Yesterday, 10:29 AM
- Airline stocks are showing some strength in early trading as investors shrug off another uptick in oil prices.
- Solid traffic reports from United Continental and American Airlines Group are turning attention back to the robust profits being churned up in the sector.
- United raised its Q3 profit forecast, while American saw a big jump in its load factor for September in a positive sign and gave its own favorable estimate on margins.
- Gainers: United Continental (UAL +7.1%), American Airlines Group (AAL +4.4%), Delta Air Lines (DAL +2.5%), Hawaiian Holdings (HA +3.9%), Southwest Airlines (LUV +2.6%), Spirit Airlines (SAVE +4.7%), Virgin America (VA +3%), Allegiant Travel (ALGT +3.1%), Alaska Air Group (ALK +1.8%), JetBlue (JBLU +4.9%).
- Related ETF: JETS.
Yesterday, 8:14 AM
- American Airlines Group (NASDAQ:AAL) discloses revenue passenger miles rose 7.2% to 18.1B in September. International RPMs were up 8.8% during the month.
- Capacity was 3.7% higher to 21.855B available seat miles, as a double-digit gain in Pacific route capacity factored in.
- American's load factor for September was up 270 bps Y/Y to 82.7% and is +50 bps YTD to 83.1%.
- The company says Q3 passenger revenue per available seat mile is expected to be down 6% to 8%. This drop, due in part to lower fares, will be offset by lower fuel costs. American sees Q3 pretax margin of 17% to 18%.
- AAL +0.65% premarket to $40.00.
Thu, Oct. 8, 11:31 AM
- Credit Suisse is prepping for the airlines earnings season.
- The investment firm recommends holding Southwest Airlines (LUV -0.5%), Delta Air Lines (DAL -0.7%), and United Continental (UAL -0.5%) ahead of their Q3 prints.
- A neutral stance is taken by CS on American Airlines Group (AAL -0.2%) and Spirit Airlines (SAVE -0.2%).
- What to watch: Q3 reports are expected to mark a bottom in unit revenue as booking catch up to capacity increases and costs decline. Many of the comparables for companies will become easier heading into Q4. Also of importance, earnings calls should help clear up some visibility on carriers' 2016 plans.
Fri, Oct. 2, 10:24 AM
- Airline stocks are weaker than broad market averages on heightened concerns of a weak U.S. economy and in reaction to guidance from Delta.
- The slide in the sector comes even with crude oil dropping back below $45.
- In a new SEC filing, Delta says it sees Q3 operating margin of 20% to 21% and passenger unit revenue growth of -4.5% to -5.5%.
- Leading decliners in the sector in early trading are Delta Air Lines (DAL -3.5%), JetBlue Airways (JBLU -3%), Hawaiian Holdings (HA -3.7%), and American Airlines Group (AAL -2.9%).
Wed, Sep. 30, 8:37 AM
- Goldman Sachs downgrades American Airlines Group (NASDAQ:AAL) to a Neutral rating after having the airline stock set at Buy. A majority of Wall Street firms still have a bullish view on AAL.
- Shares of American Airlines Group are only up 9.1% over the last year despite the eye-popping reduction in fuel expenses. On some valuation comparisons, the company trades cheaper than peers.
Tue, Sep. 22, 11:08 AM| Tue, Sep. 22, 11:08 AM | 2 Comments
Sat, Sep. 19, 10:55 AM
- American Airlines Group (NASDAQ:AAL) is paying down debt at a cautious pace because it believes it can earn provide shareholders with better returns than the sub-4% rates it pays out on current borrowings.
- CEO Doug Parker isn't quite as concerned with debt-to-equity ratios or being leveraged as some of his peers hoping to land credit ratings agency upgrades. "We should continue to borrow irrespective of what that may do to some ratio," said the unflinching exec.
- During American's last earnings conference call, Parker noted the math on paying off debt doesn't change even if the Fed were to raise rates a few times (transcript). Of course, American is refinancing existing debt at lower rates when it can.
- American recorded a liquidity balance of $11.5B billion (including $629M held in Venezuelan currency) at the end of Q2. The ample cash position is needed by the company to guard against merger integration costs, but also puts it in a nice position to reward shareholders down the line.
- Price-to-cash ratios of major U.S. carriers: American 3.28, United 4.57, Southwest 8.31, JetBlue 9.26, Delta 9.8 (source: Finviz.com).
Fri, Sep. 18, 9:35 AM
- The U.S. government issues more regulations to open up business with Cuba.
- The rules will allow more travel, corporate expansion, and make it easier for companies to set up new operations in the nation.
- Many of the new measures go into effect on Monday.
- Companies with a potential interest in Cuba: RCL, CCL, JBLU, MA, V, OWW, AAL, NCLH, PEP.
- Related closed-end fund: CUBA.
Thu, Sep. 17, 2:07 PM
- The FAA confirms American Airlines Group (AAL +1.8%) requested a ground stop for all AA traffic in and out of Miami International Airport, Chicago O'Hare International Airport, and Dallas/Ft. Worth International Airport.
- A computer issue was cited by the federal agency as the reason. The ground stop is expected to be pulled later afternoon.
- Flightaware.com lists over 300 delays for AA flights.
Thu, Sep. 17, 1:14 PM
Wed, Sep. 16, 9:38 AM
- Airline fares fell 3.1% M/M in August to follow up on a 5.6% decline in July, according to the Bureau of Labor Statistics.
- The average fare was 6.0% lower than the level from a year ago on an unadjusted basis.
- The drop in fares was expected with jet fuel prices dramatically lower. In some cases, carriers are spending 30% to 45% less on fuel per mile compared to a year ago.
- Related stocks: LUV, UAL, DAL, AAL, JBLU, ALK, HA, SAVE, ALGT, RJET, VA, SKYW.
- Related ETF: JETS.
- BLS CPI data
Fri, Sep. 11, 10:33 AM
- Hedging fuel costs in the airline industry is a complex exercise, notes CAPA.
- CAPA has a breakdown of how the average fuel costs at majors Delta Air Lines (DAL +0.1%), American Airlines Group (AAL +1%), and United Continental (UAL -0.1%) compare over the first two quarters and to the previous year.
- Delta's fuel cost per gallon: $2.40 in Q2 of 2015 vs. $2.93 in 2014. $2.93 in Q1 of 2015 vs. $3.03 in 2014
- United's fuel cost per gallon: $2.17 in Q2 of 2015 vs. $3.08 in 2015. $2.12 in Q1 of 2015 vs. $3.18 in 2014.
- American's fuel cost per gallon: $1.90 in Q2 of 2015 vs. $3.03 in 2014. $1.83 in Q1 of 2015 vs. $3.10 in 2014.
- Looking ahead, American appears to be sticking to a plan to forego hedging, while Delta and United are looking to refine their strategy to combat increased volatility with jet fuel prices.
- Previously: Airline stocks react to move in oil
Thu, Sep. 10, 9:04 AM
- American Airlines Group (NASDAQ:AAL) reports revenue passenger miles rose 5.0% to 21.0B in August. International RPMs rose 3.8% Y/Y.
- Consolidated capacity was up 2.7% to 24.3B available seat miles.
- August load factor +190 bps to 86.5%. The load factor on Pacific routes was a sky-high 91%.
- YTD load factor +20 bps to 83.1%.
- American says Q3 passenger revenue per available seat mile is anticipated to be down 6% to 8% Y/Y. Lower fares may be a factor.
- AAL +0.73% premarket to $41.30.
Fri, Sep. 4, 9:12 AM
- IATA reports total revenue passenger kilometers increased 8.2% Y/Y in July.
- The mark is an acceleration from the 5.5% growth seen in June. The timing of Ramadan impacted results.
- International traffic was up 8.6% with broad gains across geographic divisions. Asia-Pacific RPKs were up 8.5% to top the capacity growth in the region. Load factors also increased in Europe and North America during the month.
- Despite the strong read from IATA for July, the forecast for the fall is shakier. "Following a strong summer the outlook heading into autumn is unsettled to say the least," warns the industry watcher.
- Global airline stocks: AAL, UAL, DAL, RYAAY, OTCPK:CPCAY, OTCPK:SINGY, CEA, ZNH, CPA, GOL, LFL, OTCPK:DLAKF, OTCPK:QUBSF, ALK, HA, OTCPK:AIRYY, OTCPK:MLYAF, OTCPK:AFLYY, VLRS, LUV, AVH, OTCPK:JAPSY, OTC:AFRAF, OTC:EJTTF, OTC:WJAFF, OTC:WJAVF, OTCQX:ESYJY, OTCPK:ICAGY, VLRS, OTCPK:GRPAF.
- Related ETFs: JETS
Wed, Sep. 2, 5:47 PM
- Expedia (NASDAQ:EXPE) has renewed its deal to provide American Airlines (NASDAQ:AAL) and U.S. Airways bookings on the Expedia, Travelocity, and Hotwire sites/apps. The deal has also been expanded to allow the Expedia Affiliate Network (EAN - provides hotel listings on 3rd-party sites) to provide content for AA.com, and for Expedia, Travelocity, and Hotwire to provide paid seating options for American flights.
- Expedia's air ticket sales rose 26% Y/Y in Q2 (20% on an organic basis). Revenue/ticket fell 10%.
Wed, Sep. 2, 1:02 PM
- The airline sector is taking its cues from the energy market today where oil has made a strong move lower.
- Stocks making significant gains include Hawaiian Holdings (HA +5%), JetBlue Airways (JBLU +4.5%), Alaska Air Group (ALK +4.3%), American Airlines Group (AAL +4.2%), and Delta Air Lines (DAL +3.9%).
- The outlier again is Republic Airways (RJET -13.5%) which is mired in labor and bankruptcy concerns.
- Related ETFs: JETS.
AAL vs. ETF Alternatives
American Airlines Group Inc, through its subsidiaries, operates in the airline industry. The Company has hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York City, Philadelphia, Phoenix and Washington, D.C.
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