Airline Stock Roundup: AAL & LUV Extend 737 MAX Grounding Period, AZUL In Focus
Zacks Investment Research | Nov 10, 2019 11:03PM ET
Last week, both American Airlines (NASDAQ:AAL) and Southwest Airlines (NYSE:LUV) extended the grounding period of Boeing (NYSE:BA) 737 Max jets in respective fleets. Currently, the former and the latter have 24 and 34 such jets each.
On the traffic front, Hawaiian Airlines, the wholly-owned subsidiary of Hawaiian Holdings (NASDAQ:HA) , and Azul (NYSE:AZUL) posted respective traffic numbers for October. Load factor (% of seats filled by passengers) increased at both carriers as traffic growth outpaced capacity expansion.
In terms of quarterly performance, Azul delivered better-than-expected third-quarter 2019 earnings per ADS. The bottom line also improved on a year-over-year basis, mainly owing to this Latin American carrier’s cost-control efforts apart from the decline in fuel expenses.
(Read the last Airline Stock Roundup .
4. The International Air Transport Association (IATA) announced that global travel demand (measured in revenue passenger kilometers or RPKs) for September was flat sequentially. However, the measure improved 3.8% on a year-over-year basis. Capacity (measured in available seat kilometers or ASKs) also increased 3.3% year over year. Load factor too inched up 0.4 percentage points to 81.9%. Notably, the load factor reading marked a record figure for any September.
5 International Consolidated Airlines Group (OTC:ICAGY) , the parent company of British Airways and Iberia, announced that consolidated traffic (measured in revenue passenger kilometers or RPKs) for October improved 4.8% year over year. Moreover, consolidated capacity (measured in available seat kilometers or ASKs) climbed 2.7% year over year. Load factor also improved to 85% from 83.3% a year ago as traffic growth outpaced capacity expansion. Notably, load factor expanded to 84.7% in the first 10 months of 2019 from 83.9% in the corresponding quarter of 2018.
Performance
The following table shows the price movement of major airline players over the last week and during the last six months.
The table above shows that majority of airline stocks traded in the green over the last week even though the gains were muted in nature. The NYSE ARCA Airline Index declined marginally to $110.77 in the period. Over the course of the past six months, the index has dipped almost 1%.
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What's Next in the Airline Space?
Investors will keenly await the third-quarter 2019 earnings report of Copa Holdings (NYSE:CPA) and LATAM Airlines (NYSE:LTM) on Nov 13.
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