We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In the past week, Delta Air Lines (DAL - Free Report) gave a solid presentation at its Investor Day. For 2020, this Atlanta-GA based carrier anticipates earnings per share in the $6.75-$7.75 range. The mid-point ($7.25) of the guided range lies above the Zacks Consensus Estimate of $6.98. Additionally, the airline predicts revenues of $49 billion for 2020, indicating a 4-6% improvement year over year. The company’s free cash flow target stands at $4 billion for the next year.
American Airlines (AAL - Free Report) and Southwest Airlines (LUV - Free Report) also hit the headlines. Both the companies extended the grounding period of Boeing 737 Max jets in their respective fleets. Currently, American Airlines and Southwest Airlines have 24 and 34 such jets in their respective fleets. Additionally, the likes of JetBlue Airways (JBLU - Free Report) , Copa Holdings (CPA - Free Report) and Alaska Air Group (ALK - Free Report) unveiled the respective November traffic reports in the past week.
Moreover, JetBlue issued a tepid outlook on revenue per available seat mile (RASM; a key measure of unit revenues) for the December quarter due to softer-than-expected close-in yields in late November and inclement weather during the peak Thanksgiving holiday.
1. Delta expects revenues of $47 billion for 2019, implying a 7% rise year over year. For the same year, earnings are estimated in the range of $6.75-$7.25 per share, hinting at an increase from $5.65 last year. Current-year free cash flow is projected to be approximately $4 billion. Moreover, Delta’s subsidiary Delta Private Jets has entered into a long-term partnership with Wheels Up — a private aviation company. The agreement is expected to create one of the world’s largest fleet of private jets with 200 planes. (Read more: Delta Up 3% on Bullish 2020 Outlook, Partners With Wheels Up)
2. American Airlines has extended the grounding period of its Boeing 737 MAX jets through Apr 7, 2020, from the previous expectation of Mar 4. Following the extension of the grounding period, American Airlines is expected to cancel approximately 140 flights per day through Apr 6, 2020. (Read more: American Airlines Suspends Boeing 737 MAX Flights Until April)
Southwest Airlines too extended the grounding period of its Boeing 737 MAX jets by more than a month through Apr 13, 2020. With the carrier’s most fuel-efficient aircraft being grounded, fuel efficiency is estimated to dip 1-2% in the December quarter, detailed results of which are scheduled to be released on Jan 23, 2020. Moreover, the carrier, which has cancelled approximately 3,000 flights so far in the December quarter mainly due to inclement weather, now expects fourth-quarter available seat miles (a measure of capacity) to decrease approximately 1% year over year compared with its previous expectation of a decline between 0.5 and 1%. The flight cancellations due to bad weather are, however, not expected to impact the carrier’s fourth-quarter results significantly.
3. At JetBlue, traffic — measured in revenue passenger miles (RPMs) — increased 3.7% year over year to 4.26 billion. Consolidated capacity (measured in available seat miles/ASMs) expanded 7.1% to 5.27 billion on a year-over-year basis. Load factor (% of seats filled by passengers) declined 270 basis points to 80.8% as capacity expansion outweighed traffic growth. The company now anticipates fourth-quarter 2019 RASM to decline between 1.5% and 3.5% (the earlier guidance had predicted a decline in the 0.5-3.5% band).
4. At Alaska Air Group, consolidated traffic decreased 1.2% to 4.39 billion. On a year-over-year basis, consolidated capacity rose 2.3% to 5.4 billion. With traffic declining and capacity increasing, load factor deteriorated 290 basis points to 81.2%. The carrier expects fourth-quarter non-fuel unit costs (excluding special items) to rise 0.5% year over year. (Read more: Alaska Air Group's Traffic & Load Factor Dips in November)
5. At Copa Holdings, consolidated traffic for November slipped 1.5% to 1.7 billion. Moreover, consolidated capacity dipped 2.9% year over year to 1.99 billion. This fall in capacity and the resultant decrease in traffic can be attributed to reduced capacity on account of the extended grounding of the Boeing 737 MAX jets.(Read more: Copa Holdings' Traffic & Capacity Fall in November)
Performance
The following table shows the price movement of the major airline players over the past week and during the past six months.
The table above shows that all airline stocks, barring Southwest Airlines, traded in the green in the past week. Consequently, the NYSE ARCA Airline Index increased 3.4% to $111.77 in the period. Over the course of six months, the index appreciated 8.7%.
What's Next in the Airline Space?
Stay tuned for the usual news updates in this space.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.6% per year. So be sure to give these hand-picked 7 your immediate attention.
Image: Bigstock
Airline Stock Roundup: DAL's Investor Day, AAL & LUV's 737 MAX Grounding Updates
In the past week, Delta Air Lines (DAL - Free Report) gave a solid presentation at its Investor Day. For 2020, this Atlanta-GA based carrier anticipates earnings per share in the $6.75-$7.75 range. The mid-point ($7.25) of the guided range lies above the Zacks Consensus Estimate of $6.98. Additionally, the airline predicts revenues of $49 billion for 2020, indicating a 4-6% improvement year over year. The company’s free cash flow target stands at $4 billion for the next year.
American Airlines (AAL - Free Report) and Southwest Airlines (LUV - Free Report) also hit the headlines. Both the companies extended the grounding period of Boeing 737 Max jets in their respective fleets. Currently, American Airlines and Southwest Airlines have 24 and 34 such jets in their respective fleets. Additionally, the likes of JetBlue Airways (JBLU - Free Report) , Copa Holdings (CPA - Free Report) and Alaska Air Group (ALK - Free Report) unveiled the respective November traffic reports in the past week.
Moreover, JetBlue issued a tepid outlook on revenue per available seat mile (RASM; a key measure of unit revenues) for the December quarter due to softer-than-expected close-in yields in late November and inclement weather during the peak Thanksgiving holiday.
(Read the last Airline Stock Roundup here)
Recap of the Past Week’s Most Important Stories
1. Delta expects revenues of $47 billion for 2019, implying a 7% rise year over year. For the same year, earnings are estimated in the range of $6.75-$7.25 per share, hinting at an increase from $5.65 last year. Current-year free cash flow is projected to be approximately $4 billion. Moreover, Delta’s subsidiary Delta Private Jets has entered into a long-term partnership with Wheels Up — a private aviation company. The agreement is expected to create one of the world’s largest fleet of private jets with 200 planes. (Read more: Delta Up 3% on Bullish 2020 Outlook, Partners With Wheels Up)
2. American Airlines has extended the grounding period of its Boeing 737 MAX jets through Apr 7, 2020, from the previous expectation of Mar 4. Following the extension of the grounding period, American Airlines is expected to cancel approximately 140 flights per day through Apr 6, 2020. (Read more: American Airlines Suspends Boeing 737 MAX Flights Until April)
Southwest Airlines too extended the grounding period of its Boeing 737 MAX jets by more than a month through Apr 13, 2020. With the carrier’s most fuel-efficient aircraft being grounded, fuel efficiency is estimated to dip 1-2% in the December quarter, detailed results of which are scheduled to be released on Jan 23, 2020. Moreover, the carrier, which has cancelled approximately 3,000 flights so far in the December quarter mainly due to inclement weather, now expects fourth-quarter available seat miles (a measure of capacity) to decrease approximately 1% year over year compared with its previous expectation of a decline between 0.5 and 1%. The flight cancellations due to bad weather are, however, not expected to impact the carrier’s fourth-quarter results significantly.
Southwest Airlines carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3. At JetBlue, traffic — measured in revenue passenger miles (RPMs) — increased 3.7% year over year to 4.26 billion. Consolidated capacity (measured in available seat miles/ASMs) expanded 7.1% to 5.27 billion on a year-over-year basis. Load factor (% of seats filled by passengers) declined 270 basis points to 80.8% as capacity expansion outweighed traffic growth. The company now anticipates fourth-quarter 2019 RASM to decline between 1.5% and 3.5% (the earlier guidance had predicted a decline in the 0.5-3.5% band).
4. At Alaska Air Group, consolidated traffic decreased 1.2% to 4.39 billion. On a year-over-year basis, consolidated capacity rose 2.3% to 5.4 billion. With traffic declining and capacity increasing, load factor deteriorated 290 basis points to 81.2%. The carrier expects fourth-quarter non-fuel unit costs (excluding special items) to rise 0.5% year over year. (Read more: Alaska Air Group's Traffic & Load Factor Dips in November)
5. At Copa Holdings, consolidated traffic for November slipped 1.5% to 1.7 billion. Moreover, consolidated capacity dipped 2.9% year over year to 1.99 billion. This fall in capacity and the resultant decrease in traffic can be attributed to reduced capacity on account of the extended grounding of the Boeing 737 MAX jets.(Read more: Copa Holdings' Traffic & Capacity Fall in November)
Performance
The following table shows the price movement of the major airline players over the past week and during the past six months.
The table above shows that all airline stocks, barring Southwest Airlines, traded in the green in the past week. Consequently, the NYSE ARCA Airline Index increased 3.4% to $111.77 in the period. Over the course of six months, the index appreciated 8.7%.
What's Next in the Airline Space?
Stay tuned for the usual news updates in this space.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.6% per year. So be sure to give these hand-picked 7 your immediate attention.
See 7 handpicked stocks now >>