The first month of the current year appeared impressive for American fliers as far as punctuality is concerned. According to the Air Travel Consumer Report unveiled by the U.S. Department of Transportation for January, most U.S. carriers were more punctual in reaching their destinations compared with the year-ago figure. Moreover, the findings suggest that fliers were pleased as the number of complaints decreased during the month on a year-over-year basis.
According to the report, 79.6% flights operated by U.S. carriers touched down on time. This represents a marked improvement from the comparable figure of 76% in January 2017.
Alaska Airlines, the wholly-owned subsidiary of Alaska Air Group, Inc. (ALK - Free Report) secured the top spot with 88.9% of its flights arriving on time during January. Hawaiian Airlines, which is owned by Hawaiian Holdings, Inc. (HA - Free Report) , United Airlines, a subsidiary of United Continental Holdings, Inc. (UAL - Free Report) , and Delta Air Lines, Inc. (DAL - Free Report) were the next three most punctual companies recording on-time arrival rates of 88.3%, 84.7% and 84.3%, respectively. Notably, a total of 18 carriers were considered in the report.
However, January’s on-time arrival rate was a tad below the comparable figure of 80.3% recorded in December 2017.
Per the report, JetBlue Airways Corporation (JBLU - Free Report) emerged as the least punctual U.S. airline with only 65.8% of its flights arriving on time during the month. This low-cost carrier has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Airlines Group Inc.’s (AAL - Free Report) wholly-owned subsidiary PSA Airlines was second from below recording an on-time arrival rate of 70.2%. SkyWest, Inc.’s (SKYW - Free Report) ExpressJet Airlines occupied the third-lowest spot, recording on-time arrival rate of 74.6%.
Cancellations Rise But Complaints Decline
The findings also showed that the number of cancellations increased during January 2018. In fact, the rate of cancelled scheduled domestic flights increased to 3% from 2% and 1.2% in January and December 2017, respectively. In this regard, Hawaiian Airlines emerged as the topper, with only 0.2% of its flights being cancelled in the same month.
In the meantime, PSA Airlines was the worst performer in this respect, with 7% of its flights cancelled in January 2018. Moreover, the report stated that 12 domestic and 32 international flights had tarmac delays exceeding the permitted duration of three hours and four hours, respectively. Winter storm Grayson, which battered the East Coast in the first week of the year also contributed to the high cancellation rates.
However, the brighter aspect of the report came with respect to the significant year-over-year decrease in the number of consumer complaints related to airline service, filed with the government. Evidently, in January 2018, 1,451 complaints were filed, which represents a 12.2% decrease from the comparable figure of 1,653 a year ago.
Airlines Hurt by Multiple Cancellations in 2018
The rise in the rate of cancellations witnessed in January is likely to continue in the remaining two months of the first quarter of 2018, particularly March. In fact, in March, there were reportedly more than 10,000 flight cancellations due to successive nor’easters.
It is believed to be the worst March in five years in terms of flight cancellations. The increase in the number of flight cancellations in the first quarter resulted in significant revenue losses for airline operators.
We believe that the Zacks Airline industry's disappointing price performance in the first quarter was primarily due to weather-related disruptions and the resultant revenue losses. The industry lost 2.5% of its value in the first quarter.
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