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American Airlines (AAL) Inks 5-Year Deal With Regional Carrier
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American Airlines (AAL - Free Report) entered into a capacity purchase agreement with Air Wisconsin, one of the oldest regional airlines. Per the terms of the deal, Air Wisconsin will be responsible for operating up to 60 aircraft of its fleet of 50-seat CRJ-200s from AAL’s hub at the Chicago - O’Hare International Airport. However, the agreement can be expanded in the future to include other hubs.
Wisconsin will operate Bombardier CRJ-200 regional jets on behalf of American Airlines from March 2023. The flights will be in service under the American Eagle brand. American Eagle is a network of multiple regional carriers that operate under a codeshare and service pact with AAL.
Initially, Air Wisconsin will fly 40 CRJs on AAL’s behalf. However, per the agreement, it has the option to add up to 20 such jets depending on air-travel demand. American Airlines will pay Air Wisconsin a fixed revenue (daily) for each aircraft flown under the agreement. The deal with the regional carrier allows AAL to expand its footprint further without having to increase the number of planes.
Air Wisconsin, like other regional carriers, is persistently struggling with pilot crisis. Currently, it operates flights for United Airlines (UAL - Free Report) from the Chicago-based carrier’s hubs at O’Hare and Dulles International Airports. Air Wisconsin’s partnership with UAL is likely to come to an end, in accordance with its terms.
Zacks Rank & Key Picks
Both American Airlines and United Airlines currently carry a Zacks Rank #3 (Hold). Some better-ranked stocks in the Zacks Transportation sector are SkyWest (SKYW - Free Report) and C.H. Robinson (CHRW - Free Report) .
Continued recovery in air-travel demand bodes well for SkyWest. With improvement in air-travel demand, SKYW 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 stock is evident from the Zacks Consensus Estimate for current-year earnings being revised in excess of 100% upward over the past 60 days. SkyWest has a Momentum Style Score of A. SKYW currently sports 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 an 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 17.6% upward over the past 60 days. C.H. Robinson currently carries a Zacks Rank #2 (Buy).
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American Airlines (AAL) Inks 5-Year Deal With Regional Carrier
American Airlines (AAL - Free Report) entered into a capacity purchase agreement with Air Wisconsin, one of the oldest regional airlines. Per the terms of the deal, Air Wisconsin will be responsible for operating up to 60 aircraft of its fleet of 50-seat CRJ-200s from AAL’s hub at the Chicago - O’Hare International Airport. However, the agreement can be expanded in the future to include other hubs.
Wisconsin will operate Bombardier CRJ-200 regional jets on behalf of American Airlines from March 2023. The flights will be in service under the American Eagle brand. American Eagle is a network of multiple regional carriers that operate under a codeshare and service pact with AAL.
Initially, Air Wisconsin will fly 40 CRJs on AAL’s behalf. However, per the agreement, it has the option to add up to 20 such jets depending on air-travel demand. American Airlines will pay Air Wisconsin a fixed revenue (daily) for each aircraft flown under the agreement. The deal with the regional carrier allows AAL to expand its footprint further without having to increase the number of planes.
Air Wisconsin, like other regional carriers, is persistently struggling with pilot crisis. Currently, it operates flights for United Airlines (UAL - Free Report) from the Chicago-based carrier’s hubs at O’Hare and Dulles International Airports. Air Wisconsin’s partnership with UAL is likely to come to an end, in accordance with its terms.
Zacks Rank & Key Picks
Both American Airlines and United Airlines currently carry a Zacks Rank #3 (Hold). Some better-ranked stocks in the Zacks Transportation sector are SkyWest (SKYW - Free Report) and C.H. Robinson (CHRW - Free Report) .
Continued recovery in air-travel demand bodes well for SkyWest. With improvement in air-travel demand, SKYW 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 stock is evident from the Zacks Consensus Estimate for current-year earnings being revised in excess of 100% upward over the past 60 days. SkyWest has a Momentum Style Score of A. SKYW currently sports 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 an 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 17.6% upward over the past 60 days. C.H. Robinson currently carries a Zacks Rank #2 (Buy).