American Airlines Group Inc
Latest American Airlines Group Inc News and Updates

Why Is There a Pilot Shortage in the Airline Industry?
As many as 30,000 pilots will reach the mandatory retirement age of 65 years by 2026. If there aren’t sufficient new hires to replace them, airlines could face a pilot shortage.

Robert Isom: American Airlines' Next CEO Has a Net Worth Over $23.8M

American Airlines President Robert Isom to Succeed Doug Parker as CEO

American Airlines CEO Doug Parker to Retire—What’s His Net Worth?

A Forecast for Airline Stocks As Restrictions On International Travel to the U.S. Ease

JetBlue and American Airlines Formed an Alliance, Not a Merger

What Stocks Were Shorted on September 10, 2001, Before 9/11?

Why American Airlines Is Canceling Flights Amid Travel Rebound

Why Delta’s 3Q14 fuel expense was impacted by fuel hedges
Fuel expense is Delta’s largest expense. It accounted for ~29% of the total operating expense in 3Q14. Fuel consumption per available seat mile decreased by 1.5% during the quarter.

Why fatal disease outbreaks impact economic activity
The World Bank estimated Ebola’s impact by analyzing two scenarios—low Ebola and high Ebola. The scenarios are based on the probability of the disease spreading internationally.

Airline Merger Rumors in 2021: What US Airways Taught Us

Why American Airlines Stock Probably Isn't the Next GameStop

Why Delta Air Lines’ Traffic Fell in August 2016
Delta Air Lines’ (DAL) total traffic fell due to a computer outage. For August 2016, Delta’s traffic fell by 2.8% as compared to the 0.5% capacity growth.

What Should Airline Industry Investors Look Out for in 2016?
Growing capacity is necessary for revenue growth. However, capacity expansion that exceeds demand growth can lead to declining utilization.

JetBlue’s unit cost growth: Employee costs up, lower productivity
Salary, wages, and benefits increased as a result of higher wage rates. Airlines have also had to increase headcount to adhere to the new Federal Aviation Administration (or FAA) regulations on flight, duty, and rest.

Alaska Airlines Capacity Growth Is Faster than That of Its Peers
Alaska Air Group saw the highest surge in traffic demand and was the leader in capacity growth, with a 6.4% YoY increase in its capacity in July 2015.
Why Delta’s unit cost increased in 3Q14
Delta’s operating expenses increased by 16%, on 7% higher revenue, to $10,343 million. Higher costs had a negative impact on Delta’s operating profits.
Estimating American Airlines’ earnings growth
Apart from improved operational efficiencies, American has outperformed its peers in pre-tax margin (excluding special items) improvement in the first half of 2014 to 8.7% from 4.1% in the previous year.

John Paulson’s Paulson & Co. buys a new position in CBS in 1Q14
Paulson initiated a new position in CBS Corp. (CBS) last quarter. The position accounts for 1.35% of Paulson’s $20 billion 1Q 2014 portfolio.

Appaloosa Management raises its stake in American Airlines Group
Appaloosa Management enhanced its position in American Airlines Group Inc. (AAL) last quarter that now accounts for 3.48% of Appaloosa’s total 1Q portfolio.

Why Airlines Got off to a Bad Start in 2016
2016 has been the worst start for the S&P 500 in the past eight years. US airlines also saw a bad start. The Dow Jones U.S. Airline Index has fallen 4% YTD.

Comparison of China Eastern’s fuel costs with competitors
Chinese airlines have an advantage of having lower employee costs compared to their counterparts in the US. Operational efficiency of US airlines are comparatively higher.
Must-know: Alaska’s commitment to increase shareholder returns
Increases in share prices and dividends provide direct benefits to shareholders. The increases in share prices give better returns. Share repurchases and stock splits provide indirect benefits. Share repurchases lead to a reduction in outstanding shares. This results in increased EPS.

Could Pilot Strikes Become a Major Issue for the Airlines?
In mid-September 2016, the Hawaiian Airlines pilot union opened a strike operations center to operate in the event of a strike.
Gol’s passenger revenue increases on higher yields
Brazil is the third largest domestic aviation market. With double-digit traffic growth, Brazil was one of the fastest-growing domestic markets in 2010 and 2011.
Delta Air Lines’ key strategy to increase shareholder returns
Capital expenditure is generally high in the airline industry. Delta manages to keep it low through its strategy of buying used aircraft.
Must-know: Delta Air Lines’ second quarter earnings
Today, Delta is one of the largest airlines in U.S. providing transportation services for passengers and cargo—it serves almost 165 million customers each year to 225 domestic and 97 international destinations.

Boeing Stock Falls after Comments by Delta’s CEO
Delta Air Lines (DAL) reported its earnings on October 14, 2015. The earnings call caused greater movement in one of Delta’s key vendors—Boeing (BA).

Can Airline Capacity Utilization Improve Going Forward?
Airline capacity utilization is measured using the passenger load factor, which is calculated by dividing traffic numbers by capacity numbers.

Are 2016’s Rising Airfares Here to Stay?
Since airlines across the industry have been forecast to beat record profits achieved in 2015, consumers have expected a further fall in airfares.
United sees major improvement in 3Q14 fuel cost efficiency
United achieved significant fuel cost savings during 3Q14 in the form of lower purchase costs and improved fuel efficiency.
The must-know drivers of air cargo growth for US airlines
According to the IATA, global air freight volume has increased by 4.5%. Capacity, measured by available freight ton kilometers (or AFTK), increased by 3.5% year-over-year in August 2014.

Soaring high: Appaloosa initiates a position in American Airlines
Appaloosa Management’s top new buy last quarter was American Airlines Group (AAL), with a 2.22% position in the hedge fund’s U.S. long portfolio.
Why JetBlue’s cash position has improved
As of December 2013, JetBlue Airways (JBLU) had cash and cash equivalents of $225 million. JetBlue’s cash position has improved by 24% from $182 million in 2012.

Will Airfares Continue to Decline in 2016?
According to a study by Expedia, airfares fell by about 5% in 2015. Despite this decline, passenger complaints are on the rise. Many consumer leaders also lobbied for airfare reductions.

Must-know: Alaska’s increasing return on invested capital
Alaska’s capital expenditure (or capex) mainly includes investment on aircraft. It increased since 2010. In 2013, ~80% of the total cash used for investing activities was on capital expenditure. The total capital expenditure was $566 million. $487 million was on aircraft and aircraft purchase deposits. $79 million was on flight equipment and other property and equipment.

BofA Cut Boeing Target Price Due to Rising MAX Uncertainty
On Monday, Bank of America analyst Ronald Epstein lowered his target price on Boeing stock by $10 to $360. However, he maintained his “neutral” rating.

Why Most Analysts Still Recommend ‘Buys’ on American Airlines
According to Bloomberg’s consensus, out of the 14 analysts tracking American Airlines (AAL), 71.4% have “buy” recommendations.

Why Is Qatar Airways Interested in American Airlines?
In the last week of June 2017, Qatar Airways’ CEO, Akbar Al Baker, disclosed the carrier’s interest in buying a 10% stake worth $808 million in American Airlines through the open market.

Most Airline Stocks Continue to Tumble in August
In 2015, most airline stocks have fallen, and the NYSE ARCA Airline Index (XAL), which is composed of the major US airline stocks, has also tumbled as much as 13.5% year-to-date.
Why it’s important for airlines to improve load factor
Load factor measures capacity utilization. It indicates the percentage of total capacity that an airline utilizes. Airlines are capital intensive. They have high fixed costs.
Why United Continental’s high-cost structure affects its margins
In 2013, almost 57% of United’s (UAL) $37,030 million total operating costs comprised fuel costs (33%) and salaries (23%), compared to Delta’s 46%.

Alaska Air: Why Analysts Forecast Higher Revenue in Next 2 Years
For 2Q16, analysts are estimating 4.2% revenue growth for Alaska Air Group (ALK), which is slower than the 6.2% growth in 1Q16.

Low yield, utilization drive down air cargo profitability
Growing trade activity drove the recovery in cargo traffic in emerging markets in Asia, but it was slightly offset by the slowing European economy.

American Airlines gets significantly lower position in Appaloosa
Appaloosa Management significantly lowered its position in American Airlines (AAL) in the third quarter that ended in September 2014. The position accounts for 3.81% of the fund’s total third-quarter portfolio.
Why airlines adopt approaches to improve yield and revenue
Alaska Airlines (ALK) has the lowest yield of $0.148 among all its peers. Its peers include Delta (DAL) at $0.1689, United (UAL) at $0.1614, American (AAL) at $0.1622, and Southwest (LUV) at $0.1602. Revenue management is essential for the airline industry. The industry needs to maximize revenue by selling the most aircraft seats possible to customers at the best price.
Changes in the US airline industry’s competitive landscape
The Airline Deregulation Act of 1978 removed all regulations governing the airline routes, airfares, entry, and exit of commercial airlines. Earlier, this was controlled by the Civil Aeronautics Board (or CAB). Airfares and all other factors would be determined by demand and supply market forces.

US airline industry: Summary of share prices and valuations
Southwest outperformed all its peers. Its share price increased 2.6% to $33.77 in September. That said, year-to-date results are positive overall.

Must-know update: DE Shaw increases its position in Sears Holdings
DE Shaw increased its position in specialty retailer Sears Holdings (SHLD) from 0.01% to 0.07% in 4Q 2013.

Why Delta’s share price increased after 3Q14 earnings release
Delta’s share price increased after the release of its 3Q14 earnings on October 16, 2014. On October 13, 2014, Delta’s share price reached $30.90—the lowest level since February 2014.

Higher passenger and ancillary revenue drive growth
JetBlue’s operating revenue increased by 6% to $1,529 million in 3Q14. The company states that its on-time performance was impacted by congestion in the air space.

How American Airlines Stock Reacted to Its Guidance Update
American Airlines (AAL) stock rose almost 0.94% on September 12, the day of its traffic release.
Key growth trends in airline passenger traffic by region
Global passenger traffic has increased by 5.8% year-over-year during the first eight months of 2014. Europe (29.7%), Asia-Pacifc (29.2%), and North America (25%) comprise ~85% of global market share by passenger traffic.

How Bond Buybacks Add Value
As of June 30, 11 fallen angel companies had issued tender offers YTD, boosting their bond prices by 5% on average.

Why Have Some Analysts Become Less Positive on American Airlines?
Out of the 14 analysts tracking American Airlines (AAL), 50% have a “buy” recommendation on the stock as compared to the 71.4% that had a “buy” rating in 2Q16.
Must-know: Southwest’s airport development initiatives and network expansion
Modernization and development of airports Southwest is involved in the management of various airport development initiatives. Few of them include Southwest entered into an agreement with Broward Country, Florida in 2013 to manage the Fort Lauderdale Hollywood International airport’s Terminal 1 modernization project. Entered into an agreement with city of Houston to expand the Houston […]

Must-know: Alaska Airlines’ aircraft and fuel efficiency
In 2013, Alaska operated a fleet of 131 Boeing 737 jet aircraft. It had contracts with Horizon, Sky West Airlines, and Peninsula Airways for regional capacity. Horizon operated 51 Bombardier Q400 turboprop aircraft. It sells all of its capacity to Alaska according to its capacity purchase agreements.

Delta Air Lines Flies High on 2Q16 Earnings
Delta Air Lines (DAL) reported its 2Q16 results on July 14, 2016. The company’s revenue fell by 2.4% YoY (year-over-year) to $10.5 billion.
Why Ebola impacted the airline industry
During fatal disease outbreaks, rules and restrictions are imposed—especially on air transportation. This includes canceling flights to the affected areas.

Can Boeing Deliver on Its New Guidance?
The Boeing Company updated its guidance for 2015. It expects revenues to end in the range of $95 billion–$97 billion by the end of 2015 compared to its previous outlook of $94.5 billion–$96.5 billion.

Airline Industry Demand Continues to Grow in August
The demand for air travel experienced considerable growth in the month of August, driven by traditional vacation travel as well as lower fares of major air carriers.

Fornaro’s Turbulent Ride and Achievements at Spirit Airlines
For October, SAVE was ranked third on the metric according to the Department of Transportation. That’s a huge improvement since Spirit has historically been last.

Looking at Investing in JetBlue, Even without Dividends
JetBlue is in its growth phase and prefers to utilize its cash receipts to fund business growth and reduce debt levels. JetBlue currently pays no dividends.

Why Did Buffett Change His Investment Philosophy on Airlines?
Crude oil is trading below $50 per barrel, one of its lowest recent prices, and it is expected to take some time before it recovers, given the huge oversupply.

Wall Street Analysts’ Recommendations for Southwest Airlines
At present, 35.3% of the analysts tracking the Southwest Airlines (LUV) stock have “strong buy” ratings, another 35.3% have “buy” ratings, and 29.4% have “hold” ratings on the stock.
Why the Ebola scare led to a 16% drop in the Airline Index
The share prices for major airline companies in the U.S. dropped substantially after the news of the first Ebola case in U.S. on September 30, 2014.

US Large-Cap Equity Funds: Is Active or Passive Investment Best?
Except for one fund (MIGFX), no other actively managed fund that we have reviewed in this series has been able to outperform the passively managed SPY.

Buffett’s Berkshire Doubles Down on Delta amid Boeing Scare
Berkshire Hathaway (BRK-B) has announced that it has added more shares of Delta Airlines (DAL) to its portfolio.

Is the US Economy Slowing Down? Trump’s Views versus Buffett’s
On multiple recent occasions, US President Donald Trump has said that the US economy is doing very well.

Why Does JetBlue Stock Continue to See Positive Momentum?
JetBlue Airways Corporation (JBLU) is the only airline stock in the industry to have gained more than 50% in 2015.

The global airline industry contributes to economic development
With 16,000 unique city pairs, connectivity by air is estimated to have doubled in the past two decades. Moreover, although demand continues to rise, the price of travel has fallen.
Overview: American Airlines Group Inc.
American Airlines (AAL) is now the largest airline as measured by Available Seat Miles (or ASMs) with a 26% market share.

What Does Southwest Airlines’s Current Valuation Tell Us?
Southwest Airlines’s (LUV) current valuation is slightly lower than its average valuation of 4.8x since October 2008.

Airlines’ Relative Valuations after 4Q16 Earnings: What Is Priced In?
Alaska Air Group (ALK) currently has the highest forward EV-to-EBITDA multiple of 6.6x.

Wall Street Analysts’ Recommendations for American Airlines
According to Reuters, of the 17 analysts tracking American Airlines (AAL), 23.5% (or four) have “strong buy” ratings on the stock.

Why Analysts Expect American Airlines’ Revenue to Decline in 2016
For 1Q16, analysts estimate American Airlines’ revenues to decline by 4% to $9.4 billion and then to slow to 2% and 0.5% in 2Q16 and 3Q16, respectively.

Why Delta Air Lines Stock Fell after Q4 Earnings
Delta Air Lines (DAL) reported its fourth quarter 2016 results on January 12, 2016. The airline’s revenue fell.

JetBlue Airways’ Stock Soars after Its 2Q16 Earnings Release
On July 26, JetBlue reported a 2Q16 revenue increase of 1.9% YoY to ~$1.6 billion. Its EPS also jumped by a strong 20.5% YoY to $0.53 in 2Q16.

Fewer Analysts Recommend ‘Buys’ on American Airlines
Analysts’ “hold” ratings on American Airlines stock have risen significantly. Nine analysts, a total of 56.3%, now have “hold” ratings on the stock.
Why the end of the Wright Amendment helps Southwest
With the repeal of the Wright Amendment on October 13, 2014, the company immediately launched nonstop flights to seven destinations. This was the largest single-day expansion in Southwest’s history.
Why Southwest expanded domestic and international service
Two of AirTran’s services to San Juan and Puerto Rico were already added to Southwest’s network in April, 2014.

Airline Stocks in Focus as US Airstrike Lifts Oil Prices
The US airline stocks are in focus as crude oil prices soar after the US assassinated a top Iranian military commander last Thursday night.

Frontier Airlines’ IPO: Is the Timing Right?
Airline financials improved drastically in the past three years. Frontier Airlines’ IPO seems to be hitting the market at the right time for its investors.

Why Is American Airlines Warren Buffett’s Top Pick?
Berkshire Hathaway’s (BRK.B) November 2016 13F filing attracted considerable interest for airline investors. The 13F revealed Warren Buffett’s new investments in the airline sector—a sector he had written off during the past decade.
Delta Air Line’s key operating segments and geographic segments
Delta Air Lines (DAL) derives 65.8% of its revenue from the passenger segment, 2.5% from the cargo segment, and 10.3% from other sources.

Alaska Air’s Low Debt: Is It an Advantage?
Alaska Air Group (ALK) has been trying to reduce its debt burden in order to strengthen its balance sheet in the long term.

Will American Airlines Increase Dividend Payouts?
American Airlines started paying dividends in mid-2014, joining the ranks of Delta Airlines, Southwest Airlines, and Alaska Air Group, the few dividend-paying airlines.

Wall Street Analyst Recommendations for JetBlue Airways
Currently, 13.3% (or two) of the analysts tracking JetBlue Airways (JBLU) stock have a “strong buy” rating. About 40.0% (or six) of them have a “buy” rating.

JetBlue Airways: What Are Analysts’ Recommendations?
JetBlue Airways (JBLU) is expected to release its 2Q16 earnings on July 26. According to an analyst consensus, JBLU is expected to earn $0.49 in 2Q16, compared to earnings per share of $0.44 in 2Q15.
Why you should consider investing in American Airlines
In this series, we’ll discuss why the ~25% share price decline since June was actually an opportunity for long-term investors to buy shares of American Airlines.

How Has Southwest Airlines Stock Fared This Year?
Southwest Airlines (LUV) stock fell 0.66% on June 7, 2017, the day it released its traffic report. Since then, the stock has continued its downtrend and has fallen 1.9%.

United Continental on the Street: Analyst Recommendations
As of June 9, four of the analysts (25%) tracking United Continental (UAL) had a “strong buy” recommendation on the stock, while five (31.3%) had a “buy.”

Why Is Delta Air Lines’s Revenue Expected to Fall in 2016?
Analysts are estimating an ~4.5% decline in Delta Air Lines’s (DAL) revenue to $10.6 billion for 3Q16.

How the Boeing 737 Max Crash Could Affect Berkshire Hathaway
Boeing (BA) has been feeling the heat after its 737 Max 8 aircraft crashed on March 10—the second crash in five months.

American Airlines’ Q3 Losses Were Lower than Expected, Stock Still Falls

Is American Airlines a Good Bet Before Its Q3 Earnings?
Must-know: Why did Ebola reach the US?
Concerns about Ebola increased in the U.S. after September 30, 2014. Thomas Eric Duncan was the first person to be diagnosed with Ebola in the U.S.

United, Delta, American Airlines Remove Domestic Change Fees
Why economic indicators influence travel and tourism demand
The airline industry contributes to U.S. economic growth. The industry drives $1.5 trillion in U.S. economic activity. It also generates more than 11 million jobs in the U.S.

Delta: What to Expect from Its Q1 Earnings
Delta Air Lines (DAL) is scheduled to report its first-quarter earnings results on April 10.