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Fri, Jan. 8, 7:13 PM
- Delta Air Lines (DAL -0.9%) has won a battle in a long-simmering dispute over gates at Dallas' Love Field, as a federal judge says Delta can't be kicked out by Southwest (LUV +0.6%) while they fight about space.
- A space crunch led Delta and Southwest into conflict last year, resulting in related lawsuits and involving peripheral players including American Airlines and Virgin America.
- Judge Ed Kinkeade ruled that moving Delta flights (five a day at Love Field) while the suits play out would be an inconvenience to passengers, saying Southwest and the City of Dallas were "playing a game of musical chairs" to pinch Delta. Delta had used gates leased by United, though Southwest paid $120M to sublease those gates in an attempt to oust Delta.
- Southwest -- which is headquartered next to the airport -- controls 18 of the 20 gates, operating 180 flights.
- Previously: Love Field case gives inside look at airline bartering (Sep. 29 2015)
- Previously: Federal judge to rule on Love Field battle (Sep. 28 2015)
- Previously: Major fight in Dallas over Love Field ratchets up again (Jun. 18 2015)
Thu, Jan. 7, 6:49 PM
- Shares of U.S. airlines finished lower today even after analysts from Credit Suisse and Morgan Stanley released upbeat notes on the industry heading into 2016.
- Credit Suisse says the risk/reward for the group remains favorable entering the seventh year of industry profitability, as P/E ratios are among the least expensive in the S&P 500 and carriers have exhibited capital discipline in a low fuel environment, driving permanent capital structure improvements.
- The firm upgraded American Airlines (NASDAQ:AAL) to Outperform from Neutral, joining top preference Delta (NYSE:DAL) as well as United Continental (NYSE:UAL), while downgrading Alaska Air (NYSE:ALK) to Neutral from Outperform as one of the most expensive stocks in the group; Spirit Airlines (NASDAQ:SAVE) needs to show "real evidence" of fundamental improvement and more about the new CEO's strategic direction.
- Southwest Airlines (NYSE:LUV) was upgraded to Equal Weight from Underweight at Morgan Stanley, which said the recent pullback sets up an opportunity ahead of improving pricing.
Thu, Jan. 7, 8:38 AM| Thu, Jan. 7, 8:38 AM | 5 Comments
Tue, Jan. 5, 2:42 PM
- Delta Air Lines (DAL +0.2%) launched the first airfare hike of 2016, according to FareCompare.com
- The price-tracking website reports American Airlines (AAL -0.1%), Southwest Airlines (LUV +2%), and United Continental (UAL -0.5%) have all matched the fare boost of up to $4 per one-way flight.
- The match by Southwest is important in particular as the carrier is usually the tipping point for an industry-wide raise.
- The fare increases are most likely outside of the regional pressure that the majors are putting on discounters Spirit Airlines, Frontier, and Virgin America (NASDAQ:VA).
- Airline stocks are mixed bag on the day. Republic Airways (RJET -14.1%) is down sharply due to a Deutschce Bank downgrade, while there is also nervous trading around SkyWest (SKYW -4.4%). Southwest Airlines is rallying, while a CEO swap has given lift to Spirit Airlines (SAVE +5.9%). Add it all up and the U.S. Global Jets ETF (NYSEARCA:JETS) is flat for the day.
Dec. 30, 2015, 7:06 AM
Dec. 28, 2015, 8:05 AM| Dec. 28, 2015, 8:05 AM | 9 Comments
Dec. 23, 2015, 8:47 AM
- Virgin America (NASDAQ:VA) expects the Dallas market to see capacity reductions in 2016 to help ease some of the pricing pressure at both DFW and Love Field.
- The aggressive post-Wright Amendment push by Southwest Airlines (NYSE:LUV) has impacted passenger revenue per available seat mile for carriers such as Virgin, Southwest Airlines (LUV), American Airlines (NASDAQ:AAL), and Spirit Airlines (NASDAQ:SAVE). Those passenger yields could improve next year as the Dallas market normalizes.
- Though Virgin bucked a trend in the U.S. airline industry of declining passenger revenue per available seat mile (PRASM) with a 1.3% gain for the first half of the year, many airlines made up ground on Virgin on the cost side with dramatic drops in cost per available per seat mile. The oil market is still cooperating on that front.
Dec. 22, 2015, 9:19 AM
- Crumbling oil prices haven't helped the Dow Jones Transportation Average (NYSEARCA:IYT) - down 19% year-to-date vs. the DJIA's (NYSEARCA:DIA) 3% loss.
- Oppenheimer technician Ari Wald isn't seeing a bottom though. He expects the Transports to break below 7,400 support (last night's close was 7,415), and with it the DJIA to slip to the 16K area (last night's close 17,252).
- Transport buys: JBLU, MATX, ALK, LUV, DAL, UAL
- Transport sells: CHRW, LSTR, JBHT, KSU, NSC, CAR, KEX, CSX
Dec. 18, 2015, 1:45 PM
- The U.S. and Mexico signed a key treaty covering air service between the two nations. The Senate will still need to approve the measure.
- The agreement opens up carriers to add routes and enter cities that were closed to new entrants previously.
- Airlines with an eye on Mexico include Southwest Airlines (LUV -1.4%), Delta Air Lines (DAL -1.7%), United Continental (UAL -0.6%), Grupo Aeromexico (OTCPK:GRPAF), JetBlue, and Volaris (VLRS -2.7%).
- DOT statement
Dec. 16, 2015, 8:27 AM
- The European Union has adopted new rules to make it easier to track jetliners, stepping up international efforts to prevent a repeat of several jetliner disappearances.
- Under the new regulations, airlines will be given three years to install a means of tracking aircraft when flying in normal conditions outside radar coverage, over oceans or remote land.
- They must also have a system for more frequent updates in the event of an emergency.
- Related tickers: AAL, UAL, DAL, RYAAY, OTCPK:CPCAY, OTCPK:SINGY, CEA, ZNH, CPA, GOL, LFL, OTCQX:DLAKF, OTCQX: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
Dec. 15, 2015, 9:09 AM
- Airline fares rose 1.2% M/M in November to follow a 1.5% increase in October, according to the Bureau of Labor Statistics.
- The average fare in November was 3.8% lower than the level from a year ago on an unadjusted basis after promotional activity in the first half of the year factored in.
- The read on airline fares could calm some anxiety over PRASM forecasts from key carriers. It's also worth noting again that fuel costs are down 40% to 50% for carriers on the year-over-year comparison.
- Related stocks: LUV, UAL, DAL, AAL, JBLU, ALK, HA, SAVE, ALGT, RJET, VA, SKYW.
- Related ETF: JETS.
- BLS CPI data
- Previously: Calling all value investors: Airline stocks head into 2016 with upside (Dec. 12 2015)
Dec. 15, 2015, 6:24 AM| Dec. 15, 2015, 6:24 AM
- November monthly performance was: 0%
- No dividends were paid in November
- Top 10 Holdings as of 11/30/2015: VeriSign Inc (VRSN): 0.41%, TFS Financial Corp (TFSL): 0.4%, TECO Energy Inc (TE): 0.37%, Vantiv Inc (VNTV): 0.34%, Nasdaq Inc (NDAQ): 0.34%, Lockheed Martin Corp (LMT): 0.34%, Southwest Airlines Co (LUV): 0.34%, Alphabet Inc Class A (GOOGL): 0.33%, Republic Services Inc Class A (RSG): 0.33%, Cameron International Corp (CAM): 0.33%
Dec. 12, 2015, 10:46 AM
- Airline stocks confounded some investors this week by not reacting favorably to a sharp drop in crude oil prices or monthly traffic reports which showed improvement in load factors. Southwest Airlines (NYSE:LUV) in particular rattled the market.
- The focus in the sector remains locked on the key PRASM metric (passenger revenue per available seat mile) which has been guided lower by several carriers due to fare pressure.
- "We believe there has been a softening in domestic fares in off-peak periods compared to what seen toward the end of October when airlines provided initial guidance updates, " noted Raymond James in an update to investors.
- Some industry insiders see fares leveling out or increasing next year as airlines adjust to their increased levels of capacity. That development could provide a nice recovery for PRASM with crude oil prices expected to stay low for most of 2016 and booking trends strong.
- Airlines trading with a forward price-to-earnings ratio below 10 include Spirit Airlines (NASDAQ:SAVE), Delta Air Lines (NYSE:DAL), United Continental (NYSE:UAL), American Airlines Group (NASDAQ:AAL), SkyWest (NASDAQ:SKYW), and Virgin America (NASDAQ:VA). JetBlue (NASDAQ:JBLU) and Southwest are just slightly over the 10 PE mark. Many of the above names are listed as top holdings of the U.S. Global Jets ETF (NYSEARCA:JETS).
Dec. 11, 2015, 7:36 AM
- Southwest Airlines (NYSE:LUV) CEO Gary Kelly says discounting in the airline sector picked up after bookings around Thanksgiving where lower than anticipated.
- The unexpected fare pressure was one of the main reason Southwest lowered its forecast for passenger revenue per available seat mile for Q4.
- Shares of Southwest are down over 8% this week as concerns over the PRASM metric overshadowed the sharp drop in fuel prices in the last few sessions.
Dec. 10, 2015, 8:09 AM
- IATA issues a strong outlook for airline sector profits.
- The net profit forecast for 2015 is revised upward to $33B from $29.3B. A net profit margin of 4.6% is expected.
- The outlook for 2016 from IATA is for total profits of $36.3B and a net profit margin of 5.1%.
- 2016 profit forecast by region: North America $19.2B, Europe $8.5B, Asia-Pacific $6.6B, Middle East $1.4B, Latin America $400M, Africa -$100M.
- Strong passenger demand and lower oil prices are two drivers of the profit growth, although profit is impacted significantly in many markets due to the high level of the U.S. dollar, notes the industry-watching group.
- Global airline stocks: AAL, UAL, DAL, RYAAY, OTCPK:CPCAY, OTCPK:SINGY, CEA, ZNH, CPA, GOL, LFL, OTCQX:DLAKF, OTCQX: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
Dec. 8, 2015, 1:10 PM
- Southwest Airlines (LUV -8.9%) is down sharply after warning of flat to -1% revenue per available seat mile growth in Q4.
- Despite strong traffic growth from Southwest, lower fares or December bookings activity could be holding back the RASM metric.
- Still, with crude oil reaching new lows today, some analysts see a bit of an over-reaction to the report.
- Previously: Traffic dazzles for Southwest Airlines in November (Dec. 8)
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