Airline Stock Roundup: LUV's Delta Variant-Led Warning, CPA's July Traffic & More

In the past week, Southwest Airlines’ DAL also grabbed headlines in the past week by announcing that it intends to resume flying to London from Seattle and Detroit this October onward. The move is part of the Atlanta, GA-based carrier’s efforts to rebuild its international network.

Recap of the Past Week’s Most Important Stories

1.In a regulatory filing, Southwest Airlines (NYSE:LUV) presented a grim picture with respect to close-in bookings and cancellations for the current month as the rapid spread of the Delta variant is hurting air-travel demand big time. As a result of this deadly strain, the presently Zacks Rank #3 (Hold) Dallas-based carrier, which was profitable in July, now expects its August 2021 operating revenues to decline in the 15-20% band from the August 2019 actuals. The current estimation is worse than the previous outlook of a 12-17% decline, which was issued last month. Assuming the current trend to continue at least in the near term, Southwest Airlines expects operating revenues for the month of September and third-quarter 2021 to decline in the 15-25% and 15-20% ranges, respectively, from the levels achieved in the comparable period of 2019. Load factor (% of seats filled by passengers) is likely to be between 80% and 85% compared with the third-quarter 2019 actuals. Third-quarter capacity is anticipated to be comparable to third-quarter 2019 actuals. The company continues to expect its non-fuel unit costs for the September quarter to increase in the 1-5% range from the third-quarter 2019 reading. The airline still estimates economic fuel costs per gallon in the range of $2.05-$2.15 for the September quarter.

You can see previous week’s write up .

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 most airline stocks have traded in the green in the past week even though the gains were muted in nature. Evidently, the NYSE ARCA Airline Index has inched up 1% to $94.49 in the said period. Over the course of the past six months, the NYSE ARCA Airline Index has been flat

What's Next in the Airline Space?

With the Delta variant denting air-travel demand, we expect more U.S. carriers to follow Southwest Airlines and adjust their views for the September quarter.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix (NASDAQ:NFLX) did to Blockbuster and Amazon (NASDAQ:AMZN) did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Zacks Investment Research

Written By: Zacks Investment Research