Shares of Hawaiian Holdings, Inc. (HA - Free Report) have lost 18.1% in the last three months. Though the stock significantly underperformed Zacks categorized Transportation-Airline industry’s gain of 4.63% in the period. The Zacks Rank #3 (Hold) carrier continues to thrive on the back of strong demand for air travel in Hawaii.
Hawaiian Holdings has an impressive history with respect to punctuality. Even in 2016, it was tagged the most punctual among U.S. carriers with the fewest flight cancellations to boot. Unlike most of its peers, the company is not suffering with respect to unit revenues. In fact, it was the leader in the U.S. airline industry in terms of unit revenue growth in 2016. Also, its operating revenue per available seat mile in the quarter climbed 6% year over year. Moving ahead, the metric is projected to grow in the band of 4–7% in the first quarter of 2017. Additionally, we are impressed by the carrier’s efforts to expand internationally.
In Mar 2017, the carrier received encouraging news on the labor front when its 670 pilots, represented by the Air Line Pilots Association, approved a sixty-three month pay-related deal. The new deal will be effective from Apr 1, 2017 and will extend through Jul 1, 2022. Notably, the company inked three deals with various labor groups in 2016.
Moving forward, the labor costs are bound to increase due to the above deals, thereby hurting the bottom line. But we believe that settlements with labor groups are a positive, as unrest among workers has the potential to disrupt operations.
In view of the above positives, we believe that Hawaiian Holdings stock should be retained by investors right now.
Stocks to Consider
Some better-ranked stocks in the airline space include GOL Linhas Aéreas Inteligentes S.A. (GOL - Free Report) , Deutsche Lufthansa Aktiengesellschaft and LATAM Airlines Group S.A. . While GOL Linhas sports a Zacks Rank #1 (Strong Buy), Lufthansa and LATAM Airlines Group carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of GOL Linhas, Lufthansa and LATAM Airlines Group gained 90.4%, 24.5% and 58.6%, respectively, over the last three months.
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