Tue, Jul. 14, 11:04 AM
- It's a topsy-turvy day for the airline sector with JetBlue (JBLU +1.5%) impressing with its June traffic numbers and Spirit Airlines (SAVE -8.5%) disappointing with guidance.
- The bigger story might be the forecast on oil prices after the Iran nuclear deal was hammered out.
- Though oil prices haven't moved off dramatically with the timing of excess supply on the market unknown, the development is a long-term consideration for airlines which are looking for a sustained period of lower jet fuel prices.
- Also on the radar, capacity concerns have been dialed back a bit over the last week, while a report yesterday on booming ancillary revenue in the sector painted a bright picture.
- Trading is mixed on Delta Air Lines (DAL +0.2%), American Airlines Group (AAL -0.8%), United Continental (UAL -0.5%), Virgin America (VA -0.4%), Allegiant Trading (ALGT -0.8%), Hawaiian Holdings (HA -0.5%), Alaska Airl Group (ALK +0.4%), Republic Airway (RJET -1.9%), and Southwest Airlines (LUV -0.4%).
- There's always the U.S. Global Jets ETF (NYSEARCA:JETS) for a broad sector play.
- Previously: Load factor impresses at JetBlue (Jul. 14 2015)
- Previously: Spirit Airlines cuts 2015 op. margin guidance; shares -4.8% (Jul. 13 2015)
Mon, Jul. 13, 11:36 AM
Fri, Jul. 10, 2:50 PM
Fri, Jul. 10, 11:30 AM
- American Airlines Group (NASDAQ:AAL) is up 3.4% after the company calmed some fears of investors on capacity growth.
- The company said it expects 2015 available seat miles to rise 1%, down from prior guidance for a 2% increase.
- Previously: American Airlines Group issues fresh guidance and June traffic report (Jul. 10 2015)
Fri, Jul. 10, 8:39 AM
- American Airlines Group (NASDAQ:AAL) announces revenue passenger miles increased 2.8% to 20.4B in June.
- Pacific RPMs were +20.3% to 940.3M, while domestic RPMs were +3% to 11.568B.
- The company's capacity was up 2.4% to 23.9B available seat miles.
- June load factor +40 bps to 85.4%.
- YTD load factor -50 bps to 81.7%.
- American sees Q2 passenger revenue per available seat mile down 6% to 8%. Pretax margin for the quarter is expected to fall in the 16% to 18% range.
- AAL +1.36% premarket to $40.21.
Thu, Jul. 9, 11:20 AM
- U.S. airlines face at least 15 antitrust legal actions over allegations of fare collusion, according to a count by The Dallas Mornings News.
- Most of the lawsuits cite public comments made by airline officials on the need to maintain capacity discipline and tacit understandings instead of documented agreements.
- Airline stocks as a group are ahead of market averages on the day.
- Related stocks: DAL, UAL, AAL, SAVE, RJET, HA, ALK, JBLU, VA, ALGT.
- Related ETF: JETS.
- Previously: Airline stocks fall; DOJ probing price collusion (Jul. 01 2015)
- Previously: Airlines' talk of "discipline" may have led to antitrust probe, experts say (Jul. 02 2015)
Thu, Jul. 2, 6:25 PM
- Frequent assurances by U.S. airline executives that they would maintain "discipline" when adding seats on competitive routes were a red flag for antitrust regulators eyeing possible collusion between the four largest air carriers - American Airlines (NASDAQ:AAL), Delta Air Lines (NYSE:DAL), United Continental (NYSE:UAL) and Southwest Airlines (NYSE:LUV) - antitrust experts say.
- At a meeting last month in Miami of the International Air Transport Association, at least three senior airline execs stressed the need for "discipline" - "The word 'discipline' is a no-no," says one antitrust expert, who adds that the Justice Department probe should not be a surprise.
- Another antitrust expert thinks the investigation's actual goal could be to prod the airline industry to reduce prices and give travelers more of the benefit of the recent sharp fall in fuel prices.
- Cowen airline analyst Helane Becker says the DoJ collusion claims are without merit, and recommends buying the best airline stocks on the weakness caused by the news; her top picks remain UAL, DAL, LUV and Alaska Airlines (NYSE:ALK).
Wed, Jul. 1, 2:31 PM
- A DOJ spokeswoman states the agency is probing potential "unlawful coordination" between some airlines. The AP states a document obtained by the news service indicates the DOJ is "investigating whether airlines are colluding to grow at a slower pace as part of an effort to keep airfares high." No word yet on which airlines are being probed.
- Airline stocks have sold off in response. Decliners include United Continental (UAL -4.3%), American Airlines (AAL -4.1%), Southwest (LUV -4.5%), Delta (DAL -4.2%), Alaska Air (ALK -1.7%), Hawaiian Holdings (HA -4.8%), JetBlue (JBLU -5%), Spirit Airlines (SAVE -3.1%), SkyWest (SKYW -4.1%), and Virgin America (VA -1.9%).
- The U.S. Global Jets ETF (NYSE:JETS) is down 2.8%.
Tue, Jun. 23, 9:25 AM
- Morgan Stanley digs into the airline sector with a wave of initiations.
- Top sector picks are Spirit Airlines (NASDAQ:SAVE), United Continental (NYSE:UAL), Delta Air Lines (NYSE:DAL), and Alaska Air Group (NYSE:ALK) which are set at Overweight.
- The four companies boast attractive free cash flow and EPS growth potential, according to the investment firm.
- America Airlines Group (NASDAQ:AAL) and JetBlue (NASDAQ:JBLU) are given Equal-weight ratings.
- The bear calls from MS on the group are Southwest Airlines (NYSE:LUV) and Virgin America (NASDAQ:VA), both tagged at Underweight.
- Previously: Value plays all around in the airline sector (Jun. 20 2015)
Mon, Jun. 22, 9:55 AM
- American Airlines Group (AAL +3.4%) moves higher in early trading after a positive profile on the sector in Barron's identified the stock as a value play.
- Shares of AAL are still 31% below their March highs and trade at an attractive forward earnings multiple based on current projections.
- Previously: Value plays all around in the airline sector (Jun. 20 2015)
Sat, Jun. 20, 2:45 PM
- Airlines stocks are poised for a breakout as the reality of improved profits overrides concerns on capacity growth, reasons Barron's Jack Hough.
- The publication mirrors the view of many SA commenters that there's a disconnect between valuations in the sector and the degree to which lower jet fuel prices continue to prime operating earnings.
- Take for example no-hedging American Airlines Group (NASDAQ:AAL) which is estimated to save $4B a year from the lower level of jet fuel prices. Other airlines are peeling off some hedges to reap a bigger fuel benefit each quarter.
- Efficiency for U.S. airlines is still solid with a majority of airlines reporting load factors of 80% or higher, although increased competition in some markets has pushed key metric RASM lower. The most recent read on fares came in positive.
- Also in the mix is the continued growth of service fees and consolidation benefits from mergers by legacy carriers.
- P-E ratios of below 12 (based off of 2015 estimates) are common in the sector giving investors something of a value play. Republic Airways (NASDAQ:RJET) can be nabbed with a forward earnings multiple of 6.48. JetBlue (NASDAQ:JBLU) is up 27% YTD, but only trades with a 10.5 P-E collar.
- Barron's identifies American Airlines Group, Delta Air Lines (NYSE:DAL), United Continental (NYSE:UAL), and Southwest Airlines (NYSE:LUV) as four stocks that could rise 15% to 50% over the next year. If the view on the sector is spot-on - JetBlue, Virgin America (NASDAQ:VA), Hawaiian Holdings (NASDAQ:HA), Spirit Airlines (NASDAQ:SAVE), Republic Airways, Allegiant Travel (NASDAQ:ALGT), SkyWest (NASDAQ:SKYW), and Alaska Airlines Group (NYSE:ALK) should also put in gains.
- Related ETFs: JETS
Fri, Jun. 19, 10:31 AM
- Airline stocks rally off of a drop in oil prices and a week of declining concerns on unrestrained capacity growth.
- JPMorgan added to sentiment with a positive note on airline stocks in which it called the group oversold recently.
- The read on U.S. fares earlier this week was also positive.
- American Airlines Group (AAL +4.3%), United Continental (UAL +3.5%), Delta Air Lines (DAL +3%), JetBlue (JBLU +2.9%), and Hawaiian Holdings (HA +2.5%) are making the strongest gains in the sector.
- The U.S. Global Jets ETF (NYSE:JETS) is up 1.60%.
Fri, Jun. 19, 8:26 AM
- American Airlines Group (NASDAQ:AAL) won the right to launch daily service from Los Angeles to Tokyo Haneda Airport beginning in October.
- The slot opened up when Delta decided to end a Seattle-to-Haneda route after the Department of Transportation required the carrier to increase the frequency of flights out of Haneda.
- The landing slots at Haneda are highly coveted due to the airport's closer proximity to downtown Tokyo than Narita International Airport.
Thu, Jun. 18, 11:26 AM
- There's a major fight going in on in Dallas over Love Field involving major carriers, the DOT, and the city.
- On one side Virgin America (VA +2.1%) and Southwest Airlines (LUV -1.3%) want to see Delta Air Line (DAL +0.4%) pushed out of the airport when its agreement with Southwest expires on July 9.
- The DOT has mandated that Southwest continue to carve out slots for Delta.
- American Airlines Group (AAL +0.4%) is shouldering into the controversy looking for space to add AA flights.
- The City of Dallas is looking to stay neutral, but has included all the parties in a lawsuit asking a federal judge to make a ruling.
Thu, Jun. 18, 9:06 AM
- Airline fares rose 5.7% in May on a seasonally adjusted basis, according to the Bureau of Labor Statistics.
- The average fare was still down 6.6% from last year on an unadjusted basis after the sector ran off a string of months with decreases.
- Fares fell 1.3% in April and 1.7% in March.
- If the bump in fares extends it could alleviate some concerns in the industry over capacity growth.
- Related stocks: LUV, UAL, DAL, AAL, JBLU, ALK, HA, SAVE, ALGT, RJET, VA, SKYW.
- BLS CPI data
Wed, Jun. 10, 1:26 PM
- JPMorgan's Jamie Baker thinks fear in the airline sector over capacity growth isn't based on historical precedence.
- The analyst points to prior periods when capacity growth led to improved revenue metrics.
- The gain in revenue from extra seats counterbalances the risk carriers will need to drop prices, he reasons.
- Baker adjust his price targets in the sector based on the current level of pessimism while holding firm on a long-term bullish view.
- JP's PT changes: Delta Air Lines (NYSE:DAL) to $63 from $72, American Airlines Group (NASDAQ:AAL) to $72.50 from $84.50, United Continental (NYSE:UAL) to $78.50 from $89, Southwest Airlines (NYSE:LUV) to $42.50 from $52.
- Previously: IATA raises global airlines profit outlook (June 8)
- Previously: Airline stocks grounded on capacity concerns (June 9)
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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