American Airlines (AAL) was the last of the three legacy carriers to announce an increase in checked baggage fees. The company’s stock rose on Friday, September 21, after the announcement. This is the first time the company raised baggage fees since 2010. The company said American Airlines “AAdvantage” members, as well as first class, business class, and perineum economy customers would be exempt from these fees.
AAL was the last legacy carrier to implement this change in its baggage fees. Delta Air Lines (DAL) implemented a similar change on September 19, while United Continental (UAL) made the same move on August 31. However, regional carrier JetBlue Airways (JBLU) was the first major airline carrier to initiate this change on August 27.
All four carriers hiked fees for the first and second piece of checked baggage by $5. The fees for the first checked bag will now be $30 on all carriers as compared to $25 earlier. For the second checked bag, the fees will be $40 instead of $35 earlier.
AAL was the pioneer
Though American Airlines may not have initiated the change this time around, it was the pioneer in introducing the baggage fees for customers, according to airline analysis firm RW Mann & Company’s president, Bob Mann.
Charging separate fees for services like baggage, Wi-Fi, preferred seat assignments, and security checks are common industry practices and have been successfully used by low-cost carriers like Spirit Airlines (SAVE). Airlines began charging these fees in 2008 in an attempt to remain profitable after crude oil prices reached a peak of $132 per barrel.
Investors can gain exposure to airline stocks by investing in the iShares Transportation Average ETF (IYT), which invests 18.8% of its portfolio in airlines. Next, we’ll look at another big win for the airline industry over the last week.
As of September 21, 94% of the 17 analysts tracking Delta have a "buy" or similar recommendation for the stock.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.