Everything Is Coming Together For Delta
Adam Levine-Weinberg • 39 Comments
Adam Levine-Weinberg • 39 Comments
Thu, Jul. 21, 10:39 AM
- Airline stocks (JETS -2.8%) are broadly lower following Southwest Airlines' (LUV -8.8%) Q2 earnings miss and downbeat guidance for a 3%-4% decline in Q3 RASM from a 0.6% gain in Q2.
- Shares also are hurt by warnings from Deutsche Lufthansa (OTCQX:DLAKF, OTCQX:DLAKY) and EasyJet (OTC:EJTTF, OTCQX:ESYJY) that recent terror attacks and political turmoil in Europe were weighing on their businesses.
- Lufthansa says advance bookings, particularly on longer routes to Europe, "have declined significantly, in particular due to repeated terrorist attacks in Europe and to greater political and economic uncertainty."
- Easyjet also warns on terrorism, and says the U.K.’s Brexit vote would hurt per-seat revenue, and that foreign exchange and fuel cost effects would add ~£25M ($33M) to full-year expenses.
- DAL -3.1%, UAL -2.9%, AAL -2%, RYAAY -2.9%, ALK +0.8%, JBLU -2.3%, SAVE -2.6%, HA -1.3%, SKYW -0.2%.
Thu, Jul. 14, 7:14 AM
- Delta Air Lines (NYSE:DAL) reports total passenger revenue fell 1.8% to $8.97B in Q2.
- Passenger revenue per available seat mile slipped 4.9% to $13.59.
- Passenger unit revenues squeezed 4.9%.
- Cargo revenue decreased 20.3% to $165M.
- Other revenue down 3.6% to $1.31B.
- Passenger load factor -10 bps to 85.5%.
- Consolidated capacity increased 3.2% for the period.
- Total fuel expense reduced 16.5% to $2.06B.
- Number of aircraft in the fleet +28 Y/Y to 944.
- Q3 Guidance: Passenger unit revenue: -4% to -6%; Operating margin: 19% to 21%; Fuel price: $1.52 to $1.57; System capacity: up 1% to 2% Y/Y.
Tue, Jul. 12, 9:58 AM
- Airline stocks are making strong gains on a flurry of positive news.
- The investment in LATAM Airlines (LFL +23.9%) by Qatar Airways is having a ripple effect across other global carriers. Copa Holdings (CPA +7.9%), Avianca Holdings (AVH +8.1%), and Go Linhas (GOL +7.8%) are all solidly higher.
- In the U.S., a stronger-than-anticipated report from United Continental (UAL +7.7%) on its key Q2 revenue metric is the highlight along with a sweeping upgrade from Deutsche Bank.
- The investment firm raises United, American Airlines Group (AAL +8.6%), and Delta Air Lines (DAL +4.7%) to Buy from Hold.
- "We are of the view that all known negatives (Brexit, tepid global economic growth, over-supplied markets, etc.) are more than fully discounted in the share prices which are, on average, trading at 6.4x our 2016 EPS estimates and 6.8x our 2017 EPS estimates," reads the note from DB.
- Alaska Air Group (ALK +4.3%), JetBlue Airways (JBLU +4%), Southwest Airlines (LUV +3.4%), and Spirit Airlines (SAVE +3.3%) are all higher as well.
- The U.S. Global Jets ETF (NYSEARCA:JETS) is up 3.86% on the day.
Wed, Jul. 6, 1:02 PM
- Airline stocks continue to lose altitude amid concerns on capacity growth and labor expenses. The Bloomberg U.S. Airlines Index has retreated 27% YTD, while the slightly-diversified U.S. Global Jets ETF (NYSEARCA:JETS) is down about 17%.
- Analysts such as Credit Suisse's Julie Yates continue to point the finger directly at management.
- "Capacity growth continues to outpace GDP in all regions and the industry’s willingness to trim growth with oil still in a historically inexpensive range of $50 a barrel is low," notes Yates. Delta's disclosure of a 5% drop in PRASM in Q2 backs up her contention.
- Sector snapshot: A CS downgrade on both United Continental (UAL -3.2%) and American Airlines Group (AAL -4.1%) today sent both stocks spiraling downward, with UAL hitting a 52-week low. Also suffering from the doldroms, Delta Air Lines (DAL -1.7%) is down 29% YTD and JetBlue (JBLU -1.2%) is off 27%. Spirit Airlines (SAVE -2%) and Southwest Airlines (LUV -1.1%) don't have to worry about European demand, but have seen an impact from pricing competition in key markets this year. Virgin America (VA -0.2%) shareholders are the ones that have navigated the choppy market the best this year due to the buyout from Alaska Air Group (ALK -1.3%).
Tue, Jul. 5, 10:35 AM
- Airline stocks are notable laggards on the day after Delta Air Lines (DAL -4.4%) reduced its outlook for Q2 operating margin to 17% (from 21% to 23% prior) and reported on a 5% drop in PRASM during June.
- United Continental (UAL -3.5%) and American Airlines Group (AAL -2.5%) are seen as suffering from some of the same F/X and Brexit pressures abroad, while Spirit Airlines (SAVE -4%) and Allegiant Travel (ALGT -2.2%) continue their jittery trading patterns.
- Southwest Airlines (LUV -1.4%) is also lower, despite a positive weekend profile in Barron's highlighting the stronger balance sheet the airline company has compared to peers and the lack of European headaches.
- Previously: Delta Air Lines lower after issuing June traffic numbers (July 5)
- Related ETF: JETS.
Mon, Jun. 27, 12:39 PM
- Hawaiian Holdings (HA +4.6%) is a rare gainer among transportation stocks today as Deutsche Bank upgrades shares to Buy from Hold with a $41 price target, saying the vote to leave the E.U. creates uncertainty in near-term demand for air travel to and from the U.K. as well as how the U.K. will feature in a revised E.U.-U.S. Open Skies accord.
- The firm notes that with the IATA warning about a "permanent downward shift" in U.K. passenger volumes of 3%-5% by 2020 following the Brexit vote, U.S. airlines with exposure to the U.K. suffered 8%-11% share declines on Friday.
- Among the Big Three U.S. airlines, Deutsche Bank sees potential downside EPS risk and thus maintains Hold ratings on American (AAL -4.8%), United (UAL -7.2%) and Delta (DAL -4.5%), given that the U.K. market for 2016 represents 6.3% of AAL’s capacity, 5.4% of UAL’s and 2.8% of DAL’s.
- The firm favors domestic names such as Southwest (LUV -3.3%), Spirit (SAVE -2.8%) and JetBlue (JBLU -1.7%), "which should gain from a favorable leisure/discretionary travel outlook."
Mon, Jun. 13, 9:57 AM
- Airline stocks begin the week with a sharp downward movement.
- The terror attack in Orlando is the main driver of the selling pressure on the sector, although a bombing in the Shanghai airport yesterday is also impacting Chinese airlines China Eastern Air (CEA -2.1%) and China Southern Airlines (ZNH -5.3%).
- Decliners include Hawaiian Holdings (HA -3.1%), American Airlines Group (AAL -2.9%), Spirit Airlines (SAVE -3.8%), Delta Air Lines (DAL -2.7%), JetBlue (JBLU -2.1%), Southwest Airlines (LUV -2.5%), SkyWest (SKYW -1.8%), United Continental (UAL -2.6%), Alaska Air Group (ALK -2.3%), and Allegiant Travel (ALGT -1.5%).
- The U.S. Global Jets ETF (NYSEARCA:JETS) is down 2.72% on the day.
Thu, Jun. 2, 7:21 PM
- Panama-based air carrier Avianca (NYSE:AVH) is up 4.1% after hours on news that all or part of the airline will be sold, with interest from the big U.S. carriers, The Wall Street Journal reports.
- United Continental (NYSE:UAL) and Delta Air Lines (NYSE:DAL) are named as possible suitors for the carrier.
- Avianca is one of the continent's biggest carriers, and was established as a strategic alliance between Aerovias del Continente Americano and Grupo TACA Holdings Limited.
- Updated: Avianca Holdings ended after-hours trading at 8 p.m. up 33%.
Mon, May 16, 11:50 AM
- Delta Air Lines (DAL +3.3%) sends a jolt throughout the airline sector after reducing capacity plans for the second half of the year.
- The carrier says domestic growth will slow to +2.5% in Q4 and international capacity will be flat to down in the second half of the year.
- Delta says it thinks it will be the first network carrier to return to positive unit revenue growth later this year.
- Delta presentation slides
Wed, May 11, 5:35 PM
Wed, May 4, 2:23 PM
- Gogo (NASDAQ:GOGO) -- down as much as 6.5% today after it was brought up as a short idea at the Ira Sohn conference -- jumped in recent minutes back into positive ground on news that Delta Air Lines (NYSE:DAL) is adding Gogo's offering to at least 350 aircraft.
- That brings Delta's commitment to Gogo's 2Ku in-flight Wi-Fi tech to more than 600 mainline aircraft.
- The installation will offer Delta's customers bandwidth more than 20 times Gogo's ATG technology, Delta says, making for easier video streaming.
- Now read Gogo And Airbus Strike A Deal »
Thu, Apr. 14, 7:19 AM
Mon, Mar. 28, 12:58 PM
- Virgin America (VA +3.6%) trades at its highest level of the year as the guessing game continues over which airline company may try to buy out the budget carrier.
- Cowen says JetBlue (NASDAQ:JBLU) is the most likely acquirer of Virgin America, although Alaska Air Group (NYSE:ALK), Delta Air Lines (NYSE:DAL), and Hawaiian Holdings (NASDAQ:HA) could all be in the mix.
- Last week, Frank Holmes, CEO of the U.S. Global Jets ETF (NYSEARCA:JETS), noted that Southwest Airlines (NYSE:LUV) is a natural fit in terms of culture and global opportunities. Many airline insiders think bidding action could take Virgin America's share price into the $40s.
- Previously: Virgin America jumps 12% on report of takeover interest (March 23)
Tue, Mar. 8, 2:39 PM
- Airline stocks are down almost across the board after several U.S. carriers reported on February traffic and doled out forecasts on passenger revenue per available seat mile. The closely-watched PRASM metric has been pressured by a broad boost in capacity and heightened competition in regions where ULCC (ultra low cost carriers) scrap for market share.
- Notable decliners today include JetBlue (JBLU -7.7%), Spirit Airlines (SAVE -4.8%), Delta Air Lines (DAL -3.9%), SkyWest (SKYW -3.6%), and Virgin America (VA -3%). Southwest Airlines (LUV +0.5%) is the outlier in the sector after avoiding a forecast for negative Q1 PRASM. The U.S. Global Jets ETF (NYSEARCA:JETS) is down 2.8% on the day.
- Earlier traffic reports: American Airlines, Southwest, JetBlue, SkyWest.
Wed, Mar. 2, 9:28 AM
- Delta Air Lines (NYSE:DAL) reports revenue passenger miles increased 5.3% to 14.383M in February. Domestic RPMs were up 7.8%, while growth for international RPMs was only 1.3%.
- Total capacity rose 6.0% to 18.042B available seat miles. Domestic ASMs increased 10.6%.
- February load factor -60 bps to 79.7%.
- YTD load factor +80 bps to 80.5%.
- Delta says consolidated passenger revenue per available seat miles fell 5.5% in February. Lower fares likely factored into the drop along with a reduced load factor.
- DAL -1.84% premarket to $48.00.
Fri, Feb. 12, 6:11 PM
- In the biggest normalization development to date, U.S. officials will head to Havana Tuesday to sign a deal restarting scheduled commercial air traffic between Cuba and the United States for the first time in more than 50 years.
- The move will formalize an agreement on terms the two countries came to in December. Scheduled air traffic to Cuba from the U.S. ceased shortly after Cuba's revolution in 1959.
- Airlines will have 15 days to bid on routes for dozens of flights per day. But the deal allows for just 20 round trips per day overall between the U.S. and Havana, scarcity that could drive up bids substantially. Nine other international airports in Cuba can get 10 daily round trips.
- The Transportation Dept. will spend about a month collecting information and make a final determination on routes in the summer.
- U.S. air: DAL +0.7%, LUV +2.6%, JBLU +3.7%, UAL +2.9%, AAL +3.6%, VA +2.2%.
Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo throughout the United States and around the world. Its route network is centered around a system of hub and international gateway airports that it operates in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis,... More
Industry: Major Airlines
Country: United States
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