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Airline Stock Roundup: Q3 Earnings Results of CPA, ALGT, UAL, AAL & SAVE in Focus

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In the past week, Latin American carrier Copa Holdings (CPA - Free Report) reported impressive earnings for third-quarter 2021. Results were aided by upbeat passenger revenues, which increased 48.4%, sequentially. Allegiant Travel Company (ALGT - Free Report) also featured in the headlines, courtesy of its impressive October traffic report.

In response to the uptick in air-travel demand, Spirit Airlines (SAVE - Free Report) added nonstop flights from Manchester. United Airlines (UAL - Free Report) decided to add flights to meet the anticipated surge in demand for the CES 2022 event. American Airlines (AAL - Free Report) resumed flights to India after a gap of almost 10 years.

Read the last Airline Roundup here

Recap of the Latest Top Stories

1. United Airlines plans to add 44 flights to Las Vegas for the CES 2022 event on seeing an uptick in flight searches for the major tech conference on its website. Management at UAL stated that a recent survey showed that 20% of the airline’s business customers expect traveling for meetings and conferences to exceed the pre-pandemic levels in 2022. Business travel showing signs of recovery is a significant positive for United Airlines, which like other U.S. airlines, sees a persistent lag in business-travel demand despite leisure-travel demand steadily improving from the coronavirus-induced slump. For the peak arrival days of Jan 3 and Jan 4, 2022, this currently Zacks Rank #3 (Hold) United Airlines will operate 81 flights to Las Vegas while on the peak departure days from Jan 8 to Jan 10, it will operate 109 flights.

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

2. Spirit Airlines expands its foothold at the Manchester-Boston Regional Airport (MHT) with new nonstop flights to the Southwest Florida International Airport in Fort Myers, FL and the Tampa International Airport. The new flights add to Spirit Airlines’ existing services to Fort Lauderdale and Orlando out of MHT, thus widening its presence in Florida.

3. At Allegiant, scheduled traffic (measured in revenue passenger miles) in October 2021 surged 51.2% from the October 2020 levels. Capacity (measured in available seat miles) for scheduled service increased 27.8% from the October 2020 reading. With the traffic surge outweighing capacity expansion, the load factor (% of seats filled by passengers) in October expanded 11.6 points to 74.7% from the year-ago period’s levels. For the total system (including scheduled service and fixed fee contract), Allegiant carried 51.4% more passengers in October 2021 from the year-ago period’s level. Compared with the October 2019 levels (pre-COVID), scheduled traffic and capacity rose 7.4% and 19.6%, respectively.

4. Copa Holdings’ third-quarter earnings (excluding 51 cents from non-recurring items) of 70 cents per share came against the Zacks Consensus Estimate of a loss of 17 cents. In the year-ago period, CPA incurred a loss of $2.86 due to coronavirus-led depressed air-travel demand. Quarterly revenues of $445 million also outperformed the Zacks Consensus Estimate of $420.9 million and rose significantly year over year, courtesy of the improvement in air-travel demand in Panama from the pandemic-driven lows of last year.

Copa Holdings expects capacity to be 5.1 billion in the fourth quarter of 2021, representing 83% of the schedule flown in the fourth quarter of 2019. The operating margin is estimated to be around 12% in the current quarter. CPA estimates total revenues to be approximately $545 million in the same period, representing about 80% of the fourth-quarter 2019 revenues. Fuel price per gallon is predicted to increase about 17%, sequentially, in the fourth quarter to $2.50.

5. After suspending flights to India, way back in 2012, American Airlines re-started operations to the country, per a Reuters report.  AAL already started operations on the New Delhi-New York route and intends to begin flights on the Bengaluru-Seattle route in March 2022.

Performance

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

Zacks Investment ResearchImage Source: Zacks Investment Research

The table above shows that all airline stocks traded in the red over the past week, causing the NYSE ARCA Airline Index to decrease 5.6% to $88.55. Over the course of the past six months, the NYSE ARCA Airline Index has depreciated 20.3%.

What's Next in the Airline Space?

With air-travel demand picking up in the United States, further expansion-related updates can be expected from the U.S.-based carriers.