JetBlue Airways Corp

In this article, we’ll consider FedEx’s (FDX) Express segment’s performance in the fourth quarter.

Delta Air Lines’ higher debt means a higher interest expense and a higher DE (debt-to-equity) ratio. Delta Air Lines’ current DE ratio is 0.69x.

In this series, we’ll be taking a look at the companies that have announced $1,000 dollar bonuses, pay raises, increased dividends, and buybacks in the last two months.

Analysts’ recommendations Of the 17 analysts tracking Southwest Airlines (LUV), 36.8% of the analysts (seven analysts) gave a “strong buy” rating on the stock, while another 47.4% (nine analysts) gave a “buy” rating. The remaining 15.8% (three analysts) gave a “hold” rating. None of the analysts gave a “sell” or “strong sell” rating on the […]

As of September 19, 2017, one analyst out of the 15 analysts tracking JetBlue Airways (JBLU) had a “strong buy” recommendation on the stock.

AAL has paid little attention to its total debt, which rose from $20.8 billion at the end of 2015 to $24.3 billion at the end of 2016 and $24.5 billion at the end of 1Q17.

Alaska Air Group (ALK) is now trading at 6.6x its forward EV-to-EBITDA ratio—one of the highest valuations in the industry.

Horizon Air pilots have ratified a change in their existing eight-year pilot contract that entitles both existing and new pilots to receive significant pay raises.

During 1Q17, Delta Air Lines’ (DAL) debt rose by ~$2 billion at a blended interest rate of just 3.3%.

American Express’s (AXP) Global Merchant Services segment is expected to see a marginal increase in its net income in 2Q17.

Because Southwest Airlines’ (LUV) traffic growth lagged its capacity growth in three of the first five months of 2017, its utilization also fell in three of the five months.

Only one analyst has upgraded Delta Air Lines (DAL) since it released its traffic data on Friday, June 2, 2017.

The airline industry is very capital-intensive, so airlines generally have huge debt numbers on their balance sheets.

Currently, American Airlines (AAL) is valued at 6.6x its forward EV-to-EBITDA ratio (enterprise value to earnings before interest, tax, depreciation, and amortization).

As opposed to most other airlines that have been reducing their debts, American Airlines’ (AAL) debt has risen, partly due to its focus on completing its integration with US Airways.

For 2016 overall, United Continental (UAL) has generated $5.5 billion in operating cash flow and $1.9 billion in free cash flow.

Delta Air Lines (DAL) is currently valued at 5.3x its forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple.

Frontier Airlines earned 42% of its revenue from ancillary fees or non-ticket revenue in 2016—a significant rise compared to 25% in 2015.

In 4Q16, regional carrier Spirit Airlines (SAVE) had a leverage ratio of 0.96x, JetBlue Airways (JBLU) had a leverage ratio of 0.83x, and Alaska Air Group (ALK) had a leverage ratio of 0.36x.

In 4Q16, Southwest Airlines’s (LUV) yields fell 4% year-over-year to 14.7 cents, followed by Alaska Air’s (ALK) 3.3% decline in yield to 13.4 cents.

For November 2016, Southwest Airlines’ (LUV) capacity grew 4.9% YoY (year-over-year). It’s slower than 5.4% YoY growth the previous month.

Currently, JetBlue Airways (JBLU) is valued at 4x its forward EV/EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple.

Following JetBlue’s 2Q16 earnings release, analysts’ consensus estimate for revenues remains unchanged.

JetBlue announced that it had undertaken a small stake (the exact stake is unclear) in JetSuite, the fourth-biggest private jet operator in the United States.

For the third quarter of the year, JetBlue Airways’ (JBLU) operating expenses—excluding fuel and profit sharing—rose 3.1% to 7.86 cents.

For 3Q16, JetBlue Airways’ (JBLU) revenues stood at $1.73 billion—a 2.6% year-over-year increase compared to revenue of $1.69 billion in 3Q15.

JetBlue Airways (JBLU) saw average traffic of about 11.9 billion passenger miles for the quarter, a 7.6% year-over-year increase

Analysts expect JetBlue Airways’ (JBLU) 3Q16 revenue to come in at $1.7 billion, a year-over-year rise of 2.2%.

In 2015, Southwest Airlines’ prudent approach to capacity growth resulted in the better utilization of its capacity.

As of July 22, 2016, JetBlue was valued at 3.8x its forward EV-to-EBITDA multiple, which is lower than its average valuation of 4.8x since September 2009.

Capacity growth Like other airlines, JetBlue Airways (JBLU) has taken advantage of falling crude oil prices to expand its existing fleet. JetBlue’s double-digit revenue growth has been fueled by double-digit growth in its capacity. Historically, JetBlue Airways has seen the highest capacity growth among the seven major airlines. Spirit Airlines (SAVE) has seen the highest growth, followed by Alaska […]

For airlines such as American Airlines (AAL), we go a step further and use an EV+ Op. leases-to-EBITDAR ratio.

Some key strengths keep American Airlines ahead of its competitors. It’s the largest airline in fleet, capacity, and number of passengers. It also has a strong hold on key hubs.

After the merger, American Airlines became the world’s leading airline in terms of fleet size, network, and finances. American Airlines stock has risen more than 270% since 2011.

Soon after US Airways declared its intention to merge with American Airlines, AAL started working on its weak points and restructuring costs.

United Parcel Service, through 10,000 routes optimized with ORION, saves up to 1.5 million gallons of fuel per year.

UPS’s US Domestic Package segment consists of the time-sensitive delivery of letters, documents, and packages across the US. As the jewel in the company’s crown, this segment’s share averaged 61.1% of the total revenues in the last six years.

The airline industry is a capital-intensive industry with heavy investments required in building infrastructure, fleets, and their maintenance. As a result, airline stocks generally have high levels of debt on their balance sheets.

The airline industry has contributed to the globalization of the world economy. It connects buyers and sellers. It also transports goods across nations. It breaks the barrier of distance and time. The industry’s future looks bright. Travel expenditure in the U.S. is expected to grow by 4.3% in 2014 and 5.1% in 2015.

Spirit and its competitors have seen their EV/EBITDA decrease in the last six months due to the fear of a large increase in available seat miles.

Spirit (SAVE) ranks first in profitability among seven airlines in the United States. The main driver for this ranking comes from its exceptional ability to manage costs.

Capacity utilization has improved from the lows of ~57% in the 1970s to ~76% in 2014 and 81.88% in year-to-date 2015.

The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and competition. It’s also impacted by issues like war, terrorism, and the outbreak of diseases—such as Ebola. These issues are political. As a result, they require government intervention.

Revenue from JetBlues’ Even More Space grew at a five-year compounded annual growth rate of ~30% from $45 million in fiscal year 2008 to $170 million in fiscal year 2013.

Although trucking is the most widely used mode of transportation, the fastest growing mode of transport is by air.

According to IATA (or the International Air Transport Association), the global airline industry passenger volume and capacity increased by 5.3% year-over-year in July 2014. Freight volume increased by 5.8%. In July load factor (or capacity utilization) for passengers was 82.3%, and for freight, it was 44.4%.

The second largest cost component for airlines is salaries, wages, and benefits. Employment in the U.S. airline industry has increased in the last couple of years when the U.S. economy recovered from the recession and demand for air travel picked up.

Yield is the average fare per passenger per mile. Passenger revenue is calculated by multiplying RPM (or revenue passenger miles) with yield. Yield varies based on demand and supply factors. Since demand for air travel is seasonal, yield is higher during peak seasons.

Load factor is a measure of capacity utilization. It indicates the percentage of total capacity that is utilized by an airline. Since airlines are capital intensive and have high fixed costs, the efficiency with which they utilize their assets is key to generate adequate return on investment.

Available seat miles (or ASM) is the measure of airline capacity. It’s calculated as the total number of seats multiplied by the total distance travelled. While RPM (or revenue passenger miles) is a measure of demand, ASM is the measure of supply.