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Airline Stock Roundup: Azul Posts Loss in Q4, AAL, JBLU in Focus
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In the past week, Azul (AZUL - Free Report) reported a wider-than-expected loss per share for fourth-quarter 2021. However, the top line not only beat the Zacks Consensus Estimate but also improved in excess of 100% year over year, driven by the improvement in air-travel demand in Brazil. On the non-earnings front, American Airlines (AAL - Free Report) was the primary newsmaker when it announced the decision to reduce international flying this summer due to delivery delays of Boeing 787-8 jets.
Meanwhile, an expansion-related update was available from JetBlue Airways (JBLU - Free Report) as air-travel demand improved in the United States. Buoyed by the same factor, Spirit Airlines (SAVE - Free Report) also announced its intention of launching an additional route this summer.
Recap of the Latest Top Stories
1. Azul, currently carrying a Zacks Rank #3 (Hold), incurred a loss (excluding 69 cents from non-recurring items) of 58 cents per share in the fourth quarter of 2021, wider than the Zacks Consensus Estimate of a loss of 53 cents. The amount of loss, however, narrowed year over year. Total revenues of $668.4 million surpassed the Zacks Consensus Estimate of $628.7 million and increased more than 100% year over year as air-travel demand improved, courtesy of widespread vaccination programs in Brazil.
With more and more people taking to the skies, Azul’s passenger revenues, accounting for 91% of the top line, soared more than 100% year over year. Cargo and other revenues surged 30.8% year over year, primarily driven by upbeat demand for Azul’s logistics solutions. Consolidated traffic, measured in revenue passenger kilometers (RPKs), climbed 49.2% (up 46.9% domestic & 83.1% international) year over year. Consolidated available seat kilometers (ASK), which gauges an airline's passenger-carrying capacity, advanced 46.5% from the same period last year with a 48.6% rise in international capacity. The same expanded 46.3% on the domestic front. Since traffic surge was less than the amount of capacity expansion, load factor (percentage of seats filled with passengers) improved 1.5 percentage points to 82.2%.
2. With Boeing likely to deliver only 10 787 Dreamliner jets to American Airlines in 2022 due to production issues compared to the original plan of 13, AAL is delaying the launch of one service, temporarily suspending some flights and reducing flight frequency on one route. Despite reducing its international schedule this summer, American Airlines will offer nearly 6,000 peak-day departures. In a SEC filing, AAL said, “Our 787-8 aircraft are an essential part of our fleet. And despite the ongoing delay, we still have tremendous confidence in the aircraft and will continue to work with Boeing on their delivery.”
3. In a bid to expand its network, JetBlue launched non-stop flights between New York’s John F. Kennedy International Airport (JFK) and Puerto Vallarta’s Gustavo Diaz Ordaz International Airport, expanding its presence in Mexico. The Puerto Vallarta service, which began on Feb 19, will operate four times a week. Puerto Vallarta is the third destination being served by JetBlue in Mexico.
JetBlue was in the news recently when it decided to expand its fleet by ordering more Airbus A220s. JetBlue’s fleet-related news was reported in detail in the previous week’s write-up.
4. Owing to upbeat air-travel demand in the United States, Spirit Airlines reportedly intends to launch nonstop seasonal flights connecting Milwaukee Mitchell International Airport and Myrtle Beach, SC, this summer. The flights will operate from May 27. Initially, they will ply on Fridays and Mondays. However, from Jun 17, the service that will run through Labor Day weekend will be available on Mondays, Wednesdays and Fridays. Evidently, Myrtle Beach is SAVE’s ninth non-stop destination from Milwaukee.
Performance
The following table shows the price movement of the major airline players over the past week and during the last six months.
Image Source: Zacks Investment Research
The table above shows that almost all airline stocks traded in the red over the past week due to the Russia/Ukraine tensions. The NYSE ARCA Airline Index increased 4.9% to $89.73. Over the course of the past six months, the NYSE ARCA Airline Index declined 10.4%.
What's Next in the Airline Space?
With the earnings season over in the airline space, stay tuned for the usual news updates in the space.
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Airline Stock Roundup: Azul Posts Loss in Q4, AAL, JBLU in Focus
In the past week, Azul (AZUL - Free Report) reported a wider-than-expected loss per share for fourth-quarter 2021. However, the top line not only beat the Zacks Consensus Estimate but also improved in excess of 100% year over year, driven by the improvement in air-travel demand in Brazil. On the non-earnings front, American Airlines (AAL - Free Report) was the primary newsmaker when it announced the decision to reduce international flying this summer due to delivery delays of Boeing 787-8 jets.
Meanwhile, an expansion-related update was available from JetBlue Airways (JBLU - Free Report) as air-travel demand improved in the United States. Buoyed by the same factor, Spirit Airlines (SAVE - Free Report) also announced its intention of launching an additional route this summer.
Recap of the Latest Top Stories
1. Azul, currently carrying a Zacks Rank #3 (Hold), incurred a loss (excluding 69 cents from non-recurring items) of 58 cents per share in the fourth quarter of 2021, wider than the Zacks Consensus Estimate of a loss of 53 cents. The amount of loss, however, narrowed year over year. Total revenues of $668.4 million surpassed the Zacks Consensus Estimate of $628.7 million and increased more than 100% year over year as air-travel demand improved, courtesy of widespread vaccination programs in Brazil.
With more and more people taking to the skies, Azul’s passenger revenues, accounting for 91% of the top line, soared more than 100% year over year. Cargo and other revenues surged 30.8% year over year, primarily driven by upbeat demand for Azul’s logistics solutions. Consolidated traffic, measured in revenue passenger kilometers (RPKs), climbed 49.2% (up 46.9% domestic & 83.1% international) year over year. Consolidated available seat kilometers (ASK), which gauges an airline's passenger-carrying capacity, advanced 46.5% from the same period last year with a 48.6% rise in international capacity. The same expanded 46.3% on the domestic front. Since traffic surge was less than the amount of capacity expansion, load factor (percentage of seats filled with passengers) improved 1.5 percentage points to 82.2%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2. With Boeing likely to deliver only 10 787 Dreamliner jets to American Airlines in 2022 due to production issues compared to the original plan of 13, AAL is delaying the launch of one service, temporarily suspending some flights and reducing flight frequency on one route. Despite reducing its international schedule this summer, American Airlines will offer nearly 6,000 peak-day departures. In a SEC filing, AAL said, “Our 787-8 aircraft are an essential part of our fleet. And despite the ongoing delay, we still have tremendous confidence in the aircraft and will continue to work with Boeing on their delivery.”
3. In a bid to expand its network, JetBlue launched non-stop flights between New York’s John F. Kennedy International Airport (JFK) and Puerto Vallarta’s Gustavo Diaz Ordaz International Airport, expanding its presence in Mexico. The Puerto Vallarta service, which began on Feb 19, will operate four times a week. Puerto Vallarta is the third destination being served by JetBlue in Mexico.
JetBlue was in the news recently when it decided to expand its fleet by ordering more Airbus A220s. JetBlue’s fleet-related news was reported in detail in the previous week’s write-up.
4. Owing to upbeat air-travel demand in the United States, Spirit Airlines reportedly intends to launch nonstop seasonal flights connecting Milwaukee Mitchell International Airport and Myrtle Beach, SC, this summer. The flights will operate from May 27. Initially, they will ply on Fridays and Mondays. However, from Jun 17, the service that will run through Labor Day weekend will be available on Mondays, Wednesdays and Fridays. Evidently, Myrtle Beach is SAVE’s ninth non-stop destination from Milwaukee.
Performance
The following table shows the price movement of the major airline players over the past week and during the last six months.
Image Source: Zacks Investment Research
The table above shows that almost all airline stocks traded in the red over the past week due to the Russia/Ukraine tensions. The NYSE ARCA Airline Index increased 4.9% to $89.73. Over the course of the past six months, the NYSE ARCA Airline Index declined 10.4%.
What's Next in the Airline Space?
With the earnings season over in the airline space, stay tuned for the usual news updates in the space.