Airline Stock Roundup: GOL Reports Q3 Loss, LUV, RYAAY & SKYW in Focus
In the past week, Latin American carrier Gol Linhas Aereas Inteligentes GOL reported a loss for third-quarter 2020 as passenger revenues were way below the year-ago levels despite the recent improvement in travel demand. Again, due to the coronavirus-induced disruptions that diminished air travel, European low-cost carrier Ryanair Holdings RYAAY suffered a loss in the second quarter of fiscal 2021 (ended Sep 30, 2020).
Coronavirus-led low travel demand also caused a 63.1% year-over-year plunge in the regional carrier SkyWest’s SKYW third-quarter 2020 earnings. Further, tepid passenger revenues induced losses for the likes of American Airlines AAL, JetBlue Airways JBLU and Southwest Airlines LUV in the September quarter as mentioned in the previous week’s write-up.
Synopsis of the Past Week’s Top Stories
1. Gol Linhas incurred a loss (excluding 89 cents from non-recurring items) of 91 cents per share in the third quarter of 2020, wider than the Zacks Consensus Estimate of a loss of 80 cents. Net operating revenues of $181.4 million also missed the Zacks Consensus Estimate of $188 million. Moreover, the top line declined significantly year over year with passenger revenues plummeting 74.9% on a year-over-year basis due to suppressed air-travel demand amid coronavirus concerns. For the fourth quarter, Gol Linhas anticipates capacity to double in the third quarter.
2. Ryanair, carrying a Zacks Rank #4 (Sell) currently, incurred a loss (excluding $1.08 from non-recurring items) of 12 cents per share in the second quarter of fiscal 2021, narrower than the Zacks Consensus Estimate of a loss of 26 cents. Quarterly revenues of $1,228.4 million also surpassed the Zacks Consensus Estimate of $1,174.1 million but plunged more than 60% year over year due to the 62% decline in traffic. Ryanair expects its traffic to be approximately 38 million in fiscal 2021.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3. SkyWest's third-quarter 2020 earnings per share of 66 cents surpassed the Zacks Consensus Estimate of 9 cents. However, earnings declined 63.1% year over year due to coronavirus-induced low air-travel demand. Moreover, quarterly revenues of $457.5 million tanked 39.8% year over year but surpassed the Zacks Consensus Estimate of $426.8 million. The COVID-19 pandemic caused a significant cut in the number of scheduled flights resulting in the year-over-year downside.
4. In an expansion update, Southwest Airlines announced that it will operate flights to five destinations from Chicago's O'Hare International Airport starting Feb 14, 2021. The destinations are Nashville (four times a day), Baltimore/Washington (four times daily), Denver (six times a day), Dallas (Love Field: four flights daily) and Phoenix (twice a day). On Mar 11, 2021, the carrier will start serving its fourth destination in Colorado. The new location is Colorado Springs.
Performance
The following table shows the price movement of major airline players over the past week and during the past six months.
The table above shows that most airline stocks have traded in the red over the past week even though the losses were muted in nature. Consequently, the NYSE ARCA Airline Index was almost flat over the past week. Over the course of the past six months, the NYSE ARCA Airline Index has appreciated 27.8%.
What’s Next in the Airline Space?
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Southwest Airlines Co. (LUV) : Free Stock Analysis Report
JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report
Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report
Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
SkyWest, Inc. (SKYW) : Free Stock Analysis Report
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