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In the past week, American Airlines (AAL - Free Report) called off its long-standing association with Mesa Air Group (MESA - Free Report) mainly due to the pilot shortage gripping U.S. airlines. Air-travel demand is, however, buoyant in the United States, following the relaxation of COVID-related restrictions. Owing to this upbeat demand scenario, Allegiant Travel Company (ALGT - Free Report) carried 8.4% more passengers in November 2022 than the November 2019 (pre-coronavirus) actuals.
Meanwhile, Southwest Airlines (LUV - Free Report) received encouraging tidings on the labor front when the union, International Association of Machinists and Aerospace Workers (IAM), covering its customer service employees ratified a pay-related deal.
1Mesa Air will stop flying American Airlines’ flights from Apr 3, 2023. AAL currently carries a Zacks Rank #3 (Hold). Derek Kerr, American Airlines’ CFO, stated, “As a result, we have concerns about Mesa’s ability to be a reliable partner for American going forward. American and Mesa agree the best way to address these concerns is to wind down our agreement.” Following the termination of the AAL deal, Mesa Air has decided to collaborate with United Airlines (UAL - Free Report) . Accordingly, Mesa Air will shift its operations from AAL to UAL from March 2023.
2. At Allegiant Air, the load factor (percentage of seats filled by passengers) increased 5.6 points to 86% in November 2022 as the traffic increase was more than the capacity expansion. However, departures declined 1.3% from the November 2019 actuals. In November 2022, Allegiant carried 8.2% more passengers (system-wide) than in November 2019. Capacity increased 6.9% from the three-year-ago comparable month’s reading.
Departures (system-wide) declined 0.7% from the November 2019 actuals. On a year-over-year basis, departures declined 9.4% and 8.1%, respectively, for scheduled service and total system.
4. United Airlines announced that it is looking forward to restarting flights to two popular Asian destinations — Osaka and Hong Kong — from San Francisco International Airport. Both routes are expected to be operational by the beginning of 2023. These flights are the ones that got suspended during the COVID-19 pandemic. United Airlines is resuming its non-stop flight to Osaka on Jan 5, 2023. UAL plans to fly from SFO to Osaka three times every week.
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 most airline stocks traded in the red over the past week. The NYSE ARCA Airline Index inched down 2% to $54.21 over the past week. Over the course of the past six months, the NYSE ARCA Airline Index has declined 3.6%.
What's Next in the Airline Space?
Stay tuned for the usual updates in the space.
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Airline Stock Roundup: AAL Ends Mesa Collaboration, ALGT, LUV in Focus
In the past week, American Airlines (AAL - Free Report) called off its long-standing association with Mesa Air Group (MESA - Free Report) mainly due to the pilot shortage gripping U.S. airlines. Air-travel demand is, however, buoyant in the United States, following the relaxation of COVID-related restrictions. Owing to this upbeat demand scenario, Allegiant Travel Company (ALGT - Free Report) carried 8.4% more passengers in November 2022 than the November 2019 (pre-coronavirus) actuals.
Meanwhile, Southwest Airlines (LUV - Free Report) received encouraging tidings on the labor front when the union, International Association of Machinists and Aerospace Workers (IAM), covering its customer service employees ratified a pay-related deal.
Read the last Airline Roundup here.
Recap of the Latest Top Stories
1Mesa Air will stop flying American Airlines’ flights from Apr 3, 2023. AAL currently carries a Zacks Rank #3 (Hold). Derek Kerr, American Airlines’ CFO, stated, “As a result, we have concerns about Mesa’s ability to be a reliable partner for American going forward. American and Mesa agree the best way to address these concerns is to wind down our agreement.” Following the termination of the AAL deal, Mesa Air has decided to collaborate with United Airlines (UAL - Free Report) . Accordingly, Mesa Air will shift its operations from AAL to UAL from March 2023.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
2. At Allegiant Air, the load factor (percentage of seats filled by passengers) increased 5.6 points to 86% in November 2022 as the traffic increase was more than the capacity expansion. However, departures declined 1.3% from the November 2019 actuals. In November 2022, Allegiant carried 8.2% more passengers (system-wide) than in November 2019. Capacity increased 6.9% from the three-year-ago comparable month’s reading.
Departures (system-wide) declined 0.7% from the November 2019 actuals. On a year-over-year basis, departures declined 9.4% and 8.1%, respectively, for scheduled service and total system.
3. Following the ratification of this five-year deal, customer service employees at LUV get an immediate 13.1% wage hike from the current levels. Moreover, they are eligible for a 25.1% general pay hike over the next four years. In addition to the pay hikes, the ratification ensures other benefits like better work-life balance, more bonuses and over-time wage improvements for part-time employees.
4. United Airlines announced that it is looking forward to restarting flights to two popular Asian destinations — Osaka and Hong Kong — from San Francisco International Airport. Both routes are expected to be operational by the beginning of 2023. These flights are the ones that got suspended during the COVID-19 pandemic. United Airlines is resuming its non-stop flight to Osaka on Jan 5, 2023. UAL plans to fly from SFO to Osaka three times every week.
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 most airline stocks traded in the red over the past week. The NYSE ARCA Airline Index inched down 2% to $54.21 over the past week. Over the course of the past six months, the NYSE ARCA Airline Index has declined 3.6%.
What's Next in the Airline Space?
Stay tuned for the usual updates in the space.