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Airline Stock Roundup: AAL Orders High-Speed Jets, DAL Gives Expansion Update

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In the past week, American Airlines (AAL - Free Report) was the chief newsmaker, courtesy of its announcement of making the initial payment to Boom Supersonic regarding the purchase of 20 high-speed jets. Delta Air Lines (DAL - Free Report) also grabbed the headlines following management’s decision to increase the frequency of flights to Seoul, driven by a strong rebound in international travel.

Highlighting its operational efficiency, Spirit Airlines (SAVE - Free Report) recorded its highest-ever completion factor (% of scheduled flights that are completed) for the month of July. Per data available from Cirium, a leading aviation data analysis company, Brazilian carrier Azul (AZUL - Free Report) emerged as the most on-time airline across the globe in July.

Recap of the Latest Top Stories

1. To modernize its fleet, American Airlines 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. AAL currently carries a Zacks Rank #3 (Hold).

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

2. Spirit Airlines’ operational performance in the Jun 5-Aug 5 period, during which the airline operated more than 44,000 domestic and international flights, was excellent. The stellar performance during the busy summer season is a huge positive for SAVE. The highly-impressive conduct may help it attract additional traffic as it is likely to have pleased passengers greatly. Apart from the record July performance with respect to the completion factor, SAVE’s completion factor during the period was 99.2% (which ranked 3rd in the U.S. airline industry). In the same time frame, there were 25 days when the completion factor was 100%. During the two-month period, 77.5% of flights arrived within 14 minutes of the scheduled time.

SAVE was also in the news when it reported a narrower-than-expected loss per share for second-quarter 2022. The story was reported in detail in the previous week’s write-up.

3. To expand its network in response to buoyant air-travel demand, Delta’s management decided to increase the frequency of its nonstop service between Seattle-Tacoma International Airport and Seoul-Incheon International Airport. To this end, Delta aims to introduce flights to Seoul, which will operate thrice a week from Dec 13. The new service will complement Delta’s existing daily operations and partner Korean Air’s five-times a week service. The addition implies that 15 flights per week will operate under Delta’s Seoul service.

4. Azul stated in its press release that per Cirium’s "The Airline On-Time Performance Report", the Brazilian carrier was the most punctual airline, globally (in terms of mainline service), in July with an on-time performance being 89.02%. The data considered 99.4% of AZUL's 25,003 flights in the month. Expressing delight at this development, the carrier’s president John Rodgerson said, "Once again I am incredibly proud of my more than 13,000 colleagues for delivering an industry leading experience for our customers.  This is the 2nd time in the previous 5 months that we have been number 1 in the world and we have been in the top 5 in every month since March."


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

Zacks Investment Research
Image Source: Zacks Investment Research


The table above shows that almost all airline stocks have traded in the red over the five trading days. The NYSE ARCA Airline Index has decreased 1.4% to $64.46. Over the past six months, the NYSE ARCA Airline Index has plummeted 25%

What's Next in the Airline Space?

Stay tuned for usual news updates on the space.


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