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Mon, Jan. 11, 6:42 PM
- United Airlines (NYSE:UAL) says its passenger unit revenue may have fallen more than expected in Q4, as the November attacks in Paris slowed traveler demand and lower oil prices hurt sales to energy clients at its Houston hub.
- UAL discloses its Q4 consolidated PRASM fell 5.75%-6.25% Y/Y, worse than its earlier forecast for a 4%-6% drop for the quarter.
- United, which has accounted for more than 80% of flights at George Bush Intercontinental Airport in Houston, has taken a bigger sales hit than peers from Q4's nearly 20% decline in U.S. crude oil prices.
- UAL says its Q4 pre-tax profit will come in at 9.75%-10.75%, within the range of its prior guidance of a 9.5%-11.5% margin.
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, 4:12 PM
Wed, Jan. 6, 5:49 PM
- United Airlines (NYSE:UAL) just announced that CEO Oscar Munoz underwent a heart transplant operation today and is in recovery.
- The company says the transplant was not a result of a setback in his recovery from an Oct. 15 heart attack, but was considered the preferred treatment.
- United says it expects him to return to the firm by the end of Q1 or the beginning of Q2. It'll provide more updates in the coming 24 hours.
- Previously: United Airlines CEO Munoz plans to return in Q1 2016 (Nov. 05 2015)
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, 8:07 AM
- Major airlines have become more aggressive on pricing in December, according to studies reported by The Wall Street Journal.
- The most intense pricing competition is on the low-end where American Airlines (NASDAQ:AAL), Delta Air Lines (NYSE:DAL), and United Continental (NYSE:UAL) are going head-to-head with Spirit Airlines (NASDAQ:SAVE), Frontier Airlines, and Virgin America (NASDAQ:VA).
- Fare battles and additional capacity in key U.S. markets have impacted unit revenue in the sector, although not enough to wipe away the cost savings from lower fuel expenses.
- The average fare in the U.S. was down 3.8% Y/Y in November.
- Previously: Airline check: Fares higher in November, oil prices favorable (Dec. 15 2015)
Dec. 29, 2015, 3:22 PM
- United Airlines (NYSE:UAL) plans to focus on expanding to secondary cities in China after running into some obstacles in India with Middle East airlines adding capacity.
- The carrier, which already has more non-stop flights to China than any other U.S. airline, will add flights to China from San Francisco and other U.S. cities as early as next March.
Dec. 28, 2015, 8:05 AM| Dec. 28, 2015, 8:05 AM | 9 Comments
Dec. 25, 2015, 2:51 AM
- Pilot leaders at United Continental (NYSE:UAL) have agreed to send a proposed contract extension to union members for approval.
- What's in the deal? A 13% pay raise in 2016, followed by annual boosts of 3% and then 2%.
- The airline’s 12K aviators are due to start voting on the two-year extension Jan. 5, and majority backing would extend United's recent success in reaching new deals with its other unionized workers.
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. 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. 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. 9, 2015, 7:02 AM
- United Airlines (NYSE:UAL) reports revenue passenger miles rose 4.2% to 15.923B in November. Latin RPM were up 10.6% during the month.
- Total capacity increased 1.9% to 19.496B available seat miles. ASMs fell for Atlantic and Pacific routes.
- Passenger count +6.7% to 11.327M.
- November load factor +180 bps to 81.7%.
- YTD load factor -10 bps to 83.5%.
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