American Airlines Group Inc
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
How Did US Airlines Fare in 4Q15?
In this series, we’ll explore the key highlights of the major US airlines’ 4Q15 earnings. In 4Q15, the stocks of most legacy players outpaced those of regional carriers.
US and Chinese Economies Are on Different Trajectories
On April 17, China (FXI) released several economic data points. The country’s first-quarter GDP growth of 6.4% surprised on the upside.
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.
How Analysts View American Airlines ahead of Q1 Results
American Airlines (AAL), the fourth-largest US air carrier, is expected to report its first-quarter 2019 results on April 24.
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.
Southwest Airlines: Analysts’ Q4 Expectations
Southwest Airlines’ third-quarter revenues rose 5.1% YoY to $5.6 billion. The company’s EPS grew 22.7% YoY to $1.08.
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.
How Does Wall Street View American Airlines?
Out of the total analysts surveyed by Bloomberg, 64.7% of analysts have a “buy” rating on American Airlines, ~35.3% of the analysts have a “hold” rating, and no analysts have a “sell” rating.
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.
DAL’s Transatlantic Focus Boosts Its Revenue in Q3
On October 11, Delta Air Lines released its third-quarter results. The company’s adjusted EPS of $1.83 came in ahead of analysts’ expectations by $0.09 and registered a whopping 16.6% YoY (year-over-year) increase.
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.
Oil and Airlines: How Are They Mixing?
Airlines have been enjoying huge cash surpluses due to cheaper jet fuel, a situation that has persisted since oil prices experienced a massive slide in mid-2014.
Can Alaska Air Group Continue Its Healthy Revenue Growth in 2016?
For 4Q15, Alaska Air Group’s passenger revenues grew by 4.7% YoY in contrast to the industry’s revenue decline of 1% in 2015. ALK’s total revenue growth stood at 5.5% YoY.
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.
Analysts Maintain Bullish Views on Most Airline Stocks
Analysts recommend “buy” for most airline stocks. Goldman Sachs’ (GS) top picks are American Airlines (AAL) and Spirit Airlines (SAVE), and Credit Suisse’s (CS) favorites are Alaska Air Group (ALK) and Southwest Airlines (LUV).
American Airlines: What Could Affect Its Q1 Earnings
Analysts expect American Airlines to report an adjusted EPS of $0.51—down 32.4% on a YoY (year-over-year) basis.
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.
Can Alaska Air Group Maintain Its Operational Edge in 2016?
Among its legacy carrier peer group, Alaska Air Group witnessed the most aggressive growth in terms of both traffic and capacity. Airline traffic, as measured by revenue passenger mile, grew by 11.6% YoY in 4Q15.
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.
Can American Airlines’ Capacity Continue Its High Growth Rate?
After declining slightly and appearing mostly flat for the past three months, American Airlines’ (AAL) capacity grew by 8% year-over-year in February 2016.
Airlines Could See Margin Expansion in 2019
In November, the rally in airline stocks was driven by positive remarks on the entire industry from Goldman Sachs (GS) and Credit Suisse (CS).
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.
Will United Continental’s Capacity Continue to Grow in November 2016?
In November 2016, United Continental Holdings’ (UAL) capacity grew by 1.6% YoY (year-over-year). YTD as of November, capacity grew 1.3%.
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.
What Are Analysts’ Recommendations for JetBlue Airways?
According to a Bloomberg consensus, JetBlue Airways is expected to see earnings per share (or EPS) of $0.6 in the quarter, compared to EPS of $0.58 in 3Q15.
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.
Are Analysts Bullish on United Continental ahead of the 3Q16 Earnings?
According to Bloomberg, 12 out of 16 analysts tracking UAL have issued “buy” recommendations. Four analysts have issued “holds.” None has issued a “sell.”
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.
Why United Continental Got Downward Revision of 2016 Revenue
For 2016, analysts are estimating United Continental’s (UAL) revenue to decline by 4% to $36.0 billion. The decline is higher than the earlier estimate of 2%.
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.
Why Delta Air Lines’s July 2016 Metrics Left Investors Wary
US airline stocks tumbled on Tuesday, August 3, following Delta Air Lines’s (DAL) weak operational metrics for July 2016. DAL reported a 7% year-over-year decline in its passenger revenue per available seat mile numbers for July 2016.
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.
Gol’s increased operating cash flow boosts higher free cash flow
Gol’s financial assets decreased in 3Q14, but its cash balance increased to 1,942 million real from 1,636 million real in FY13.
American’s capital expenditure exceeds cash from 2014 operations
During the nine months of 2014, American Airlines generated $2,276 million cash from operations.
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.
Choosing between Short- and Long-Term Fixed-Income Mutual Funds
Bond prices fall when interest rate rise. So when interest rate rises, the value of a bond or a bond portfolio falls.
November US airline traffic grows, capacity expansion slowdown
November traffic growth was down compared to 2.7% in October, and growth in capacity picked up from 2% in October.
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 did Paulson buy a stake in Houghton Mifflin Harcourt?
Paulson opened a new 2.58% position in Houghton Mifflin Harcourt Company, a global provider of education content and solutions.
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.
Is JetBlue Airways’ Traffic Keeping Up with Its Capacity?
For July 2016, JetBlue Airways’ (JBLU) traffic grew by 6.6% YoY (year-over-year), higher than its July 2016 capacity growth of 5.5% YoY.
Key Upcoming Earnings Events for the Airline Industry
The airline industry’s fundamentals have improved tremendously in the past two years. This was driven by several factors that include low oil prices, strong passenger travel demand, and strong economic growth.
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 […]
How Southwest Airlines Stock Has Performed So Far in 2018
Southwest Airlines (LUV) stock has declined 0.5% since its traffic update on September 12.
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.
Magnetar decreases stakes in American Airlines
Magnetar reduced its position in AAL in the third quarter. The position accounts for 1.17% of the fund’s total portfolio in the third quarter.
Alaska Air Stock: What Heights Will It Reach in 4Q16?
Alaska Air is expected to announce its 4Q16 financial results on January 26, 2017. What can we expect for 4Q16 and, more importantly, for 2017?
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.
What’s the Demand Outlook for the Airline Industry?
According to IATA (or International Airline Transport Association), for September 2016, global passenger travel demand grew 7% year-over-year (or YoY).
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.
Airlines Gain after Delta’s November Traffic Update
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.
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.
How Has American Airlines’ Valuation Changed over the Years?
You should keep watch on American Airlines’ expected future debt reduction, capacity expansion, and future margins since analysts believe that airline margins have peaked.
UK Market Positive, EWU Rises by 0.06%
The UK market experienced a stock rally on Thursday, September 3, over a comment of the ECB Chief Mario Draghi regarding the ECB’s plan to fully implement its asset-buying program.
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.
An investor’s guide to China Southern Airlines
China Southern Airlines’ network connects 1,024 destinations in 187 countries, including all major cities in Asia, Europe, the United States, Australia, and Africa.
Will Delta’s Strong Operational Performance Continue in 2016?
Traffic growth Delta Air Lines (DAL) saw average traffic of about 59.0 million passenger miles for the quarter, a 0.2% year-over-year decline, despite a growth in capacity. This was driven by weak revenues in all of Delta’s markets except Latin America. As of September 2016, traffic had grown by 1.9% YTD (year-to-date) to 163.2 billion […]
Chinese airline stocks underperform relative to US counterparts
The US airlines’ improved operational efficiency was a driving factor for higher profitability and share price appreciation.
Understanding Spirit Airlines’ Stock Response to November
Spirit Airlines (SAVE) reported its February traffic numbers on March 8, 2017. Since then, the stock has gained 0.21%.
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.