Mon, Aug. 17, 8:40 AM
- Delta Air Lines (NYSE:DAL) wants the government to halt flights out of the U.S. by Middle East carriers as the State Department probes the impact of subsidies on competition.
- The company has the backing of unions repping its workers in calling out state-owned Etihad, Emirates, and Qatar Airways for unfair practices in violation of Open Skies agreements.
- American Airlines Group (NASDAQ:AAL) and United Continental (NYSE:UAL) also back a crackdown on the Middle East carriers.
Fri, Aug. 14, 9:16 AM
- Airline stocks are on watch as U.S. crude oil prices hit their lowest level in six years.
- The sector hasn't rallied with the same vigor as it did with previous swings lower in oil which has some analysts calling for a delayed rally.
- Though many companies left some savings on the table due to hedging activity, fuel cost per mile flown ranged lower by 20% to 45% in the sector during Q2.
- Earlier this week, Raymond James pitched the case that airlines will use fare increases to cover rising labor costs, leaving fuel expense savings for balance sheet moves.
- Related stocks: DAL, UAL, AAL, SAVE, RJET, HA, ALK, JBLU, VA, ALGT, LUV.
- Related ETF: JETS.
Tue, Aug. 11, 7:34 AM
- United Continental (NYSE:UAL) reports revenue passenger miles rose 2.8% to 20.462B in July. Atlantic routes showed the strongest growth with a gain of 6.1%.
- Capacity increased 2.4% to 23.509 available seat miles.
- July load factor +30 bps to 87.0%.
- YTD load factor -50 bps to 83.3%.
- The company estimates its average fuel cost during the month was $1.73-$1.78. The mark goes up to $1.97-$2.02 if all hedging activity is factored in.
Mon, Aug. 10, 10:54 AM
Fri, Aug. 7, 2:40 PM
- A Senate report concludes the government should crack down on some fees in the airline industry after finding no relationship between expenses and pricing on ancillary services.
- Members of the Commerce, Science and Transportation Committee are expected to bring legislation to the Senate floor later this year.
- United Continental (NYSE:UAL) earned over $5.6B in ancillary fees last year to lead the sector.
- Related ETFs: JETS.
- Previously: U.S. airline profit at record level (Jul. 31 2015)
Tue, Aug. 4, 10:56 AM
- John Rainey, United Airlines' (UAL +1.4%) CFO since 2012, is leaving to become the CFO of PayPal (PYPL -0.7%), which is less than a month removed from being fully spun off from eBay.
- Rainey succeeds Patrick Dupuis, PayPal's CFO since 2010. Dupuis will remain at PayPal in the newly-created role of SVP of Simplicity, Quality, and Productivity - he'll "lead a corporate-wide transformation initiative designed to drive PayPal's productivity, service quality and customer experience." Both Rainey and Dupuis will report to CEO Dan Schulman.
- United has named finance SVP/treasurer Gerry Laderman its acting CFO while it searches for Rainey's permanent successor. Both internal and external candidates will be vetted.
Fri, Jul. 31, 1:27 PM
- U.S. airline companies generated net income of over $5.7B in Q2 off of operating revenue that was roughly in-line with the level from last year.
- Analysts expect the benefit of lower fuel prices and the high level of ancillary fee growth to continue into Q3 and Q4. While regulatory pressure may be dialed up with a collusion probe hanging over the sector, efficiency is seen firming up as strategic capacity growth feeds revenue.
- Share prices haven't quite kept up with profit growth across much of the sector on skittish reactions by some investors to ongoing developments (hacking, labor, flight disruptions, PRASM guidance).
- Forward P-E ratios below 10: American Airlines Group (NASDAQ:AAL), United Continental (NYSE:UAL), Delta Air Lines (NYSE:DAL), Hawaiian Holdings (NASDAQ:HA), Virgin America (NASDAQ:VA), Republic Airways (NASDAQ:RJET), SkyWest (NASDAQ:SKYW), Southwest Airlines (NYSE:LUV).
- Forward P-E ratios below 10-15: JetBlue (NASDAQ:JBLU), Alaska Air Group (NYSE:ALK), Spirit Airlines (NASDAQ:SAVE).
- Forward P-E ratios +15: Allegiant Travel (NASDAQ:ALGT).
- Related ETF: JETS.
Wed, Jul. 29, 9:47 AM
- United Airlines (UAL -1.2%) was attacked by the same group of Chinese hackers that illegally accessed federal personnel records and medical data, sources tell Bloomberg.
- The company hasn't disclosed a breach.
- It's not known if a computer systems outage at United earlier this month is related to the hacking incident.
- Analysts note a state-sponsored attack could be part of a spy game instead of a crime motivated by financial gain, although they also warn United's M&A strategy may have been revealed.
- Related ETF: HACK.
Sat, Jul. 25, 12:31 PM
- Airlines stocks ended the week on a down note, despite record profits being reported by American Airlines Group (NASDAQ:AAL), United Continental (NYSE:UAL), and Southwest Airlines (NYSE:LUV).
- Investors kept their sharp focus on key metric PRASM (passenger revenue per available seat mile) by turning skittish when American execs warned fare pressure will keep PRASM growth negative into 2016.
- Fares fell in May and June on an unadjusted basis as reported by the BLS, but perhaps an even bigger eye-opener was the 19% drop reported by Spirit Airlines (NASDAQ:SAVE) on average ticket revenue per flight segment - a sign of promotional pressure.
- Regulatory pressure also continues to be a larger factor. The DOT is now probing Delta Airlines (NYSE:DAL), United Continental, Southwest Airlines, and Jetblue (NASDAQ:JBLU), for possible price-gouging following the Amtrak train crash in Philadelphia. That follows a broader DOJ investigation into capacity growth collusion.
- Hedging: Though lower fuel costs continue to a major tailwind, some airlines were burned by increasing hedging activity too quickly. No-hedging American reported a 38.5% drop in fuel per available seat mile in Q2, while United Continental had to absorb a $118M hedging loss which lowered its consolidated fuel expense savings to 32% Y/Y. United said it's building up a small hedge heading into 2016 (UAL earnings call transcript).
- Related stocks: HA, ALK, ALGT, VA, RJET.
- Related ETF: JETS.
Fri, Jul. 24, 6:57 AM
- Deutsche Bank upgrades United Continental (NYSE:UAL) to a Buy rating from Hold after digesting Q2 results.
- The investment firm was puzzled by UAL's mild drop yesterday on the heels of a quarter with record profit.
- Previously: United Continental EPS in-line, misses on revenue (Jul. 23 2015)
- Previously: Fuel savings help United Continental cut into F/X headwinds (Jul. 23 2015)
Thu, Jul. 23, 8:44 AM
- United Continental (NYSE:UAL) reports consolidate passenger revenue fell 3.4% to $8.7B in Q2.
- Ancillary revenue increased 6.7% Y/Y.
- Passenger revenue growth by region: U.S. +0.2%, Atlantic -6.4%, Pacific -6.9%, Latin America -4.9%.
- Passenger revenue per available seat mile fell 5.6%.
- Aircraft fuel expense -32.1% to $2.106B.
- The company authorizes a new $3B buyback program.
- Previously: United Continental EPS in-line, misses on revenue
- UAL +2.21% premarket to $58.33.
Thu, Jul. 23, 7:33 AM
Fri, Jul. 17, 3:58 PM
- United Continental (NYSE:UAL) is slowing its pace of expansion this year to 1% or less, according to CFO John Rainey.
- Most of the major U.S. carriers have made the same general statements on limiting capacity growth this year, a development which has caught the eye of the DOJ.
- Previously: Airline fares up 2% in June (July 17)
Fri, Jul. 17, 8:48 AM
- Airline fares rose 2.0% Y/Y in June on a seasonally adjusted basis, according to the Bureau of Labor Statistics.
- The average fare was 1.3% lower than the level from a year ago on an unadjusted basis.
- The increase in fares for the month follows a 5.7% jump in May.
- There's a bit of a balancing act with fares for airlines amid a DOJ probe on collusion. Though heavyweight industry execs are looking for fare stabilization and controlled capacity increases, they are very likely to keep a tight rein on their public comments. Most analysts don't think there is a smoking gun on collusion similar to the infamous taped conversations between Braniff and American execs in the 1980s.
- Related stocks: LUV, UAL, DAL, AAL, JBLU, ALK, HA, SAVE, ALGT, RJET, VA, SKYW.
- Related ETF: JETS.
- BLS CPI data
Thu, Jul. 16, 3:40 AM
- In a first for the U.S. airline industry, United Continental (NYSE:UAL) has awarded millions of frequent flier miles to hackers who have uncovered gaps in the carrier's web security.
- United unveiled the approach in May just weeks before technological glitches grounded its entire fleet twice.
- Through the "bug bounty" program, researchers flag problems before hackers can exploit them. The cost can be less than hiring outside consultancies.
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)
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