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Airline Stock Roundup: DAL's Impressive May Traffic Report, AAL, LUV in Focus

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In the past week, the likes of Delta Air Lines (DAL - Free Report) and GOL Linhas Aereas Inteligentes (GOL - Free Report) reported encouraging traffic data for May. Load factor (% of seats filled by passengers) improved as traffic growth outpaced capacity expansion in the month.

On the non-traffic front, American Airlines (AAL - Free Report) received tentative approval from the U.S. Department of Transportation (DOT) regarding its joint business with Qantas. Spirit Airlines (SAVE - Free Report) and Southwest Airlines (LUV - Free Report) also grabbed headlines by virtue of their expansion-related updates.

(Read the last Airline Stock Roundup here).

Recap of the Past Week’s Most Important Stories

1. Delta’s passenger count reached 18.1 million in May, marking a record for the month. This upside can be attributed to a surge in air travel during the Memorial Day weekend. In the May 24-27 period, the carrier was responsible for flying more than 2.1 million passengers without a single mainline cancellation. In fact, a record 666,769 passengers were transported on May 24.

Additionally, this Zacks Rank #3 (Hold) company recorded an on-time performance (mainline) of 86.7% and a completion factor (mainline) of 100%. On a year-to-date basis, Delta’s load factor increased 30 basis points to 84.4%. (Read more: Delta Air Lines Stock Up on Upbeat May Traffic Report).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2. In the event of American Airlines’ joint venture with Qantas receiving final approval from DOT, the 30-plus years of partnership between the companies will be strengthened. e joint agreement will allow American Airlinesto add routes connecting the United States with Australia and New Zealand. The company will also enjoy an expanded codeshare partnership with Qantas and optimized schedules on the trans-Pacific services while offering passengers a shorter trip time.

Moreover, American Airlines’passengers will have the privilege of wider access to Qantas’ seats, which in turn, should lower airfares. Further, the joint deal will allow American Airlines to integrate its frequent flyer program with Qantas. (Read more: American Airlines Gets Tentative DOT Nod on Deal With Qantas).

3. Southwest Airlines announced several fight services to attract customers ahead of the winter holiday season. As a result, the carrier extended its bookable flight schedule through Jan 5, 2020. This apart, the company will resume its previously operated service between Baltimore/Washington and Greenville-Spartanburg, beginning Nov 3, 2019. The route was earlier served in 2016. Southwest Airlines will also initiate a Saturday-only service between Boston and Ft. Lauderdale, starting Nov 9. (Read more: Southwest to Begin New Services for Holiday Travel).

 

4. Spirit Airlines has announced a series of domestic expansion initiatives from Nashville, TN. Notably, this Miramar, FL-based low-cost carrier will introduce year-round daily nonstop flights from Nashville International Airport to Baltimore/Washington, Fort Lauderdale, New Orleans, Las Vegas and Orlando. These operations are set to begin on Oct 10, 2019. Additionally, the carrier will launch service to Tampa from Nashville beginning Nov 5. This non-stop service will operate daily throughout the year. (Read more: Spirit Adds Several Services to Broaden Nashville Base).

5. At GOL Linhas, consolidated traffic — measured in revenue passenger kilometers (RPK) — climbed 12.5% to 3.1 billion. International RPK rose 71.9% and domestic RPK grew 7% in the month. Moreover, consolidated capacity (or available seat kilometers/ASKs) expanded 5.8% to 3.79 billion. In May, this Latin-American carrier witnessed a 9.1% increase in passenger count.

Performance

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

The table above shows that all airline stocks traded in the green over the past week leading the NYSE ARCA Airline Index gaining 2.3%. Over the course of six months, the sector tracker has depreciated 4.6%.

What's Next in the Airline Space?

Stay tuned for May traffic updates from the likes of JetBlue Airways JBLU in the coming days.

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