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American Airlines (AAL) to Buy Super-Fast Passenger Jets

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In a bid to modernize its fleet, American Airlines (AAL - Free Report) inked a deal with Boom Supersonic to purchase up to 20 Overture planes from the latter. AAL already made a non-refundable deposit for the fleet. The agreement also includes the option of buying 40 more such high-speed jets for the airline that are expected to carry passengers at twice the speed of the fastest commercial aircraft available currently. Financial details of the deal remain undisclosed.

Boom expects to start rolling out the new super-fast jets in 2025. These planes are anticipated to start ferrying passengers by 2029. They are expected to carry 65-80 passengers on every trip.

Boom is designing the Overture aircraft in such a way that it manages to travel at Mach 1.7, with a range of 4,250 nautical miles. Introducing these planes to AAL’s fleet will make travel much faster. For example, passengers can travel on these jets from Miami to London in less than five hours and from Los Angeles to Honolulu in just three hours.

Expressing his delight at the deal win, American Airlines’ CFO Derek Kerr said, “Looking to the future, supersonic travel will be an important part of our ability to deliver for our customers. We are excited about how Boom will shape the future of travel both for our company and our customers.”

Zacks Rank & Key Picks

American Airlines currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Zacks Transportation  sector are C.H. Robinson Worldwide (CHRW - Free Report) and SkyWest (SKYW - Free Report) presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

C.H. Robinson is being aided by the improving freight scenario in the United States. Efforts to control costs also bode well. Measures to reward CHRW's shareholders instill further confidence in the stock.

C.H. Robinson has a pleasant earnings track record. The bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters (missing the mark in the remaining one). The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 13.8% upward over the past 60 days.

Continued recovery in air-travel demand bodes well for SkyWest. With improvement in air-travel demand, SkyWest carried 32.7% more passengers in first-half 2022 than the year-ago level. As a result, the passenger load factor (percentage of seats filled by passengers) expanded 1450 basis points to 82.1% in first-half 2022. SKYW’s fleet-modernization efforts are commendable as well.

The positivity surrounding the SkyWest stock is evident from the Zacks Consensus Estimate for current-year earnings being revised in excess of 100% upward over the past 60 days. SKYW has a Momentum Style Score of A.


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C.H. Robinson Worldwide, Inc. (CHRW) - free report >>

American Airlines Group Inc. (AAL) - free report >>

SkyWest, Inc. (SKYW) - free report >>

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