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Airline Stock Roundup: UAL Hikes Luggage Charge, RYAAY Trims FY25 Traffic Forecast

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In the past week, United Airlines (UAL - Free Report) jumped on the bandwagon of raising the price to check luggage.  Ryanair Holdings (RYAAY - Free Report) expects its traffic during the busy summer season to be hurt by the limited availability of planes. As a result, the European carrier trimmed its traffic forecast for fiscal 2025. Allegiant Travel (ALGT - Free Report) reported disappointing traffic data for January, reflecting the slowdown in domestic air travel demand.

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1. United Airlineshas joined its rivals in increasing its baggage fees. This Chicago-based carrier announced that economy class passengers traveling on domestic UAL flights will now pay an additional $5, raising the cost for their first checked bag to $40. The fee for a second checked bag will increase to $45 if paid online and to $50 at the airport. A discussionon hiking checked bag fees by American Airlines (AAL - Free Report) is available in the previous week’s write-up.

UAL 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 Allegiant, scheduled traffic (measured in revenue passenger miles) fell 2.3% in January 2024 from the January 2023 reading. Capacity (measured in available seat miles) for scheduled service improved 0.6% from the year-ago reading. The load factor (percentage of seats filled by passengers) in January 2024 was 80.7%. Total departures (scheduled services) fell 0.8% in January 2024 from the year-ago level.

3. Ryanair’s CEO Michael O’Leary warned that the budget carrier might have to raise airfares by up to 10% this summer compared with the same period last year. RYAAY passengers are likely to pay more for air travel this summer due to the non-availability of planes. As a result of the delivery delays, RYAAY trimmed its fiscal 2025 traffic forecast. The carrier now expects to carry 198-200 million passengers in fiscal 2025 versus the 205 million previously forecast.

4. According to a Reuters report, Air Canada (ACDVF - Free Report) intends to resume flights to Israel in April. We note that the carrier had canceled flights to Tel Aviv following the Oct 7, 2023, attacks by Hamas militants on southern Israel.


The following table shows the price movement of the major airline players over the past week and during the last six months.

Zacks Investment Research
Image Source: Zacks Investment Research

The table above shows that airline stocks exhibited a mixed trend with respect to price over the past week. The NYSE ARCA Airline Index was almost flat at $64.79. Over the course of the past six months, the NYSE ARCA Airline Index has gained 3.3%.

What’s Next in the Airline Space?

Stay tuned for further news updates in the space.


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