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US Airline Industry Overview: June 2015

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Jul. 21 2015, Published 3:23 p.m. ET

Overview

Five of the major US airlines have reported their traffic numbers for June 2015. These airline companies are:

  • American Airlines Group (AAL)
  • Delta Air Lines (DAL)
  • JetBlue Airways Corporation (JBLU)
  • Southwest Airlines (LUV)
  • United Continental Holdings (UAL)

Most of these airlines have seen improvements in both traffic and capacity. However, the aggressive capacity growth and the fall in oil prices, along with foreign currency fluctuations and pricing pressures, resulted in a decline in the passenger unit revenues for most airline companies. The month also saw US airlines fall behind their global peers in terms of on-time performance.

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DOJ probe expected to cause temporary fall

The Department of Justice (or DOJ) launched a probe against four major airline operators—Delta Air Lines (DAL), United Continental Holdings (UAL), Southwest Airlines (LUV), and American Airlines Group (AAL).

The government agency has launched an investigation to probe any suspected unlawful coordination among the carriers to keep airfares high. The investigation has also triggered a number of lawsuits filed against these carriers.

June 2015 stock performance

The stock prices of all major airlines except JetBlue fell in June 2015. Delta Air Lines’ stock price fell by ~4%, American Airlines Group fell by ~6%, and United Continental Holdings fell by 3%. Southwest Airlines was the biggest loser and saw its share price fall by ~11%. JetBlue Airways was the only one among the six major airlines that saw a 3% rise in its stock price.

We’ll look at the performance of the six major airline stocks—American Airlines Group (AAL), United Continental Holdings (UAL), Southwest Airlines (LUV), JetBlue Airways Corporation (JBLU), Delta Air Lines (DAL), and Alaska Air Group (ALK)—in detail in the following articles.

These airlines constitute a majority of the market share (~78% by revenue passenger miles). Most of these airlines are a part of the iShares Transportation Average ETF (IYT), which holds ~38% in airline stocks.

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