Airline Stock Roundup: Earnings Beat At JBLU, AAL-Qantas Deal & More

 | Jul 23, 2019 09:34PM ET

In the past week, JetBlue Airways (NASDAQ:JBLU) reported better-than-expected earnings and revenues in the second quarter of 2019. Both the metrics also improved year over year. Results were aided by lower fuel costs and a healthy uptick in passenger revenues that accounted for the bulk of the company’s top line.

On the non-earnings front, American Airlines’ (NASDAQ:AAL) efforts to strengthen its foothold in the Oceania region received a boost when the U.S. Department of Transportation (DOT) finally approved its joint venture with Australia’s leading carrier — Qantas Airways.

Moreover, Alaska Airlines — the wholly owned subsidiary of Alaska Air Group (NYSE:ALK) — featured in the headlines when its aircraft technicians ratified the Transition Agreement pertaining to the Virgin America merger. Notably, Alaska Air acquired Virgin America in 2016.

(Read the last Airline Stock Roundup .

2. American Airlines’ joint venture with Qantas, which failed to secure DOT’s approval in 2016, finally achieved it this time. The joint venture, which has become effective following the approval, strengthens the carriers’ 30-plus years of partnership by fostering air travel between the United States and Australia as well as New Zealand. Due to the approval, American Airlines will enjoy an expanded codeshare partnership with Qantas and optimized schedules on the trans-Pacific services while reducing the trip time. Notably, fellow-U.S. airline players like Delta Air Lines (NYSE:DAL) and United Airlines (NASDAQ:UAL) already have agreements with carriers in the Oceania region. While Delta has a partnership with Virgin Australia, United Airlines has teamed up with Air New Zealand.

3. The integration process in the Alaska Airlines-Virgin America merger received a boost when the Seattle, WA-based carrier’s 900 Airbus and Boeing (NYSE:BA) aircraft technicians ratified a final Transition Agreement. The ratification of the agreement, which includes wage hikes, retirement benefits and other favorable features, combines the Boeing and Airbus technicians into a single group. The technicians are represented by the Aircraft Mechanics Fraternal Association.

4. Azul (NYSE:AZUL) stated that credit rating agency Fitch Ratings assigned a credit rating of BB- on a foreign currency scale to the carrier. Moreover, the agency bestowed a national rating of A+ to Brazil’s largest carrier in terms of the number of cities served and flight departures. Additionally, the carrier’s $400 million unsecured notes due 2024 were assigned a BB-rating by Fitch. The outlook is stable. The ratings are reflective of Azul's improved credit risk profile during 2019-2020.

5. Southwest Airlines (NYSE:LUV) , which has the largest exposure to Boeing 737 MAX jets among U.S. carriers with 34 such jets in its fleet, announced that it was freezing the hiring of new pilots. This was because of its decision to remove Boeing 737 MAX jets from its schedule until Nov 2. As a result, the carrier will have to cancel approximately 180 flights daily. Some other U.S. carriers like American Airlines and United Airlines too have grounded Boeing 737 MAX jets in their fleets through early November.

Price Performance

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