Back to top

Image: Shutterstock

Pilot-Hiring Plans Bode Well for U.S. Airlines: An Analysis

Read MoreHide Full Article

It is common knowledge that airlines in the United States are roaring back to life after reeling at length under the coronavirus pandemic since early 2020. This resurgence, attributable to the uptick in air-travel demand (particularly for leisure) with an increasing number of Americans getting the coronavirus jabs on a daily basis, is well-reflected in the stock movement of major airline companies so far this year.

Evidently, shares of American Airlines (AAL - Free Report) , DeltaAirLines (DAL - Free Report) , United Airlines (UAL - Free Report) , Southwest Airlines (LUV - Free Report) , JetBlue Airways (JBLU - Free Report) , Spirit Airlines (SAVE - Free Report) , Alaska Air Group (ALK - Free Report) and Hawaiian Holdings (HA - Free Report) have gained 40.7%,12.5%,27.4%,18.4%, 19.1%,34.8%, 22.6% and 56.2% year to date, respectively.

Zacks Investment ResearchImage Source: Zacks Investment Research

After being administered COVID-19 shots, people are naturally feeling safer to take to the skies as the fear of catching the infection from a fellow passenger is on the wane. The healthy state of air travel in the United States can be gauged from the Transportation Security Administration’s screening of 2.1 million people last Sunday i.e. Jun 20. This was the highest reading since early March 2020.

Airlines Aim to Hire Pilots

In response to the uptick in air-travel demand in the United States, airline heavyweights in the country are looking to recall pilots to meet the anticipated demand swell. Per a Reuters report, Delta intends to recruit more than 1,000 pilots by next summer. Per the update, the presently Zacks Rank #3 (Hold) Delta, expects the volume of leisure travel in the United States to return to pre-pandemic levels in the current month.

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

Southwest Airlines also aims to hire pilots by this year-end. With the Boeing 737 Max 7 jets likely to join the carrier’s fleet next year, the requirement for pilots is naturally high. Notably, this Dallas-based low-cost carrier currently has roughly 500 pilots participating in its coronavirus-induced voluntary leave program.

With booking trends showing an upward trend, American Airlines aims to resume pilot appointment this fall and expects roughly 300 new pilots to join the company by 2021 end. Echoing similar sentiments, the Chicago-based United Airlines also looks to augment its pilot workforce by employing nearly 300 new pilots shortly.

Route Additions Signal Traffic Buoyancy

With air-travel demand picking up, U.S. carriers are broadening their network by adding routes. Apart from additions to tourist-friendly spots, the airlines are recommencing services on the routes that were rendered non-operative by the coronavirus-led low air traffic.

For example, Delta aims to restart flying to South Africa very soon. To this end, its management announced plans to resume services (thrice a week) between Atlanta and Johannesburg on Aug 1. Similarly, Alaska Airlines (the wholly owned subsidiary of Alaska Air Group) recently 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 informed that it will add two seasonal routes from Boise to Pullman-Moscow Regional Airport and Phoenix Sky Harbor International Airport.

JetBlue also recently bolstered its international network by unveiling a service to the tourist-favorite Mexican destination of Los Cabos from both Los Angeles International Airport and New York’s JFK Airport.

Joining this frenzy of route additions, Spirit Airlines recently announced that it will operate non-stop flights from Manchester-Boston Regional Airport to four Florida cities, namely Fort Lauderdale, Fort Myers, Orlando and Tampa from October. We remind investors that owing to improving air-travel demand, the likes of JetBlue and Spirit Airlines recently provided a bullish outlook on key metrics for the June quarter.

The above write-up clearly suggests that the future of U.S. airlines is rosy. Boosted by an expanded traffic, we expect airlines, which were hard hit by the coronavirus pandemic due to dwindling passenger revenues, to become investor favorites once again.

Watch this space for more updates on the current buoyancy in air-travel demand in the United States

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.

Click here for the 4 trades >>