For Immediate Release
Chicago, IL – November 18, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Copa Holdings (
CPA Quick Quote CPA - Free Report) , Azul ( AZUL Quick Quote AZUL - Free Report) , United Airlines ( UAL Quick Quote UAL - Free Report) , JetBlue Airways ( JBLU Quick Quote JBLU - Free Report) and Allegiant Travel Company ( ALGT Quick Quote ALGT - Free Report) . Here are highlights from Thursday’s Analyst Blog: Airline Stock Roundup: Q3 Earnings & More
In the past week,
Azul reported a wider-than-expected loss for third-quarter 2022 due to high costs. Another Latin American carrier, Copa Holdings delivered better-than-expected earnings per share in the third quarter, riding on the upbeat air-travel demand scenario. More earnings-related news is available in the past week’s write-up.
Coming back to this week’s write-up,
United Airlines expects to make the most of the buoyant air-travel demand scenario this Thanksgiving travel period. Anticipating high passenger volume, UAL expects to transport 12% more passengers from the 2021 levels during the Thanksgiving travel period. An expansion-related update from JetBlue Airways was also available in the past week. Recap of the Latest Top Stories
1.Azul incurred a loss (excluding $1.52 from non-recurring items) of 72 cents per share in the third quarter of 2022, wider than the Zacks Consensus Estimate of a loss of 68 cents. Loss per share, however, narrowed year over year. Total revenues of $835.6 million missed the Zacks Consensus Estimate of $849 million but increased 60.7% year over year as air-travel demand improved. With more people preferring air-travel, Azul’s passenger revenues, contributing 93.1% to the top line, surged 69.7% year over year. Cargo and other revenues declined 4.7% year over year due to a reduction in international cargo capacity.
Cost per ASK (CASK) increased 28.8% from the third-quarter 2021 reported figure to 38.39 cents, mainly due to higher jet fuel prices. Fuel cost per liter increased 85.3% from the third-quarter 2021 level. CASK excluding fuel inched up 1.9% to 20.02 cents. Average fare surged 49.3% from the third-quarter 2021 figure. Azul exited the third quarter of 2022 with a total passenger operating fleet of 168 aircraft.
2. Copa Holdings reported third-quarter 2022 earnings (excluding 2 cents from non-recurring items) of $2.91 per share, which surpassed the Zacks Consensus Estimate of $2.63. In the year-ago quarter, CPA had reported earnings of 70 cents per share due to coronavirus-led suppressed air-travel demand at that time. Quarterly revenues of $809.4 million fell short of the Zacks Consensus Estimate of $816.2 million but surged 81.9% year over year, courtesy of the skyrocketed air-travel demand.
Copa Holdings, currently carrying a Zacks Rank #3 (Hold), expects the fourth-quarter operating margin to be 22%. CPA expects capacity to be 6.5 billion, reflecting a 6% increase from the fourth-quarter 2019 capacity. Load factor is estimated to be around 88% in the December quarter. Non-fuel unit costs are expected to be around 6 cents. Fuel price is estimated to be $3.75 per gallon. For 2023, CPA expects capacity to increase 15% from the anticipated current-year mark.
You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
3. United Airlines
reportedly anticipates transporting 5.5 million passengers during the Thanksgiving travel period. The projected passenger volume is roughly the same as the 2019 actuals (pre-coronavirus era). To meet this expected demand swell, UAL intends to operate 3,700 plus flights (on average) daily during the Nov 18-30 time frame. UAL believes that passenger volume will be the maximum on Nov 27 (the Sunday after Thanksgiving) since the start of the pandemic. More than 460,000 passengers are expected to travel on UAL flights that day. United Airlines will operate roughly 275 extra flights on the said date to meet the anticipated demand upsurge.
4. To expand its footprint in Europe, JetBlue intends to launch flights to Paris next summer. Paris will be the second transatlantic destination after London for JetBlue. JBLU started operating flights on the New York-London route in August 2021. JBLU believes that its operations on the transatlantic routes, dominated by large carriers, will help slash ticket prices by intensifying competition.
Expressing delight at JBLU’s impending flight services to Paris, the most visited city across Continental Europe, chief executive officer Robin Hayes said, “JetBlue is offering something completely unique to what you get from the big global legacy airlines on these routes – where a single high-fare joint venture operates nearly three-quarters of the flying. The response to our London service is proof that combining great service with low fares works.”
JBLU also has plans to start flights from Boston to Paris. With the Rugby world cup slated to be held in France next year apart from the 2024 Summer Olympic and Paralympic Games scheduled to be hosted by Paris, JBLU’s decision to add flights to the city sounds prudent. The routes are likely to invite significant traffic, in turn bolstering JBLU’s top line.
5. To cater to the surge in air-travel demand,
Allegiant Travel Company decided to introduce routes to Nashville early next year. ALGT intends to commence operating flights to Nashville from Provo, UT on Feb 15. One-way fare for travel on the route is as low as $59. Flights to Nashville from Akron, OH will also be operational on Feb 15. One-way fare for travel on this route is kept as low as $37. To avail this low fare, tickets have to be purchased by Nov 17, 2022, for travel by Aug 13, 2023. Performance
Even though almost all the airline stocks have traded in the red over the five trading days, the losses were muted in nature. As a result, the NYSE ARCA Airline Index has increased, albeit marginally, to $60.67 over the past five trading days. Over the past six months, the NYSE ARCA Airline Index has declined 12.2%.
What's Next in the Airline Space?
With the earnings season over, watch this space for the usual news updates.
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