Republic Airways' (RJET) Air Traffic Improves in February - Analyst Blog
Republic Airways Holdings RJET, the parent company of Chautauqua Airlines, Republic Airlines and Shuttle America, disclosed traffic results for Feb 2015. Airline traffic, measured in revenue passenger miles (RPMs), was up 3% year over year at 801 million, on a consolidated basis. Consolidated capacity or available seat miles improved 3% to 1.1 billion during the month.
Load factor (% of seats filled with passengers) was flat year over year at 76% for the month. However, what was disappointing was the 5% decline in block hours (a measure of aircraft utilization) to 54,000. Moreover, the carrier transported 1.54 million passengers in the month, reflecting a 2% decline from the year-ago figure.
For the first two months of 2015, RPMs improved 4% to 1.65 billion. Capacity climbed 6% to 2.26 billion. Block hours declined 2% and load factor slipped 1% to 73%. More than 3.1 billion passengers have been transported by the carrier in the first two months of the year, reflecting a 1% decline from the same period a year ago.
Republic Airways, like all other carriers, is benefiting from low fuel costs. The company, which operates about 1,300 flights daily to 100 cities in the U.S., Caribbean and Canada, reported better-than-expected earnings in the fourth quarter of 2014. Results were aided by low fuel costs (down 43%) in the quarter. The fuel cost per gallon, including into-plane taxes and fees, had decreased 9.4% to $3.28 in the final quarter of 2014.
Even though oil prices are now looking up, we believe prices are unlikely to touch the highs witnessed early last year. Consequently, airline stocks should continue to gain.
Zacks Rank
Republic Airways currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the airline space are Delta Air Lines DAL, Virgin America VA and Southwest Airlines LUV. All the three carriers hold a Zacks Rank #2 (Buy).
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