U.S. Markets open in 2 hrs 16 mins
  • Gold

    1,793.30
    +11.40 (+0.64%)
     
  • EUR/USD

    1.1646
    +0.0015 (+0.1281%)
     
  • 10-Yr Bond

    1.6760
    0.0000 (0.00%)
     
  • Vix

    14.98
    -0.51 (-3.29%)
     
  • GBP/USD

    1.3798
    +0.0003 (+0.0207%)
     
  • USD/JPY

    113.7850
    -0.2030 (-0.1781%)
     
  • BTC-USD

    63,376.08
    -2,309.27 (-3.52%)
     
  • CMC Crypto 200

    1,504.90
    -29.75 (-1.94%)
     
  • FTSE 100

    7,230.85
    +40.55 (+0.56%)
     
  • Nikkei 225

    28,804.85
    +96.27 (+0.34%)
     

American Airlines (AAL) Slips Despite Upbeat May Bookings

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 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.

American Airlines Group AAL has witnessed continued improvement in bookings as more Americans get vaccinated and return to the skies. The airline stated that its seven-day moving average of net bookings (as of Jun 2) was approximately 90% of the level in the comparable period of 2019.

Despite this bullish sentiment, the company did not make commensurate improvements in its second-quarter guidance issued in April. This might have played on investors’ minds, causing shares of American Airlines to decline 3.4% at the close of business on Jun 3.

In a SEC filing dated Jun 3, the carrier stated that its domestic load factor (percentage of seats filled with passengers) in May was around 84% and greater than 88% over the Memorial Day holiday. The airline expects the “strength in bookings to continue through the end of the second quarter and into the third quarter”, provided current demand trends sustain. Moreover, it anticipates “leisure yields to approach or exceed the corresponding 2019 levels during the peak summer travel period.”

American Airlines Group Inc. Price

American Airlines Group Inc. Price
American Airlines Group Inc. Price

American Airlines Group Inc. price | American Airlines Group Inc. Quote


On a further positive note, American Airlines is seeing gradual increase in demand among small- and medium-sized enterprises, and some large corporate customers, although business travel demand continues to be suppressed.

Thanks to strong summer bookings, American Airlines, that has burned millions of dollars in cash since the pandemic began, finally generated cash in May. It expects a liquidity of more than $20 billion at the end of the second quarter, compared with its previous guidance of $19.5 billion.

American Airlines maintains its second-quarter system capacity (total available seat miles) forecast at a decline of 20-25% from the comparable 2019 level. Additionally, total revenues are still anticipated to fall approximately 40% from the 2019 level.

Zacks Rank & Key Picks

American Airlines carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are Covenant Logistics Group CVLG, C.H. Robinson Worldwide CHRW and United Parcel Service UPS. While Covenant Logistics and C.H. Robinson sport a Zacks Rank #1 (Strong Buy), UPS carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Covenant Logistics, C.H. Robinson and UPS have rallied more than 66%, 15% and 98% in a year’s time, respectively.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


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

United Parcel Service, Inc. (UPS) : Free Stock Analysis Report

C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report

American Airlines Group Inc. (AAL) : Free Stock Analysis Report

Covenant Logistics Group, Inc. (CVLG) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research