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Airline Stock Roundup: JBLU's Expansion Update, ALGT's Traffic and More

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In the past week, JetBlue Airways Corporation (JBLU - Free Report) launched additional flights, in line with its objective to rebuild international demand. The move was in response to the recovery in air-travel demand (especially for leisure) as more and more people get immunization shots everyday.

Delta Air Lines (DAL - Free Report) was also in news owing to efforts to restore its international network. In sync with this purpose, the carrier intends to resume flights to South Africa shortly. An expansion update was also available from Alaska Airlines, the wholly owned subsidiary of Alaska Air Group (ALK - Free Report) in response to the demand uptick. Allegiant Travel Company (ALGT - Free Report) too grabbed headlines in the past week, courtesy of its impressive traffic report for May as more and more people take to the skies.

Recap of the Past Week’s Most Important Stories

1. As part of its expansion strategy, JetBlue, currently carrying a Zacks Rank #3 (Hold), started operating two new routes from New York’s John F. Kennedy International Airport and Los Angeles International Airport to Mexico’s Los Cabos International Airport. With this, JetBlue linked Los Cabos with both coasts of the United States via daily operations. Notably, the airline will operate on the Los Cabos routes using its Airbus A320 jets.

JetBlue was also in news in the previous week when it issued an improved outlook for the June-quarter revenues. That piece of news was covered in the previous week’s write up.

JetBlue currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2. Delta intends to resume services (thrice a week) between Atlanta and Johannesburg on Aug 1. The carrier will ply Airbus A350-900 jets to operate flights on this route. In fact, Delta’s decision to resume operations to South Africa implies that flights to all the African markets that the carrier had served prior to the pandemic will be restored. Notably, the airline currently operates nearly 20 flights to its African markets per week.

3. Southwest Airlines (LUV - Free Report) had to cancel or delay multiple flights in the past week due to technical issues. The flight cancellations and delays during the presumably busy summer travel period might hurt the company’s bookings, which had been seeing a steady rise lately on the back of improved leisure travel demand.

4. At Allegiant, scheduled traffic (measured in revenue passenger miles) surged 172% from May 2020 levels. Capacity (measured in available seat miles) for scheduled service increased 87.3% from the May 2020 reading. With the traffic surge outweighing capacity expansion, load factor (% of seats filled by passengers) in the month expanded 21.4 points to 68.7% from the year-ago period. For the total system (including scheduled service and fixed fee contract), Allegiant carried more passengers in May 2021, up 186.4% year over year.

5. Alaska Airlines launched a daily nonstop service from Boise Airport to Chicago O’Hare International Airport and Austin-Bergstrom International Airport. Moreover, as part of its expansion program, the carrier announced plans to add two seasonal routes from Boise to Pullman-Moscow Regional Airport and Phoenix Sky Harbor International Airport. While flights on the Boise-Moscow route will operate from Aug 17, 2021, those on the Boise-Phoenix route will initiate services on Nov 19.

 

Performance

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

Zacks Investment ResearchImage Source: Zacks Investment Research

The table above shows that most airline stocks have traded in the green over the past week even though the gains were muted in nature, causing the NYSE ARCA Airline Index to gain only 0.6% to $105.33. Over the course of the past six months, the NYSE ARCA Airline Index has appreciated 29.3%.

What’s Next in the Airline Space?

Stay tuned for the usual news updates on the space.

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