U.S. Markets closed
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Airline Stock Roundup: AZUL's Q2 Loss, SAVE's Tepid Guidance and More

·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

In the past week, Azul AZUL reported wider-than-expected loss per share for second-quarter 2021. However, the loss narrowed from the year-ago quarter’s level with passenger revenues escalating more than 100% year over year as more and more people take to the skies.

Spirit Airlines SAVE also dominated headlines in the past week as it gave a bearish revenue outlook for the September quarter due to multiple flight cancellations following disruptions in the form of inclement weather, technical snags and staff crunch.

Alaska Airlines, the wholly-owned subsidiary of Alaska Air Group ALK, expanded its fleet by exercising the option to acquire 12 more Boeing 737-9 jets, earlier than planned. JetBlue Airways JBLU was also in news when it started operating transatlantic flights between New York and London.

Recap of the Past Week’s Most Important Stories

1. Azul’s second-quarter loss (excluding $3.41 from non-recurring items) of $1.91 per share was wider than the Zacks Consensus Estimate of a loss of $1.53. In the year-ago quarter, loss was $2.38 per share. Total revenues of $321.4 million outperformed the Zacks Consensus Estimate of $302.1 million. The top line jumped more than 100% year over year as air-travel demand improves, courtesy of widespread vaccination programs in Brazil.

Owing to improved air-travel demand, Azul’s consolidated traffic for July surged 253% year over year as reported in last week’s write-up.

Azul currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2. Spirit Airlines’ management announced that adverse weather conditions and airport staffing shortages caused 2,826 flight cancellations in the Jul 30-Aug 9 time frame. This is likely to leave a negative impact of approximately $50 million on its revenues. Spirit Airlines estimates an additional headwind of $80-$100 million on revenues in the third quarter as a result of weakness in bookings. The company expects third-quarter revenues between $885 million and $955 million.

Due to irregular operations, the carrier incurred surplus expenses associated with re-accommodation of customers whose travel plans were hampered. Extra labor expenses also bumped up costs. Adjusted operating expenses for the September quarter are now predicted in the band of $1,030-$1,040 million compared with the previous expectation in the $1,000-$1,010 million range.

3. Alaska Airlines expects 12 additional Boeing jets to be delivered between 2023 and 2024. Following the latest order , Alaska Airlines’ firm order for Boeing 737-9 planes totals 93. Five of these aircraft are currently in service. The 737-9 jets consist of 16 first class seats and 24 premium class seats besides having the ability to carry 178 guests.

4. Ryanair Holdings RYAAY launched 11 routes from the United Kingdom for winter travel. With this, the carrier’s UK Winter 2021 schedule includes a total of more than 2,000 weekly flights to above 400 destinations.

5. JetBlue started operating flights connecting New York’s John F. Kennedy International Airport (JFK) with London Heathrow Airport (LHR) from Aug 12. Following this newly initiated service to the United Kingdom, the carrier now operates in 26 countries. Earlier this month, the United Kingdom opened its borders to fully vaccinated travelers from the United States. JetBlue expects to benefit from pent-up demand for travel between these two countries. The JFK-LHR flights are operational daily in the current month. The service will be available four times a week in September.

Performance

Zacks Investment Research
Zacks Investment Research

The following table shows the price movement of major airline players over the past week and during the past six months.


Image Source: Zacks Investment Research

The table above shows that almost all airline stocks have traded in the red over the past week, inducing the NYSE ARCA Airline Index to decline 6.2% to $86.65 with the Delta variant hurting air-travel demand. Over the course of the past six months, the NYSE ARCA Airline Index has dropped 16.5%.

What’s Next in the Airline Space?

Updates on the impact of the Delta variant on air-travel prospects are likely in the coming days.


 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report

JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report

Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report

Spirit Airlines, Inc. (SAVE) : Free Stock Analysis Report

AZUL SA (AZUL) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research