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Airline Stock Roundup: GOL Reports Q4 Loss, ALK, RYAAY & AAL in Focus

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In the past week, Latin American carrier Gol Linhas AereasInteligentes GOL reported a loss for fourth-quarter 2020 as passenger revenues plummeted 52% year over year due to the pandemic-induced weakness in travel demand. Moreover, the Latin American carrier expects revenues for March-end quarter to decrease 10% sequentially, as a second wave of coronavirus infections in Brazil is further dampening air-travel demand.

However, air-travel demand (particularly for leisure) is improving in the United States as infections decrease and vaccinations gather pace. As an evidence of the improving demand scenario, American Airlines AAL inked a five-year deal with Fareportal, a travel technology company.

In a further evidence of the improving air-travel demand in the United States, Alaska Air Group ALK subsidiary — Alaska Airlines and Hawaiian Holdings’ HA subsidiary, Hawaiian Airlines — issued expansion-related updates in the past week.

Notably, U.S. airline heavyweights like United Airlines UAL and Southwest Airlines LUV had unfurled bullish projections for the first quarter, as mentioned in the previous week’s writeup.

Recap of the Past Week’s Most Important Stories

1. Gol Linhas incurred a loss (excluding 92 cents from non-recurring items) of 90 cents per share in the fourth quarter of 2020, wider than the Zacks Consensus Estimate of a loss of 62 cents. However, in the year-ago period, the company had reported earnings of 43 cents per share. Net operating revenues of $350.6 million also missed the Zacks Consensus Estimate of $397 million. Moreover, the top line plunged 62.1% year over year. For the first quarter of 2021, Gol Linhas anticipates capacity to be 55% of the first-quarter 2019 levels.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2. In a bid to meet the anticipated surge in air-travel demand during summer, Alaska Airlines announced that it will commence a new seasonal non-stop service between Anchorage and Minneapolis-St. Paul in June. The added service indicates that Alaska Airlines will now offer more non-stop flights from Alaska than any other airline. Commencing Jun 19, the Anchorage to Minneapolis flight will operate only on Saturdays and Sundays.

3. In response to customer demand for travel to Hawaii, Hawaiian Airlines, has launched a non-stop service connecting Ontario, CA with Honolulu, HI. The service, which is currently operational five times a week, will be available daily, beginning May 24, owing to the anticipated increase in demand during the summer season.

Also, to cater to the anticipated rise in travel demand during summer, Hawaiian Airlines has decided to operate flights on the Phoenix-Maui route, from May 21 through Aug 15.

4. With air-travel demand gathering steam in the United States, American Airlines renewed its partnership with Fareportal, the travel technology company that powers leading online travel agencies. Notably, the two entities signed a five-year agreement, which highlights Fareportal's important role in supporting American Airlines’ new Main Plus offer. Remarkably, benefits under Main Plus tickets include complimentary access to Main Cabin Extra and preferred seats if available, preferred boarding (Group 5) and an additional free checked bag. We note that Fareportal and American Airlines have been partners since 2012.

5. Ryanair Holdings RYAAY announced an expanded U.K. summer 2021 schedule despite concerns over rising coronavirus cases across several European countries. The airline attributed this decision to the successful vaccine roll-out in the U.K., based on which it expects government to allow travel during the summers.

Ryanair’s CEO Michael O’Leary stated, “The UK government has implemented a very successful vaccine rollout programme, and is on track for a re-opening of EU short-haul travel this summer.”

O’Leary reportedly anticipates countries across Europe, including the U.K., to stop "locking people down" from June despite media "hysteria" over whether or not travel will be allowed during the summer holidays. As part of the expanded schedule, Ryanair will operate more than 2,300 weekly flights across 480 routes. The airline will add 26 new routes to popular holiday destinations in France, Greece, Italy, Portugal and Spain.

The announcement comes close on the heels of a new coronavirus law, which would penalize anyone, who leaves the U.K. without a reasonable reason, with a fine of £5,000. The new law, set to go into effect next week, could last until the end of June.

Performance

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

The table above shows that all airline stocks traded in the red over the past week, resulting in the NYSE ARCA Airline Index declining 11.5% to $100.92. Over the course of past six months, the NYSE ARCA Airline Index appreciated 81.3%.

What’s Next in the Airline Space?

Stay tuned for usual news updates.

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Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report

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