Over the past 5 trading days, airline stocks exhibited mixed performance trends. Most of the carriers grossed attention with their August traffic releases. Companies like Delta Air Lines Inc. (DAL), United Continental Holdings Inc. (UAL) and American Airlines Group (AAL) reported subdued results while Alaska Air Group Inc. (ALK) witnessed impressive growth. In addition, Southwest Airlines Co. (LUV) was also in the headlines over its recently announced facelift.
A Recap of Last Week’s Most Important Stories
1. Despite a rise in August traffic figures, Delta Air Lines lost value as it partially reduced its September quarter forecast. The news impacted Delta’s stock which closed the day 5.16% lower. The Atlanta-based carrier now expects its September quarter unit revenue growth to be around 2–3%, down from the earlier forecast of 2–4%. (Read more: Delta Aug Traffic Lacks Bite, Stock Dips on Lowered View)
2. Premier carrier United Continental Holdings Inc. reported near-flat traffic figures for the month of Aug 2014. Airline traffic – measured in revenue passenger miles or RPMs, which implies revenue generated per mile per passenger – improved a mere 0.1% year over year to 19.53 billion. Consolidated capacity (or available seat miles/ASMs) for the month was 22.38 billion, up 0.2% from Aug 2013. (Read more: United Continental (UAL) Reports Near-Flat August Traffic)
3. Alaska Air Group reported 6.8% growth in its August traffic on a 7.5% increase in capacity compared to the year-ago period. However, the company reported a drop in its load factor by 50 basis points (bps) to 87.3%.
4. American Airlines also reported its August performance that reflected near-flat traffic. However, total capacity for the month was up 1.1% while load factor came in at 84.6%, down 90 bps.
5. Southwest Airlines announced a fresh modern look for its jets. Apart from all aircraft, the newly launched look will also feature on the Southwest Airlines logo, website and airport ticket counters. (Read more: Southwest Airlines' Facelift: New Heart Echoes Core Values)
Performance
The following table shows the price movements of the major airline companies over the past 5 trading days and during the last 6 months:
|
Company |
Last 5 Days |
Last 6 Months |
|
AAL |
-3.01% |
-2.32% |
|
ALK |
-1.98% |
5.38% |
|
CPA |
2.10% |
2.33% |
|
DAL |
0.00% |
10.82% |
|
GOL |
-5.22% |
52.97% |
|
HA |
0.07% |
4.95% |
|
JBLU |
-2.59% |
35.74% |
|
LUV |
1.01% |
40.04% |
|
SAVE |
-0.81% |
20.50% |
|
UAL |
3.69% |
6.47% |
Over the trailing 5 trading sessions, airline stocks reflected a mixed trend. Top gainers over the past five days were United Continental and Copa Holdings, with gains of 3.7% and 2.1%, respectively. Biggest losers include GOL Linhas A (GOL) and Alaska Air Group with losses of 5% and 3%, respectively.
On the other hand, over the past 6 months, most of the stocks have fared reasonably well except for American Airlines, which dropped 2.3%. The biggest gainers in the 6-month span were GOL Linhas and Southwest Airlines, sporting growth of 53% and 40%, respectively.
What’s Next in the Airline Biz?
In the current week, we foresee no significant changes in the airline industry or global economic factors. As a result, we expect stocks to trade in line for the remainder of this week.
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