Delta Air Lines Inc
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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.
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 Wall Street Analysts Recommend for Spirit Airlines
As of September 21, 30.8% (four analysts) out of the 13 analysts tracking Spirit Airlines (SAVE) had a “strong buy” recommendation.
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 Increases Third-Quarter Unit Revenue Guidance
Due to increasing crude oil prices, Southwest Airlines (LUV) expects fuel costs to rise more in the third quarter.
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.
Could 2016 Be the Year of Revenue Growth for United Continental?
United Continental (UAL) expects its unit revenue to decline approximately 6%–8% YoY for the upcoming first quarter of 2016. Revenues are expected to remain under pressure in 2016.
Can Delta Air Lines Continue to Reduce Its Debt in 2016?
Delta Air Lines (DAL) expects to generate more than $7 billion–$8 billion of operating cash flow and ~$4 billion–$5 billion of free cash flow. It plans to reduce its adjusted net debt to $4 billion by 2020.
Who Are The Lower Oil Price Winners?
According to estimates by Barclays, the industry could save up to the tune of $10 billion in fuel costs, making airlines lower oil price winners.
How Have Travel Stock Prices Reacted to Trump’s Win?
After initial jitters, the S&P 500 recovered by a wide margin, rising 1.1% at the close of trading on November 9, 2016.
Why Did Analysts Fall Out of Love with Southwest Airlines?
Out of the 18 analysts tracking Southwest Airlines (LUV), 11 analysts (61.1%) have a “buy” recommendation on the stock versus 71% analysts that had a “buy” recommendation on Southwest in 2Q16.
What Helped Alaska Air Group Drive its 2Q15 Earnings?
Adding newer destinations Alaska Air Group (ALK) added a number of new routes in the second quarter of 2015, such as: Boise to Reno Eugene to San Jose, California Los Angeles to Baltimore Los Angeles to Gunnison–Crested Butte Los Angeles to Monterey Los Angeles to San Jose, Costa Rica Portland to Austin Seattle to Charleston […]
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.
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.
More Analysts Have Turned Positive on Alaska Air Group
Alaska Air Group’s (ALK) consensus 12-month target price is $80.55, which indicates a 15.2% return potential on October 10, 2016.
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.
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.
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).
JetBlue Airways Raised Third-Quarter 2018 Guidance
Crude oil prices have been rising throughout 2018 due to supply concerns.
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%.
Leveraged Loan Fund Outflows Reach Highest Level Yet in 2015
According to Lipper, leveraged loan funds saw outflows for the week ended August 19, making it the fourth such successive week. The quantum of outflows was $754 million, the highest so far in 2015.
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.
Southwest Airlines Posted Profits while Southwestern Energy Led SPY
Southwest Airlines (LUV) gained 0.5% on January 21 while Delta Air Lines (DAL) went up 1.8% on the day.
Union Pacific: Which Commodities Led the Volume Slump in Week 37?
In the week ended September 16, 2017, it seems like Union Pacific’s (UNP) freight volumes were affected by Hurricane Harvey’s aftermath.
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.
Comparing Union Pacific’s Freight Volumes with the Industry in Week 33
In week 33 of 2017, Union Pacific (UNP) recorded a marginal rise of 0.6% in its railcars, excluding intermodal.
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.
American Express: Opportunities Abound in a Challenging Market
Co-branding relationships are an important part of the American Express business model. The costs of renewing and extending these relationships is increasing.
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.
How Did FedEx Grow into One of the Largest Logistics Giants?
In the international arena, FedEx primarily competes with DHL, United Parcel Service (UPS), and foreign postal authorities.
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%.
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.
Charlie Munger’s View on the Airline Industry
The airline industry is a cyclical industry. The cyclical sector has a sizable correlation with the various phases of the business cycle.
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.
What Analysts Recommend for Major Airlines’ Stock
Analyst recommendations Among the seven major carriers, most analysts seem to favor Delta Air Lines (DAL). Delta Air Lines has a “buy” rating from 87.5% of analysts covering it. Next is Southwest Airlines (LUV), which has 70.6% of analysts recommending “buy” and 29.4% recommending “hold.” Alaska Airlines (ALK) has 69.2% of analysts recommending “buy” and […]
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.
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.
Analysts’ Views on Delta Air Lines after Its Traffic Release
Analyst upgrades Delta Air Lines (DAL) has already received four downgrades since its traffic release yesterday. Imperial Capital reduced its target price from $54 to $50, Deutsche Bank has reduced its target price from $62 to $59, Cowen & Co. has reduced its target price from $66 to $60, and UBS has reduced its target […]
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.
How Wall Street Analysts View the Major Airlines
Among the seven major carriers, most analysts seem to favor Delta Air Lines (DAL), which has a “buy” rating from 87.5% of the analysts.
China Southern Airlines’ Performance in a Competitive Market
China Southern Airlines’ YTD performance is 14.90%. DEF is -7.98%. DEF’s PE ratio is 15.84x. China Southern Airlines is trading at a PE ratio of 5.43x.
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.
Did Delta’s Guidance Cut Prompt a Losing Streak for Airlines?
Delta Air Lines (DAL) stock fell 3.5% after its traffic release on September 5, 2017. The negativity has spread to other players.
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.
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.
Organic Growth Boosts China Southern Airlines’ Performance
China Southern Airlines is a $10.56 billion company. It’s affiliated with China Southern Air Holding Company. It specializes in air transportation services.
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.
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.
Airline Relative Valuations: What Is Priced In?
The airline industry is capital-intensive, with high levels of depreciation and amortization and varying degrees of debt and operating leases. To neutralize these factors, we use the EV-to-EBITDA ratio to value airline stocks.
What Investors Should Know about Delta Air Lines
Delta Air Lines (DAL) is the third largest domestic airline in the US. The company serves more than 170 million customers each year across the globe.
Did Kansas City Southern Overreact to Trump’s Success?
Eastern US railroad stocks (NSC) (CSX) celebrated Trump’s prospective entry into the White House. Why did the smallest Class I railroad stock catch a cold?
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.
What Did JetBlue Lose in the Alaska Air-Virgin America Deal?
JetBlue (JBLU) has a strong presence on the East Coast with a major presence in New York, Boston, and the Caribbean. The airline has a much less commanding presence on the West Coast.
What the Direction of October’s Truck Tonnage Index Indicates
In this article, we’ll look at the direction of the Truck Tonnage Index (or TTI) in October 2016.
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.
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.
Airlines Passenger Yield Continues to Decline in August 2015
Passenger yield declined by 8% year-over-year for August 2015 to 15.3 cents from 16.6 cents. This is the highest decline since the start of the year.