United Continental Holdings Inc

The stocks of some specific companies that became victims in the 9/11 terrorist attacks were shorted on September 10, 2001. What the short sellers knew is baffling.

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.

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.

Growing capacity is necessary for revenue growth. However, capacity expansion that exceeds demand growth can lead to declining utilization.

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.

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.

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 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.

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.

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.

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.

Capital expenditure is generally high in the airline industry. Delta manages to keep it low through its strategy of buying used aircraft.

Alaska Air Group’s (ALK) consensus 12-month target price is $80.55, which indicates a 15.2% return potential on October 10, 2016.

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.

Airline capacity utilization is measured using the passenger load factor, which is calculated by dividing traffic numbers by capacity numbers.

United achieved significant fuel cost savings during 3Q14 in the form of lower purchase costs and improved fuel efficiency.

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.

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.

In Q3 2020, billionaire investor Leon Cooperman’s top five holdings were Fiserv, Mr. Cooper Group, Alphabet, Cigna, and Trinity Industries.

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.

According to Bloomberg’s consensus, out of the 14 analysts tracking American Airlines (AAL), 71.4% have “buy” recommendations.

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.

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.

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%.

For 2Q16, analysts are estimating 4.2% revenue growth for Alaska Air Group (ALK), which is slower than the 6.2% growth in 1Q16.

Growing trade activity drove the recovery in cargo traffic in emerging markets in Asia, but it was slightly offset by the slowing European economy.

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.

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.

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.

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.

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.

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.

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.

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.

During fatal disease outbreaks, rules and restrictions are imposed—especially on air transportation. This includes canceling flights to the affected areas.

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.

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.

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.

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.

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.

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.

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.

Just a few days ago, we wrote about how Trump had received very little support from the travel industry. Now that he’s been elected, what’s next?

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

Delta Air Lines (DAL) reported its fourth quarter 2016 results on January 12, 2016. The airline’s revenue fell.

Analysts’ “hold” ratings on American Airlines stock have risen significantly. Nine analysts, a total of 56.3%, now have “hold” ratings on the stock.

The US airline stocks are in focus as crude oil prices soar after the US assassinated a top Iranian military commander last Thursday night.

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 Lines (DAL) derives 65.8% of its revenue from the passenger segment, 2.5% from the cargo segment, and 10.3% from other sources.

Investors should keep an eye on airfare trends. Despite a 40% fall in crude oil prices—the major cost for airlines—airfares have remained fairly stable.