We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In the past week, Southwest Airlines’ (LUV - Free Report) management increased its fourth-quarter 2023 guidance for fuel cost per gallon. The Dallas-based carrier reduced its growth target for capacity (measured in annual seat miles) beyond 2024. LUV was also in the news when its flight attendants voted down a tentative pay-related deal.
Copa Holdings (CPA - Free Report) reported solid traffic numbers for November on the back of upbeat air-travel demand. Another Latin American carrier, Azul’s (AZUL - Free Report) November traffic was impressive on an upbeat air-travel demand.
1. Southwest Airlines’ management expects fourth-quarter 2023 available seat miles to improve 21% from the year-ago reported figure. Economic fuel costs per gallon are expected to be $3-$3.1 (earlier expectation: $2.90-$3). LUV expects cost per available seat miles, excluding fuel, oil and profit-sharing expenses, and special items, to decrease 16-19% in the fourth quarter from the comparable period in 2022. Interest expenses are anticipated to be $65 million in the fourth quarter. LUV narrowed its anticipated revenue per available seat mile to a 9-10% decline from a 9-11% dip expected earlier.
LUV expects first-quarter 2024 capacity to increase 10-12%from first-quarter 2023 actuals. The 2024 capacity is likely to increase 6-8% from the 2023 actual. Management expects capacity beyond 2024 to grow in the low to mid-single-digit range (in percentage terms), down from the earlier stated mid-single-digit rise. The airline anticipates year-over-year trip growth beyond 2024 to be in the low-single digits.
In another development, 64% of LUV’s flight attendants voted against the proposed five-year deal pertaining to pay hikes and better working conditions. Apart from pay raises, the provisional agreement also had provisions pertaining to paid parental and maternity leave with insurance coverage. The Dallas-based carrier’s flight attendants are represented by the Transport Workers Union Local 556.
2. Driven by high passenger volumes, revenue passenger miles (a measure of traffic) increased 12.4% at Copa Holdings in November on a year-over-year basis. To match the demand swell, CPA is increasing its capacity. In November, available seat miles increased 11.9% year over year. With traffic growth outpacing capacity expansion, the load factor (percentage of seats filled by passengers) improved to 87.4% from 87.1% in November 2022. Currently, CPA carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3. In November, AZUL’s consolidated revenue passenger kilometers and available seat kilometers increased 8.2% and 8.7%, respectively, on a year-over-year basis. The load factor (the percentage of seats filled by passengers) came in at 79.2% in November 2023. On the domestic front, revenue passenger kilometers and available seat kilometers increased 1.7% and 3.3%, year over year, respectively.
4. American Airlines (AAL - Free Report) has been added to the Dow Jones Sustainability World Index. This is the first time that AAL has become part of this prestigious index. For the third consecutive year, AAL is part of the Dow Jones Sustainability North America Index. The Dow Jones Sustainability World Index comprises global sustainability leaders as identified by S&P Global through the Corporate Sustainability Assessment. The index represents the top 10% of the largest 2,500 companies in the S&P Global Broad Market Index, based on long-term economic, environmental and social criteria.
Price Performance
The following table shows the price movements 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 all airline stocks have traded in the green over the past week. Consequently, the NYSE ARCA Airline Index has improved 3.9% $66.19 over the past week. Over the course of six months, the sector tracker has declined 8%.
What's Next in the Airline Space?
Stay tuned for the usual news updates in the space.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Airline Stock Roundup: LUV Gives Bearish Q4 View, CPA Posts November Traffic
In the past week, Southwest Airlines’ (LUV - Free Report) management increased its fourth-quarter 2023 guidance for fuel cost per gallon. The Dallas-based carrier reduced its growth target for capacity (measured in annual seat miles) beyond 2024. LUV was also in the news when its flight attendants voted down a tentative pay-related deal.
Copa Holdings (CPA - Free Report) reported solid traffic numbers for November on the back of upbeat air-travel demand. Another Latin American carrier, Azul’s (AZUL - Free Report) November traffic was impressive on an upbeat air-travel demand.
Read the last Airline Roundup here.
Recap of the Past Week’s Most Important Stories
1. Southwest Airlines’ management expects fourth-quarter 2023 available seat miles to improve 21% from the year-ago reported figure. Economic fuel costs per gallon are expected to be $3-$3.1 (earlier expectation: $2.90-$3). LUV expects cost per available seat miles, excluding fuel, oil and profit-sharing expenses, and special items, to decrease 16-19% in the fourth quarter from the comparable period in 2022. Interest expenses are anticipated to be $65 million in the fourth quarter. LUV narrowed its anticipated revenue per available seat mile to a 9-10% decline from a 9-11% dip expected earlier.
LUV expects first-quarter 2024 capacity to increase 10-12%from first-quarter 2023 actuals. The 2024 capacity is likely to increase 6-8% from the 2023 actual. Management expects capacity beyond 2024 to grow in the low to mid-single-digit range (in percentage terms), down from the earlier stated mid-single-digit rise. The airline anticipates year-over-year trip growth beyond 2024 to be in the low-single digits.
In another development, 64% of LUV’s flight attendants voted against the proposed five-year deal pertaining to pay hikes and better working conditions. Apart from pay raises, the provisional agreement also had provisions pertaining to paid parental and maternity leave with insurance coverage. The Dallas-based carrier’s flight attendants are represented by the Transport Workers Union Local 556.
2. Driven by high passenger volumes, revenue passenger miles (a measure of traffic) increased 12.4% at Copa Holdings in November on a year-over-year basis. To match the demand swell, CPA is increasing its capacity. In November, available seat miles increased 11.9% year over year. With traffic growth outpacing capacity expansion, the load factor (percentage of seats filled by passengers) improved to 87.4% from 87.1% in November 2022. Currently, CPA carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3. In November, AZUL’s consolidated revenue passenger kilometers and available seat kilometers increased 8.2% and 8.7%, respectively, on a year-over-year basis. The load factor (the percentage of seats filled by passengers) came in at 79.2% in November 2023. On the domestic front, revenue passenger kilometers and available seat kilometers increased 1.7% and 3.3%, year over year, respectively.
4. American Airlines (AAL - Free Report) has been added to the Dow Jones Sustainability World Index. This is the first time that AAL has become part of this prestigious index. For the third consecutive year, AAL is part of the Dow Jones Sustainability North America Index. The Dow Jones Sustainability World Index comprises global sustainability leaders as identified by S&P Global through the Corporate Sustainability Assessment. The index represents the top 10% of the largest 2,500 companies in the S&P Global Broad Market Index, based on long-term economic, environmental and social criteria.
Price Performance
The following table shows the price movements 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 all airline stocks have traded in the green over the past week. Consequently, the NYSE ARCA Airline Index has improved 3.9% $66.19 over the past week. Over the course of six months, the sector tracker has declined 8%.
What's Next in the Airline Space?
Stay tuned for the usual news updates in the space.