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In the past week, Latin American carriers,GOL Linhas , Azul (AZUL - Free Report) and Copa Holdings (CPA - Free Report) reported rosy traffic numbers for the month of September, driven by the upbeat air travel demand scenario.
Southwest Airlines (LUV - Free Report) grabbed headlines in the past week when its material specialists ratified a pay-related contract, six months before the amendable date. On a somber note, most airlines, including the likes of Delta Air Lines (DAL - Free Report) and United Airlines (UAL - Free Report) were forced to suspend direct flights to Tel Aviv following the attack by Hamas militants on Israel over the weekend.
Recap of the Past Week’s Most Important Stories
1. In September, revenue passenger miles (a measure of traffic) rose in double digits, i.e., 14.1% on a year-over-year basis at CPA. To match the demand swell, CPA is increasing its capacity. In September, available seat miles (a measure of capacity) increased 13.6% year over year. With traffic growth outpacing capacity expansion, the load factor (percentage of seats filled by passengers) improved to 87.3% from 86.9% in September 2022.
2. At GOL, the September readings for consolidated revenue passenger kilometers (a measure of traffic) and available seat kilometers (a measure of capacity) increased 6.7% and 4.7%, respectively, on a year-over-year basis. With traffic growth outpacing capacity expansion, the load factor for September 2023 improved to 83.3% from 81.7% in September 2022. The number of departures at GOL increased 11.2% year over year.
3. For the month of September, Azul’s consolidated traffic increased 10.6% year over year. To match the increased demand situation, AZUL is expanding its capacity. In the same period, capacity grew 7.4% year over year. Since traffic growth was more than capacity expansion, the load factor increased 2.3 percentage points to 79.4% last month.
4. Southwest Airlines received encouraging tidings on the labor front when its material specialists, represented by International Brotherhood of Teamsters, approved a collective bargaining contract. The deal covers LUV’s more than 480 material specialists, who oversee technical operation inventory management across the airlines network. The deal becomes amendable in April 2026.
Price Performance
The following table shows the price movement of the major airline players over the past week and during the past six months.
Image Source: Zacks Investment Research
The table above shows that most airline stocks traded in the red in the past week. As a result, the NYSE ARCA Airline Index declined 0.4% over the period to $52.67. Over the course of the past six months, the sector tracker declined 4%.
What's Next in the Airline Space?
Delta Air Lines and United Airlines are scheduled to report their third-quarter earnings numbers on Oct 12 and Oct 17, respectively. While passenger revenues are likely to have been impressive, high fuel costs are likely to have dented both DAL and UAL’s bottom-line performance in the to-be-reported quarter.
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Airline Stock Roundup: GOL, CPA & Azul's Impressive Traffic Reports, LUV's Labor Deal
In the past week, Latin American carriers,GOL Linhas , Azul (AZUL - Free Report) and Copa Holdings (CPA - Free Report) reported rosy traffic numbers for the month of September, driven by the upbeat air travel demand scenario.
Southwest Airlines (LUV - Free Report) grabbed headlines in the past week when its material specialists ratified a pay-related contract, six months before the amendable date. On a somber note, most airlines, including the likes of Delta Air Lines (DAL - Free Report) and United Airlines (UAL - Free Report) were forced to suspend direct flights to Tel Aviv following the attack by Hamas militants on Israel over the weekend.
Recap of the Past Week’s Most Important Stories
1. In September, revenue passenger miles (a measure of traffic) rose in double digits, i.e., 14.1% on a year-over-year basis at CPA. To match the demand swell, CPA is increasing its capacity. In September, available seat miles (a measure of capacity) increased 13.6% year over year. With traffic growth outpacing capacity expansion, the load factor (percentage of seats filled by passengers) improved to 87.3% from 86.9% in September 2022.
CPA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2. At GOL, the September readings for consolidated revenue passenger kilometers (a measure of traffic) and available seat kilometers (a measure of capacity) increased 6.7% and 4.7%, respectively, on a year-over-year basis. With traffic growth outpacing capacity expansion, the load factor for September 2023 improved to 83.3% from 81.7% in September 2022. The number of departures at GOL increased 11.2% year over year.
3. For the month of September, Azul’s consolidated traffic increased 10.6% year over year. To match the increased demand situation, AZUL is expanding its capacity. In the same period, capacity grew 7.4% year over year. Since traffic growth was more than capacity expansion, the load factor increased 2.3 percentage points to 79.4% last month.
A traffic update for the month of September is also available in the previous week’s write-up.
4. Southwest Airlines received encouraging tidings on the labor front when its material specialists, represented by International Brotherhood of Teamsters, approved a collective bargaining contract. The deal covers LUV’s more than 480 material specialists, who oversee technical operation inventory management across the airlines network. The deal becomes amendable in April 2026.
Price Performance
The following table shows the price movement of the major airline players over the past week and during the past six months.
Image Source: Zacks Investment Research
The table above shows that most airline stocks traded in the red in the past week. As a result, the NYSE ARCA Airline Index declined 0.4% over the period to $52.67. Over the course of the past six months, the sector tracker declined 4%.
What's Next in the Airline Space?
Delta Air Lines and United Airlines are scheduled to report their third-quarter earnings numbers on Oct 12 and Oct 17, respectively. While passenger revenues are likely to have been impressive, high fuel costs are likely to have dented both DAL and UAL’s bottom-line performance in the to-be-reported quarter.