Zacks Investment Research | May 28, 2019 08:45AM ET
In the past week, United Continental Holdings’ (NASDAQ:UAL) subsidiary United Airlines extended the grounding period of Boeing (NYSE:BA) 737 Max jets to Aug 3. Currently, the carrier has 14 such jets in its fleet. On the other hand, the Federal Aviation Administration .
3. Putting an end to years of negotiations, mechanics at Southwest Airlines voted in favor of a pay-related deal. The deal will be amenable in April 2024. Per the agreement, Southwest mechanics will receive a pay hike of 20% and bonuses worth $160 million. The terms of the latest transaction are undoubtedly favorable for Appearance Technicians, as evident from the fact that an overwhelming 95% voted in favor of the contract. On the other hand, American Airlines’ dispute with its mechanics got murkier with the carrier filing a labor-related lawsuit against its mechanics.
4. In a major management shakeup at Colombian carrier Avianca Holdings (NYSE:AVH) , its top shareholder German Efromovich will no longer have powers to control the Latin American carrier. The move, triggered by United Airlines, followed a default by Efromovich’s holding company BRW Aviation of a $456 million loan. Efromovich’s majority stake (51.5%) in Avianca was collateral for the loan made six months ago as part of a proposed joint venture. United Airlines, which is willing to loan up to $150 million to Avianca, is aiming to strengthen its foothold in Latin America.
5. In a bid to meet the surge in demand during the trans-Atlantic summer season, Delta Air Lines (NYSE:DAL) launched multiple flights to popular European destinations. To this end, the Atlanta-based airline behemoth commenced operations between Boston and Edinburgh, Boston and Lisbon apart from Tampa and Amsterdam. The flight to Amsterdam marks Delta's first nonstop trans-Atlantic operation. Since last year Delta has been operating flights connecting Amsterdam and Orlando, another Florida destination. The carrier aims to operate up to 21 daily flights to 11 destinations from Amsterdam to the United States this summer.
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 traded in the red over the past week, shortened by the Memorial Day holiday on May 27. However, the NYSE ARCA Airline Index inched up 1% in the period mainly due to GOL Linhas’ impressive gains. Over the course of six months, the sector tracker has depreciated 6.5%.
What's Next in the Airline Space?
Stay tuned for May traffic updates from the likes of Delta Air Lines in the coming days.
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