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Airlines Gain after Delta’s November Traffic Update

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Stock action

Delta Air Lines (DAL) stock rose 1.6% on the day of its November traffic release on December 4, 2017, and its peers also saw rises. Analysts’ positivity about airlines reporting better-than-expected unit revenue growth for the 4Q17 has led to overall optimism toward airline stocks.

Legacy peers American Airlines (AAL) and United Continental (UAL) gained 1.9% and 0.03%, respectively, on December 4, and niche legacy player Alaska Air (ALK) gained 2.0% the same day. Regional carrier JetBlue Airways (JBLU) gained 3.1%, while Southwest Airlines (LUV) gained 3.5%. Spirit Airlines (SAVE) gained 2.6% on December 4.

Year-to-date performance

YTD (year-to-date) as of December 4, Southwest Airlines remains the clear outperformer, with a gain of 23.9%. Delta has gained 7.2% YTD, followed by American Airlines, which has gained 6.1% YTD.

All other major airline stocks have stayed in the red for the year. JetBlue has lost 3.3% YTD, while United Continental has lost 14.7%, followed by Alaska Air, which has lost 23.5%. Despite its gain over the past two months, Spirit Airlines is the biggest underperforming airline, with a loss of almost 25.3% during the same period.

Notably, the S&P 500 ETF Trust (SPY) has gained 18.3% YTD as of December 4, 2017, while the Dow Jones US Airlines Index (DJUSAR) has gained 3.2% during the same period.

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