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Airline Stock Roundup: JBLU's $3.6 B Bid to Buy SAVE, RYAAY's Better View & More
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In the past week, JetBlue Airways (JBLU - Free Report) offered $3.6 billion to buy Spirit Airlines (SAVE - Free Report) . JetBlue’s $3.6-billion bid, equivalent to $33 per share in cash, represents a premium of 50% to its closing share price on Apr 4, 2022.
European carrier Ryanair Holdings (RYAAY - Free Report) was also in the news owing to its upbeat traffic. Owing to the sunny scenario with respect to passenger traffic, RYAAY narrowed its forecast for fiscal 2022 net loss. Delta Air Lines (DAL - Free Report) was another newsmaker, courtesy of its fleet-modernization exercise. Gol Linhas’ March traffic report was impressive, reflecting the uptick in air-travel demand in Brazil.
Recap of the Latest Top Stories
1. JetBlue’s all-cash offer, on materialization, would create the fifth-largest domestic airline, giving tough competition to the big four U.S. carriers. The Spirit Airlines deal is expected to help JetBlue expand its footprint in New York and Florida. The merger will help JBLU expand across the United States, the Caribbean and Latin America. The combined entity would offer more than 1,700 daily flights to over 130 destinations in 27 countries. The transaction is expected to generate $600-700 million in net annual synergies upon completion of integration. The combined company is predicted to generate annual revenues of approximately $11.9 billion (based on 2019 revenues). Excluding integration costs, the transaction is expected to be accretive to JetBlue’s earnings per share in the first full year.
JetBlue was also in the news recently when it decided to add 5,000 jobs in the New York City this year to meet the uptick in air-travel demand. The story was covered in the previous week’s write-up.
2. To modernize its fleet, Delta, currently carrying a Zacks Rank #3 (Hold), announced that it will start operating its first of 155 new Airbus A321neo aircraft from May 20, 2022. The debut flight using a new aircraft will take off from Delta's Boston hub and head for San Fransisco. In the coming months, Delta will further expand flight services on the Airbus A321neo plane to include destinations like Denver, San Diego and Seattle. While flights to Seattle will begin operating on Aug 11, services to San Diego and Denver will commence from Aug 20.
3. Owing to expanded passenger volumes, Ryanair now expects a loss in fiscal 2022 in the €350-€400 million range. The earlier outlook was of a loss in the €250-€450 million band. The forecast of a narrower loss comes on the back of an uptick in air traffic at Ryanair for the month of March, which exceeded the pre-pandemic levels. Evidently, in March 2022, RYAAY transported 11.2 million passengers, above the 0.5 million carried in March 2021, 5.5 million in March 2020 and 10.9 million in the pre-pandemic era of March 2019.
4. In March, Gol Linhas’ consolidated traffic jumped 113.9% year over year. To match the increased demand situation, GOL is expanding its capacity. In the same month, capacity grew 93% year over year. Since traffic growth was more than capacity expansion, load factor (percentage of seats filled by passengers) improved 7.7 percentage points (p.p) to 79.5% last month.
Upbeat traffic in its domestic markets is leading to the rosy scenario on a consolidated basis. In March, domestic traffic and capacity improved 106.4% and 86.1%, respectively. On the domestic front, 119.3% more passengers boarded GOL’s flights 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.
Image Source: Zacks Investment Research
The table above shows that all airline stocks, apart from Spirit Airlines, traded in the red over the past week. The NYSE ARCA Airline Index decreased 3.73% to $77.52. Over the course of the past six months, the NYSE ARCA Airline Index declined 19.4%.
What's Next in the Airline Space?
Investors will keep an eye on the first-quarter 2022 earnings report of Delta, scheduled to be released on Apr 13.
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Airline Stock Roundup: JBLU's $3.6 B Bid to Buy SAVE, RYAAY's Better View & More
In the past week, JetBlue Airways (JBLU - Free Report) offered $3.6 billion to buy Spirit Airlines (SAVE - Free Report) . JetBlue’s $3.6-billion bid, equivalent to $33 per share in cash, represents a premium of 50% to its closing share price on Apr 4, 2022.
European carrier Ryanair Holdings (RYAAY - Free Report) was also in the news owing to its upbeat traffic. Owing to the sunny scenario with respect to passenger traffic, RYAAY narrowed its forecast for fiscal 2022 net loss. Delta Air Lines (DAL - Free Report) was another newsmaker, courtesy of its fleet-modernization exercise. Gol Linhas’ March traffic report was impressive, reflecting the uptick in air-travel demand in Brazil.
Recap of the Latest Top Stories
1. JetBlue’s all-cash offer, on materialization, would create the fifth-largest domestic airline, giving tough competition to the big four U.S. carriers. The Spirit Airlines deal is expected to help JetBlue expand its footprint in New York and Florida. The merger will help JBLU expand across the United States, the Caribbean and Latin America. The combined entity would offer more than 1,700 daily flights to over 130 destinations in 27 countries. The transaction is expected to generate $600-700 million in net annual synergies upon completion of integration. The combined company is predicted to generate annual revenues of approximately $11.9 billion (based on 2019 revenues). Excluding integration costs, the transaction is expected to be accretive to JetBlue’s earnings per share in the first full year.
JetBlue was also in the news recently when it decided to add 5,000 jobs in the New York City this year to meet the uptick in air-travel demand. The story was covered in the previous week’s write-up.
2. To modernize its fleet, Delta, currently carrying a Zacks Rank #3 (Hold), announced that it will start operating its first of 155 new Airbus A321neo aircraft from May 20, 2022. The debut flight using a new aircraft will take off from Delta's Boston hub and head for San Fransisco. In the coming months, Delta will further expand flight services on the Airbus A321neo plane to include destinations like Denver, San Diego and Seattle. While flights to Seattle will begin operating on Aug 11, services to San Diego and Denver will commence from Aug 20.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3. Owing to expanded passenger volumes, Ryanair now expects a loss in fiscal 2022 in the €350-€400 million range. The earlier outlook was of a loss in the €250-€450 million band. The forecast of a narrower loss comes on the back of an uptick in air traffic at Ryanair for the month of March, which exceeded the pre-pandemic levels. Evidently, in March 2022, RYAAY transported 11.2 million passengers, above the 0.5 million carried in March 2021, 5.5 million in March 2020 and 10.9 million in the pre-pandemic era of March 2019.
4. In March, Gol Linhas’ consolidated traffic jumped 113.9% year over year. To match the increased demand situation, GOL is expanding its capacity. In the same month, capacity grew 93% year over year. Since traffic growth was more than capacity expansion, load factor (percentage of seats filled by passengers) improved 7.7 percentage points (p.p) to 79.5% last month.
Upbeat traffic in its domestic markets is leading to the rosy scenario on a consolidated basis. In March, domestic traffic and capacity improved 106.4% and 86.1%, respectively. On the domestic front, 119.3% more passengers boarded GOL’s flights 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.
Image Source: Zacks Investment Research
The table above shows that all airline stocks, apart from Spirit Airlines, traded in the red over the past week. The NYSE ARCA Airline Index decreased 3.73% to $77.52. Over the course of the past six months, the NYSE ARCA Airline Index declined 19.4%.
What's Next in the Airline Space?
Investors will keep an eye on the first-quarter 2022 earnings report of Delta, scheduled to be released on Apr 13.