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In the past week, the U.S. Federal Aviation Administration (FAA) completed the safety-related review of Southwest Airlines (LUV - Free Report) following a series of incidents involving the Dallas-based carrier's flights. The FAA review did not identify any significant safety issues.
American Airlines (AAL - Free Report) operations were briefly disrupted on Christmas Eve due to a technological glitch. Allegiant Travel Company (ALGT - Free Report) lifted its earnings per share outlook, driven primarily by healthy bookings in the post-election period and strong holiday travel demand.
1. Allegiant now anticipates its fourth-quarter 2024 capacity (measured in available seat miles) for scheduled service to increase by 1.8% on a year-over-year basis. This marks an improvement from the prior expectation of 1.5%. Total system ASM is now projected to be up 1.9% on a year-over-year basis (prior view: up 1.5%). Earnings per share (airline) are anticipated to be in the $2.50-$3.00 range (prior view: 50 cents-$1.50). Fourth-quarter consolidated EPS, excluding special items, is expected to be in the range of $1.75-$2.25. This marks an improvement from the prior expectation of breakeven to $1 per share.
2. Southwest Airlines flights were involved in a series of safety-related incidents between May and July this year. This included a LUV plane flying very low from the ground into Tampa. As a result, the FAA increased the safety oversight of LUV to ensure that the carrier complied with federal safety regulations and commenced a review in July. The FAA completed its review and gave an all-clear to LUV’s safety procedures.
3. All American Airlines flights in the United States were grounded for an hour on Dec. 24 due to a network hardware-related issue involving DXC Technology (DXC - Free Report) , one of its vendors. The disruption also resulted in some AAL flights being delayed. The technological glitch caused harassment to passengers on one of the busiest travel days. The glitch was resolved and normal operations resumed. DXC is responsible for maintaining AAL’s flight-operating systems.
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 NYSE ARCA Airline Index increased 2.5% to $68.2, as most stocks in the table above traded in the green. Over the past six months, the NYSE ARCA Airline Index has increased by 19.7%.
What’s Next in the Airline Space?
We expect updates from many carriers regarding their plans to meet the anticipated demand swell during the winter travel season.
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Airline Stock Roundup: LUV Gets FAA Clearance, AAL, ALGT in Focus
In the past week, the U.S. Federal Aviation Administration (FAA) completed the safety-related review of Southwest Airlines (LUV - Free Report) following a series of incidents involving the Dallas-based carrier's flights. The FAA review did not identify any significant safety issues.
American Airlines (AAL - Free Report) operations were briefly disrupted on Christmas Eve due to a technological glitch. Allegiant Travel Company (ALGT - Free Report) lifted its earnings per share outlook, driven primarily by healthy bookings in the post-election period and strong holiday travel demand.
Read the Last Airline Roundup here.
Recap of the Recent Most Important Stories
1. Allegiant now anticipates its fourth-quarter 2024 capacity (measured in available seat miles) for scheduled service to increase by 1.8% on a year-over-year basis. This marks an improvement from the prior expectation of 1.5%. Total system ASM is now projected to be up 1.9% on a year-over-year basis (prior view: up 1.5%). Earnings per share (airline) are anticipated to be in the $2.50-$3.00 range (prior view: 50 cents-$1.50). Fourth-quarter consolidated EPS, excluding special items, is expected to be in the range of $1.75-$2.25. This marks an improvement from the prior expectation of breakeven to $1 per share.
2. Southwest Airlines flights were involved in a series of safety-related incidents between May and July this year. This included a LUV plane flying very low from the ground into Tampa. As a result, the FAA increased the safety oversight of LUV to ensure that the carrier complied with federal safety regulations and commenced a review in July. The FAA completed its review and gave an all-clear to LUV’s safety procedures.
LUV currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
3. All American Airlines flights in the United States were grounded for an hour on Dec. 24 due to a network hardware-related issue involving DXC Technology (DXC - Free Report) , one of its vendors. The disruption also resulted in some AAL flights being delayed. The technological glitch caused harassment to passengers on one of the busiest travel days. The glitch was resolved and normal operations resumed. DXC is responsible for maintaining AAL’s flight-operating systems.
Performance
The following table shows the price movement of the major airline players over the past week and during the last six months.
The NYSE ARCA Airline Index increased 2.5% to $68.2, as most stocks in the table above traded in the green. Over the past six months, the NYSE ARCA Airline Index has increased by 19.7%.
What’s Next in the Airline Space?
We expect updates from many carriers regarding their plans to meet the anticipated demand swell during the winter travel season.