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Airline Stock Roundup: LUV's Long-Serving CEO to Step Down, RYAAY in Focus
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In the past week, Gary Kelly, who has been serving Southwest Airlines (LUV - Free Report) as its CEO since 2004, announced that he will relinquish his post in early 2022. This Dallas-based carrier was also in news when it reportedly decided to increase the minimum remuneration of its nearly 7,000 employees to $15 an hour. The strategic move is aimed at retaining/attracting workers as air-travel demand picks up.
Notably, the raises, which will be effective Aug 1, will be in the 7-11% range for the new hirees. Moreover, this pay-hike plan will cover the call center operators, customer service agents, skycaps and others. However, the company will have to negotiate with labor unions before the increased wage materializes for some labor groups.
Meanwhile, Ryanair Holdings (RYAAY - Free Report) announced the addition of 200,000 seats on flights from the United Kingdom to Malta and the Balearics (Ibiza and Palma) for July, August and September. This follows the U.K. government’s decision to include these islands on the green list for travel, which allows people to visit these places without having to quarantine (provided their COVID-19 test results are negative) themselves on their return. The relaxation is set to be implemented on Jun 30.
Recap of the Past Week’s Most Important Stories
1. Southwest Airlines picked company veteran Robert Jordan to succeed Gary Kelly as its new CEO, once the latter steps down in February 2022. Kelly, however, plans to serve as the company’s executive chairman through 2026. Notably, Jordan joined the carrier in 1988 and currently serves as its executive vice president, corporate services. He played a crucial role in several transformational measures taken by the company.
2. Delta Air Lines (DAL - Free Report) expanded its codeshare agreement with Kenya Airways, thereby boosting connectivity between the United States and Africa. The agreement builds on the two airlines’ existing codeshare network to offer smooth travel to 39 cities across Africa, the United States and Canada. As part of this extended deal, customers can have access to flights operated by Kenya Airways on the routes to Monrovia, Liberia and Freetown in Sierra Leone where Delta shared its code.
Notably, Delta is constantly looking to restore its international network. To this end, this Atlanta, GA-based carrier announced plans to resume flights to South Africa shortly, as was mentioned in the previous week’s write-up.
3. With the onset of the summer travel period, Ryanair is seeing a swell in passenger numbers despite coronavirus-led travel restrictions, per a Reuters report. In an interview with Reuters, Ryanair’s CEO Michael O'Leary stated that bookings witnessed significant recovery over the last eight weeks with increased number of the same to Portugal and other popular destinations from Germany, Scandinavia and the Benelux countries. Per the report, O'Leary said, "Traffic is mushrooming and a lot of that folk are families going on summer holidays to the beaches of Portugal, Spain, Greece and Italy." He further added that the airline expected to fly 80-100 million passengers in fiscal 2022.
4. Spirit Airlines (SAVE - Free Report) started operating non-stop flights to Milwaukee Mitchell International Airport Jun 24 onward. The inaugural celebrations, however, brought more good news to fliers. Management of this Miramar, FL-based ultra low-cost carrier announced that additional non-stop flights to this favorite tourist spot in the state of Wisconsin will be launched later this year. On materialization, the above expansion will nearly triple Spirit Airlines’ flights to Milwaukee.
5. Reflecting the upswing in air-travel demand as more and more people are being administered the COVID-19 vaccines, management at United Airlines (UAL - Free Report) expects adjusted pre-tax income for July to be positive. If this expectation comes true, the next month will definitely mark the first period since January 2020 when this key metric takes a favorable turn.
Performance
The following table shows the price movement of major airline players over the past week and during the last six months.
Image Source: Zacks Investment Research
The table above shows that most airline stocks barring American Airlines (AAL - Free Report) have traded in the red over the past week, inducing the NYSE ARCA Airline Index to dip 4.2% to $100. However, over the course of the past six months, the NYSE ARCA Airline Index has appreciated 16.2%.
What’s Next in the Airline Space?
Investors will keenly await the June traffic reports of the likes of Ryanair in the coming days
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Image: Bigstock
Airline Stock Roundup: LUV's Long-Serving CEO to Step Down, RYAAY in Focus
In the past week, Gary Kelly, who has been serving Southwest Airlines (LUV - Free Report) as its CEO since 2004, announced that he will relinquish his post in early 2022. This Dallas-based carrier was also in news when it reportedly decided to increase the minimum remuneration of its nearly 7,000 employees to $15 an hour. The strategic move is aimed at retaining/attracting workers as air-travel demand picks up.
Notably, the raises, which will be effective Aug 1, will be in the 7-11% range for the new hirees. Moreover, this pay-hike plan will cover the call center operators, customer service agents, skycaps and others. However, the company will have to negotiate with labor unions before the increased wage materializes for some labor groups.
Meanwhile, Ryanair Holdings (RYAAY - Free Report) announced the addition of 200,000 seats on flights from the United Kingdom to Malta and the Balearics (Ibiza and Palma) for July, August and September. This follows the U.K. government’s decision to include these islands on the green list for travel, which allows people to visit these places without having to quarantine (provided their COVID-19 test results are negative) themselves on their return. The relaxation is set to be implemented on Jun 30.
Recap of the Past Week’s Most Important Stories
1. Southwest Airlines picked company veteran Robert Jordan to succeed Gary Kelly as its new CEO, once the latter steps down in February 2022. Kelly, however, plans to serve as the company’s executive chairman through 2026. Notably, Jordan joined the carrier in 1988 and currently serves as its executive vice president, corporate services. He played a crucial role in several transformational measures taken by the company.
Southwest Airlines 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 Air Lines (DAL - Free Report) expanded its codeshare agreement with Kenya Airways, thereby boosting connectivity between the United States and Africa. The agreement builds on the two airlines’ existing codeshare network to offer smooth travel to 39 cities across Africa, the United States and Canada. As part of this extended deal, customers can have access to flights operated by Kenya Airways on the routes to Monrovia, Liberia and Freetown in Sierra Leone where Delta shared its code.
Notably, Delta is constantly looking to restore its international network. To this end, this Atlanta, GA-based carrier announced plans to resume flights to South Africa shortly, as was mentioned in the previous week’s write-up.
3. With the onset of the summer travel period, Ryanair is seeing a swell in passenger numbers despite coronavirus-led travel restrictions, per a Reuters report. In an interview with Reuters, Ryanair’s CEO Michael O'Leary stated that bookings witnessed significant recovery over the last eight weeks with increased number of the same to Portugal and other popular destinations from Germany, Scandinavia and the Benelux countries. Per the report, O'Leary said, "Traffic is mushrooming and a lot of that folk are families going on summer holidays to the beaches of Portugal, Spain, Greece and Italy." He further added that the airline expected to fly 80-100 million passengers in fiscal 2022.
4. Spirit Airlines (SAVE - Free Report) started operating non-stop flights to Milwaukee Mitchell International Airport Jun 24 onward. The inaugural celebrations, however, brought more good news to fliers. Management of this Miramar, FL-based ultra low-cost carrier announced that additional non-stop flights to this favorite tourist spot in the state of Wisconsin will be launched later this year. On materialization, the above expansion will nearly triple Spirit Airlines’ flights to Milwaukee.
5. Reflecting the upswing in air-travel demand as more and more people are being administered the COVID-19 vaccines, management at United Airlines (UAL - Free Report) expects adjusted pre-tax income for July to be positive. If this expectation comes true, the next month will definitely mark the first period since January 2020 when this key metric takes a favorable turn.
Performance
The following table shows the price movement of major airline players over the past week and during the last six months.
The table above shows that most airline stocks barring American Airlines (AAL - Free Report) have traded in the red over the past week, inducing the NYSE ARCA Airline Index to dip 4.2% to $100. However, over the course of the past six months, the NYSE ARCA Airline Index has appreciated 16.2%.
What’s Next in the Airline Space?
Investors will keenly await the June traffic reports of the likes of Ryanair in the coming days
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>