JetBlue Airways Corp
How Can JetBlue Airways’s Valuation Change after Its 2Q16 Earnings?
On July 15, 2016, JetBlue Airways (JBLU) was valued at 4x its forward EV-to-EBITDA. JetBlue’s valuation is slightly lower than its average of 6x.
Aggressive Capacity Growth Subdued Utilization for SAVE and ALGT
The efficiency, or utilization, of an airline’s capacity is measured using the passenger load factor, which is calculated by dividing the traffic numbers by capacity numbers.
A Look at Airline Stocks’ Recent Performance
Stock performance in 2017 Most airline stocks have continued their gaining streak in 2017. As of February 14, 2017, Southwest Airlines (LUV) has seen the highest YTD (year-to-date) gain of 10.9%, followed by Alaska Airlines (ALK) with 8.5%. Allegiant Travels (ALGT) has gained 5.0%, United Continental (UAL) has gained 1.2%, and Delta Air Lines (DAL) […]
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.
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.
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 […]
S&P 500 trades at its highest since December 2014
The S&P 500 was trading at 2,068.59 on February 10, 2015, the highest level since December 30, 2014.
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.
Airlines Must Balance Load Factors with Capacity Growth
Airlines’ aggressive capacity growth has had an adverse effect on utilization, which has resulted in declining utilizations for most players.
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.
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.
A Look at How JetBlue’s Unit Revenue Changed in August
Since JetBlue Airways’ (JBLU) traffic growth was higher than its capacity growth, its utilizations improved in August 2016.
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.
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.
JetBlue Airways Raised Third-Quarter 2018 Guidance
Crude oil prices have been rising throughout 2018 due to supply concerns.
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.
Why Is JetBlue Airways’s Stock Seeing Negative Momentum?
JetBlue Airways (JBLU) was the only airline stock to have gained more than 50% during 2015, when the stock soared as high as ~65%.
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.
JetBlue Airways Stock Gained ~5% on Citigroup’s Rating Upgrade
JetBlue Airways (JBLU) stock rose 4.6% on June 11 after Citigroup (C) turned bullish on the airline and raised the target price as well.
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%.
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.
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.
Are Analysts Expecting JetBlue Airways’s Revenue to Grow in 2Q16?
Analysts are estimating 2Q16 revenue of ~$1.7 billion for JetBlue Airways (JBLU), which is a year-over-year increase of 2.2%.
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.
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.
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 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.
Can Spirit Airlines Maintain Its Industry-Leading Margins?
Spirit Airlines’ EBITDA (earnings before interest, tax, depreciation, and amortization) margin is expected to fall to 24.2% in 2016, compared to 26.8% in 2015.
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.
US Airlines Capacity Growth Outpaces Demand, Load Factor Drops
Decreasing load factors across the airline industry mean that airlines are not able to fill up their seats as fast as they are adding seats. This justifies investor fears of overcapacity.
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.
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.
Key Upcoming Events for the Airline Industry
The global airline industry’s demand grew by 6.5% in 2015, higher than the past ten-year average of 5.5% and the highest growth seen since 2010.
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.
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.
Is Southwest’s Demand Growth Enough to Fill Its Added Capacity?
In November 2017, Southwest Airlines’ (LUV) traffic grew 3.4% year-over-year (or YoY). This growth was higher than its capacity growth of 2.5% YoY in the same month.
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.
Alaska Air Group Completes Virgin America Merger
On April 4, 2016, Alaska Air Group (ALK) announced its acquisition of Virgin America for $57 per share in cash, which amounted to $2.6 billion.
What Wall Street Analysts Recommend for Southwest Airlines
Right now, 36.8% of the analysts tracking Southwest Airlines (LUV) stock have given it “strong buy” ratings. Another 52.6% of analysts have “buy” 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.
Spirit Airlines: Will Its Capacity Growth Still Outpace Its Peers?
For August 2016, Spirit Airlines’ capacity grew 17.1% YoY—similar to July and the slowest growth compared to other months, so far, in 2016.
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.
The Latest on Canadian Pacific’s Freight Volumes
Canadian Pacific’s (CP) total freight traffic fell 1.3% YoY in the week ended July 8, 2017. CP hauled nearly 29,000 railcars that week.
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 […]
JetBlue Takes Delta Head On with Atlanta Route Expansion
In August, Delta Air Lines (DAL) issued a press release stating its plans to grow in Boston, JetBlue’s (JBLU) second-largest market.
Analysts’ Recommendations for the US Airline Industry
Of the analysts tracking Delta Air Lines (DAL), 100% have a “buy” rating on the stock. It is followed by Spirit Airlines (SAVE), with 87% of the analysts recommending a “buy” and 13% recommending a “hold.”
Spirit Airlines: An Introduction to a Low-Cost Pioneer
Spirit Airlines (SAVE) is headquartered in Miramar, Florida. It’s a pioneer of ultra-low-cost carrier or ULCC airlines.
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.
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.
Spirit Airlines’s Valuation: What Is Priced In ahead of 2Q16 Earnings?
On July 8, 2016, Spirit Airlines (SAVE) was valued at 6.9x its forward EV-to-EBITDA ratio.
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.
GOL Linhas Aereas Inteligentes SA: Financials and operations
GOL was the first airline to introduce low-cost carrier industry practices and technologies in Latin America.
How Will the Alaska Air Group-Virgin America Merger Impact Stock?
Virgin America (VA) went public in November 2014. Since then and just before the merger was announced, Virgin America stock gained ~30%.
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.
How Risky Is Alaska Air Group’s Leverage?
Alaska Air Group (ALK) has been reducing its debt for the past five years. For 2016, it reduced its debt from $686.0 million to $626.0 million.
How Did JetBlue Airways Stock Perform This Year?
The JetBlue Airways (JBLU) stock is down ~1.6% since September 14.
Airlines’ Relative Valuation after 3Q17 Earnings: What Is Priced In?
Southwest Airlines (LUV) currently has the highest forward EV-to-EBITDA multiple of 6.9x among its peers.
United Continental Holdings: A must-know company overview
United (UAL) has provided good returns to its shareholders, as its share price has increased more than 100%, to $43.66 in June 2014 from an annual average of $21 in 2012.
Southwest Airlines’ Capacity Growth Continued in July
In July 2016, Southwest Airlines’ (LUV) capacity grew by 2.3% YoY, which was slower than in any other month in 2016.
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.
Why Spirit Airlines’ Stock Has Lost 40% of Its Value in 5 Months
The problems for Spirit Airlines (SAVE) started in early May, when the company ended up canceling hundreds of flights.
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.
How Can the Alaska Air-Virgin America Deal Affect Delta Air Lines?
The merger of Alaska Air and Virgin America is expected to be completed by January 1, 2017. Alaska Air last went through this process in 1982, when it acquired Horizon Air.
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.”
What Airline Investors Should Look Out for in 2017
Labor Thanks to the oil price drop, labor costs now form the highest component of an airline’s expenses. In such a scenario growing unrest among pilots and the union clout can end the airline party. Fuel prices Fuel costs now form the second major cost component of airlines. Airline margins have improved tremendously due to […]
Airline Stocks: Key Indicators to Watch
After crude oil prices, labor costs are the largest part of an airline’s expenses. Pilot strikes and shortages continue to present problems.
Do JetBlue’s Key Statistics Support Analyst Estimates?
Historically, JBLU has seen the highest capacity growth among the seven major airlines.
Why Southwest Airlines Stock Fell 9% despite Earnings Beat
Southwest Airlines (LUV) reported its Q3 2018 results before the markets opened on October 25. Its revenues rose 5.1% YoY to $5.6 billion.
Analysts’ Estimates for Delta’s Margin Suggest Limited Expansion
Delta Air Lines’ EBITDA (earnings before interest, tax, depreciation, and amortization) margins are expected to have improved to 21% in 2015 as compared to 10% in 2014.
What Are Analysts Estimating for Spirit Airlines in 2016?
Of the 15 analysts rating Spirit Airlines’ stock, 80% (12 analysts) have a “buy” rating, 20% (three analysts) have a “hold” rating, and none of the analysts have a “sell” rating.
Why the American-US Airways merger was conditional
The combined entity’s share in the Washington Reagan Airport (or DCA) would be as high as 68% and its share in New York LaGuardia would be 33%.
Overview: Does American have funds to pay debts and expansion?
Although all operating and performance metrics of AAG has shown improvement after the merger, leverage is one area that needs considerable improvement.
Why JetBlue Expects Higher Unit Costs in 2Q17
For the first quarter of the year, JetBlue Airways’ (JBLU) operating expenses, excluding fuel and profit sharing, rose 3.3% to 8.35 cents.
Southwest’s Leverage Reduction: What It Means for Investors
In fiscal 2015, Southwest Airlines (LUV) generated ~$3.2 billion in cash flow from operations. For 1H16, LUV has already generated $2.7 billion of cash flow from operations.
What Are Analysts Estimating for UAL in 2016?
UAL’s consensus 12-month target price is $77.38, which indicates a 65.6% return potential.
Understanding Union Pacific’s Week 26 Intermodal Volumes
Unlike BNSF Railway (BRK-B), Union Pacific (UNP) reported a slight fall in overall intermodal volumes expressed in containers and trailers.
Will Airline Passenger Yields Continue to Decline?
Airline passenger yield is the average airfare per passenger per mile. It is calculated by dividing the passenger revenue by revenue passenger miles (or RPM).
Why Union Pacific’s Operating Margin Contracted in 3Q17
Union Pacific’s reported a 4.5% rise in overall operating revenues in 3Q17, but its operating expenses totaled $3.4 billion—up 6% from $3.2 billion in 3Q16.
Labor costs offset lower fuel costs as airlines boost hiring
There has been a recent substantial increase in profit-sharing expenses related to the employees, as the profitability of major US airlines increased.
Could Alaska Air Group’s Margin Expand in 2017?
In 1Q17, Alaska Air Group’s (ALK) EBITDA (earnings before interest, tax, depreciation, and amortization) is expected to fall 5.8% to $385 million.
Why Genesee & Wyoming’s European Volumes Slumped in May
In May, Genesee & Wyoming’s (GWR) UK and European rail traffic slid 1.5% YoY (year-over-year).
JetBlue’s 3Q15 Performance: Must-Know Factors
JetBlue Airlines’ new premium service, which it added to 11 of its flights across high value geographies such as Los Angeles and San Francisco, has received tremendous response.
Analyzing Genesee & Wyoming’s North American Traffic in May
North American operations form a sizable share of Genesee & Wyoming’s (GWR) overall revenues.
Union Pacific’s Intermodal Traffic Dipped in Week 24
The direction of Union Pacific’s (UNP) intermodal volumes stood in contrast to the direction of its freight volumes. The company moved ~75,000 containers and trailers.
Why Analysts Reduced 2016 Revenue Estimates for Delta Air Lines
For 1Q16, analysts are estimating Delta Air Lines (DAL) revenues to decline by ~1.5% YoY (year-over-year) to about $9.3 billion.