Over the past 5 trading days, airline stocks exhibited a downward momentum despite upbeat August traffic results from major carriers like Delta Air Lines Inc. (DAL) and JetBlue Airways Corporation (JBLU). Other events that grabbed attention include Southwest Airlines Co.’s (LUV) plans to fly to Costa Rica and hurricane Odile wreaking havoc for Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC).
A Recap of Last Week’s Most Important Stories
1. Southwest Airlines has filed an application with the U.S. Department of Transportation to fly to Costa Rica. Once operational, it will serve as Southwest Airlines’ first Central American destination. The daily roundtrip service will connect Thurgood Marshall International Airport (BWI) in Baltimore, WA and Juan Santamaria International Airport (SJO) in San Jose, Costa Rica. (Read More: Southwest Airlines Plans International Service to Costa Rica.)
2. Airport operator Grupo Aeroportuario del Pacífico is facing a difficult time owing to hurricane Odile, which lashed across Baja California on Monday. The Category 3 tropical storm caused severe damage and left thousand of passengers stranded amid heavy rainfall and steep winds. (Read More: Grupo Aeroportuario's Operations Hurt by Hurricane Odile.)
3. JetBlue Airways has registered steady traffic growth in Aug 2014. The carrier reported airline traffic – measured in revenue passenger miles or RPMs – of 3.72 million, up 6.7% year over year, representing the seventh consecutive month of traffic growth post a dip in numbers in Jan 2014. (Read More: JetBlue Airways' August Traffic Gains 6.7% on Fuller Planes.)
4. American Airlines Group Inc. (AAL) reported traffic results for the month of August 2014. The company’s traffic results remained flat year over year while consolidated capacity (or available seat miles/ASMs) rose 1.1%. The carrier witnessed a decline in traffic in Atlanta and Latin American markets by 1.6% and 1.9%, respectively.
5. Delta Air Lines also reported traffic results for the month of August, which increased 3.1% year over year. The growth came mainly on the back of 3.8% increase in domestic traffic and 2.1% growth in international traffic. Further, consolidated capacity rose 2.7% and load factor grew 0.3%.
Performance
The following table shows the price movements of the major airline players over the past 5 trading days and during the last 6 months:
|
Company |
Last 5 Days |
Last 6 Months |
|
AAL |
-1.56% |
4.77% |
|
ALK |
-1.56% |
2.75% |
|
CPA |
-8.29% |
-11.23% |
|
DAL |
-0.08% |
16.30% |
|
GOL |
-5.77% |
56.34% |
|
HA |
-1.86% |
12.57% |
|
JBLU |
-7.08% |
31.57% |
|
LUV |
2.71% |
44.96% |
|
SAVE |
-3.28% |
16.48% |
|
UAL |
-4.25% |
11.58% |
Over the trailing 5 sessions, almost all airline stocks reflected a negative trend, save Southwest Airlines. The biggest losers for the period were Copa Holdings SA (CPA) and JetBlue Airways with 8.3% and 7% declines in share price, respectively.
Over the past 6 months, most of the stocks have fared reasonably well except forCopa Holdings, which dropped 11.2%. The biggest gainers in the 6-month span were GOL Linhas (GOL) and Southwest Airlines, sporting growth of 56% and 45%, respectively.
What’s Next in the Airline Biz?
In the current week, we foresee no significant changes in the airline industry and global economic factors. As a result, we expect no stocks to trade in line for the remainder of this week.
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