In the past week, sector heavyweights like United Airlines (UAL Quick QuoteUAL - Free Report) , American Airlines (AAL Quick QuoteAAL - Free Report) , Alaska Air Group (ALK Quick QuoteALK - Free Report) and Southwest Airlines (LUV Quick QuoteLUV - Free Report) reported fourth-quarter 2023 earnings. While air travel demand was upbeat, high costs hurt results.

Meanwhile, Allegiant Travel Company (ALGT Quick QuoteALGT - Free Report) reported year-over-year decreases in traffic and capacity for December 2023.

Read the last Airline Roundup here.

Recap of the Recent Most Important Stories

1 American Airlines’ fourth-quarter 2023 earnings (excluding 26 cents from non-recurring items) of 29 cents per share easily beat the Zacks Consensus Estimate of 6 cents. In the year-ago quarter, AAL reported earnings of $1.17. Operating revenues of $13.06 billion decreased 1% year over year. The top line beat the Zacks Consensus Estimate of $13.02 billion.

Management expects first-quarter 2024 total revenue per available seat miles between 3.5% and 5.5%, suggesting a decline from the first-quarter 2023 actual. AAL projects the March-end quarter's loss per share (excluding net special items) to be 15-35 cents. System capacity for the March-end quarter is estimated to increase 6.5-8.5% from the first-quarter 2023 actuals.

2. Southwest Airlines reported fourth-quarter 2023 earnings per share of 37 cents, which outpaced the Zacks Consensus Estimate of 11 cents. In the year-ago quarter, LUV incurred a loss of 38 cents per share. Revenues of $6.82 billion outpaced the Zacks Consensus Estimate of $6.74 billion and improved 10.5% year over year. The uptick was due to healthy leisure demand and continued yield strength. For the first quarter of 2024, available seat miles are estimated to improve 10% from the year-ago reported figure. Economic fuel price per gallon is expected  between $2.70 and $2.80.

LUV currently sports a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy ) stocks here.

3. Alaska Air reported fourth-quarter 2023 earnings per share of 30 cents, which beat the Zacks Consensus Estimate of 18 cents but declined 67.4% year over year. Operating revenues of $2.55 billion beat the Zacks Consensus Estimate of $2.54 billion. ALK anticipates  2024 adjusted earnings per share between $3 and $5.

4. United Airlines reported fourth-quarter 2023 earnings per share (excluding 19 cents from non-recurring items) of $2, which outpaced the Zacks Consensus Estimate of $1.61 but declined 18.7% year over year. Operating revenues of $13.63 billion beat the Zacks Consensus Estimate of $13.55 billion. The top line increased 9.9% year over year due to upbeat air-travel demand. This was driven by a 10.9% rise in passenger revenues.

5. In December, Allegiant’s scheduled traffic (measured in revenue passenger miles) declined 6.5% from December 2022. Capacity (measured in available seat miles) for scheduled service fell 4.4% from the December 2022 reading. Load factor (percentage of seats filled by passengers) in December 2023 reached 82.5%. Total departures (scheduled services) fell 53% in December 2023 from a year ago. For the total system (including scheduled service and fixed fee contract), Allegiant carried 6.3% fewer passengers in December 2023 than the year-ago period.

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 have traded in the green over the past week, resulting in the NYSE ARCA Airline Index growing 2.4% to $62.43. Over the course of the past six months, the NYSE ARCA Airline Index has depreciated 15.6%.

What’s Next in the Airline Space?

Fourth-quarter 2023 earnings report from few other airlines should be out in the coming days.