Back to top

Image: Bigstock

Airline Stock Roundup: Scott Kirby to be UAL's Next CEO, RYAAY, GOL in Focus

Read MoreHide Full Article

In the past week, United Airlines Holdings UAL grabbed headlines following the news that Scott Kirby will take over as chief executive officer (CEO) of the company, replacing incumbent Oscar Munoz next year. Notably, Kirby has been serving United Airlines as its president since 2016. He had joined this Chicago-based company from another airline heavyweight — American Airlines Group AAL.

Furthermore, European low-cost carrier Ryanair Holdings (RYAAY - Free Report) slashed its summer 2020 traffic growth forecast on account of delivery delays pertaining to Boeing 737 MAX jets. On the traffic front, Latin American carriers — Gol Linhas Aereas Inteligentes GOL and Azul AZUL — reported a decline in their respective load factors (% of seats filled by passengers) for November as traffic growth was outpaced by capacity expansion.

(Read the last Airline Stock Roundup here)

Recap of Past Week’s Most Important Stories

1. Following United Airlines’ Annual Meeting of Shareholders to be held on May 20, 2020, Scott Kirby will take charge as the carrier’s CEO. From May 20, 2020, the current CEO Oscar Munoz will serve as the executive chairman of the company’s board of directors for a year. Also, United Airlines’ chairman, Jane Garvey, will retire in May next year. Additionally, Ted Philip, who currently chairs the Nominating/Governance Committee, will take charge as the lead independent director on May 20. (Read more: Scott Kirby to Take Over as United Airlines' CEO in 2020)

2. As the Boeing 737 MAX jets have been grounded since March 2019, Ryanair has received only 10 such planes instead of the initial plan of 20. Consequently, this Zacks Rank #2 (Buy) Irish airline company now expects passenger growth of 156 million for fiscal 2021 (ending Mar 31, 2021) compared with 157 million anticipated previously. Further, the carrier plans to close two bases in Nuremberg and Stockholm Skavsta due to the unavailability of this aircraft. Ryanair is currently in talks with its staff, unions and “affected airports” to decide on summer capacity cuts at a few other bases as well. (Read more: Ryanair Trims Summer 2020 Growth View Due to Delivery Delays)

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

3. At GOL Linhas, traffic, measured in revenue passenger kilometers (RPK), climbed 3.8% to 3.4 billion in November. While international RPK declined 13.2%, domestic RPK grew 6.3% in the month. On a year-over-year basis, consolidated capacity (measured in available seat kilometers/ASKs) was up 6.4% to 4.21 billion, primarily on 8.9% expansion in domestic capacity. Moreover, the carrier witnessed an 8.3% increase in passenger count during November. (Read more: Gol Linhas' November Traffic Rises, Load Factor Declines)

4. At Azul, consolidated traffic increased 30.6% year over year owing to strong demand for air travel. Traffic increased 30.4% and 31.4% in domestic and international markets, respectively. Consolidated capacity expanded 32.5% on a year-over-year basis. The increase in domestic capacity was 30.9%. On the international front, capacity rose 38.3%. (Read more: Azul's Traffic Rises But Load Factor Declines in November).

5. At Hawaiian Airlines, the wholly-owned subsidiary of Hawaiian Holdings (HA), November traffic increased 4.1% year over year. Meanwhile, capacity expanded 3.6%. Additionally, load factor improved 50 basis points (bps) to 84.6% as traffic growth outpaced capacity expansion. The carrier transported more than 912,000 passengers in November. However, the November passenger count declined 2.7% year over year. During the first 11 months of 2019, load factor improved 120 basis points to 86.6%. Passenger count declined 1% year over year in the January-November period.


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 the majority of the airline stocks traded in the green during the past week. As a result, the NYSE ARCA Airline Index increased 1.7% to $109.15 in the period. Over the course of six months, the Index appreciated 11%.

What's Next in the Airline Space?

Investors will look forward to November traffic reports from the likes of Copa Holdings CPA in the coming days. Updates from Delta Air Lines’ DAL Investor Day, scheduled to be held on Dec 12, 2019, will also been keenly awaited.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.

This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.

See their latest picks free >>


In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Ryanair Holdings PLC (RYAAY) - free report >>