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Airline Stock Roundup: AAL, LUV & Others Report Q1 Loss Amid Coronavirus Woes

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In the past week, American Airlines (AAL - Free Report) , Alaska Air Group (ALK - Free Report) , Southwest Airlines (LUV - Free Report) Spirit Airlines (SAVE - Free Report) and JetBlue Airways (JBLU - Free Report) reported losses for first-quarter 2021. Moreover, the quarterly losses widened year over year as passenger revenues were weaker than first-quarter 2020 levels despite the recent improvement in air-travel demand. Notably, Delta Air Lines (DAL - Free Report) and United Airlines (UAL - Free Report) also incurred a loss in first-quarter 2021, per the previous week’s write up

Recap of the Past Week’s Most Important Stories

1. American Airlines, currently carrying a Zacks Rank #3 (Hold), incurred a loss (excluding $2.35 from non-recurring items) of $4.32 per share, comparing favorably with the Zacks Consensus Estimate of a loss of $4.35. However, quarterly loss per share was wider than the year-ago loss of $2.65. Moreover, operating revenues of $4,008 million slumped 52.9% year over year and also fell short of the Zacks Consensus Estimate of $4,031 million. Consolidated load factor (percentage of seats filled by passengers) decreased 13.2 percentage points to 59.5% as traffic decline was more than the capacity reduction.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2. Southwest Airlines incurred a loss of $1.72 per share (excluding $1.91 from non-recurring items) in the first quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.82. In the year-ago period, the company incurred a loss of 15 cents per share. Results were affected by a significant decline in passenger revenues as a consequence of persistent weakness in air-travel demand amid coronavirus concerns. While travel demand improved with increased vaccination and easing coronavirus-induced restrictions, it continues to be below pre-pandemic levels.

3. Alaska Air Group incurred a first-quarter 2021 loss (excluding $2.46 from non-recurring items) of $3.51 per share, narrower than the Zacks Consensus Estimate of a loss of $3.71. In the year-ago quarter, the company incurred a loss per share of 82 cents. Results were hurt by a significant decline in passenger revenues as coronavirus keeps air-travel demand suppressed. Revenues at Alaska Air came in at $797 million, surpassing the Zacks Consensus Estimate of $787.1 million. The top line, however, declined 51.3% year over year. Passenger revenues plunged 56%.

4. Spirit Airlinesfirst-quarter 2021 loss (excluding $1.33 from non-recurring items) of $2.48 per share was narrower than the Zacks Consensus Estimate of a loss of $2.63 but wider than the year-ago loss of 86 cents. Additionally, operating revenues of $461.3 million not only declined 40.2% year over year but also fell short of the Zacks Consensus Estimate of $465.4.

5. JetBlue incurred a first-quarter 2021 loss (excluding 70 cents from non-recurring items) of $1.48 per share, comparing favorably with the Zacks Consensus Estimate of a loss of $1.62. Moreover, in first-quarter 2021 operating revenues of $733 million plunged 53.8% year over year due to the 55.7% decrease in passenger revenues. Revenues for the second quarter of 2021 are expected to decline in the 30-35% range from the second-quarter 2019 actuals.  Capacity is anticipated to contract at least 15% in the June quarter from the figure reported in the second quarter of 2019. Operating expenses are expected to be roughly 8% down from the recorded second-quarter 2019 levels. Average fuel cost per gallon in the June quarter is estimated to be $1.87.  EBITDA is expected in the range of a negative $100-$200 million. The company expects to touch a break-even point in the third quarter of 2021 on an EBITDA basis.

Performance

The following table shows the price movement of major airline players over the past week and during the last 6 months.

The table above shows that all airline stocks have traded in the green during the past week, leading the NYSE ARCA Airline Index to gain 4.4% to $105.01. Over the course of the past six months, the NYSE ARCA Airline Index has appreciated 92.2%.

 

What's Next in the Airline Space?

Investors will keenly await first-quarter 2021 earnings report of SkyWest (SKYW - Free Report) , scheduled to be released on Apr 29

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