the event of compliance with the requirements, the ban, currently operational in 10 airports in seven Middle Eastern nations and Turkey, will also be lifted.
4. Horizon Air will reportedly operate lesser flights this summer due to acute pilot shortfall. In fact, the carrier already cancelled multiple flights in June due to this problem. To combat the issue, the carrier has undertaken measures like offering double salary to pilots undertaking extra workload to operate more flights. Additionally, there has been a management change at Horizon Air, with George Knobloch being appointed as the vice president of maintenance and engineering.
5. Ireland-based Ryanair Holdings (RYAAY - Free Report) reported solid traffic data for the month of June on the back of its customer friendly “Always Getting Better” scheme. The carrier’s traffic climbed 12% to 11.8 million in the month. Load factor (percentage of seats filled by passengers) rose to 96% from 94% a year ago on the back of lower air ticket prices.
Performance
The following table shows the price movement of the major airline players over the past week and during the last six months.
Company
Past Week
Last 6 months
HA
1.07%
-15.94%
UAL
-2.29%
3.26%
GOL
-2.61%
49.20%
DAL
3.29%
10.14%
JBLU
1.68%
2.81%
AAL
3.11%
9.31%
SAVE
-3.35%
-10.58%
LUV
-0.45%
24.66%
CPA
2.68%
28.49%
ALK
3.21%
-0.20%
The table above shows that the majority of airline stocks traded in the green over the past week. However, the gains were muted in nature. Shares of Delta Air Lines (DAL - Free Report) gained the most (3.29%) while Spirit Airlines was the biggest laggard (3.35%).
Over the course of six months, the NYSE ARCA Airline Index has appreciated 4.4% riding on impressive gains at Latin American carriers GOL Linhas and Copa Holdings. Shares of Hawaiian Holdings have depreciated the most (15.94%) over the period.
What's Next in the Airline Space?
We expect June traffic reports from the likes of Southwest Airlines, United Continental and Spirit Airlines in the coming days.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>