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The Zacks Analyst Blog Highlights: American Airlines Group, Southwest Airlines, United Continental Holdings, Spirit Airlines and JetBlue Airways

Zacks Equity Research

For Immediate Release

Chicago, IL – May 11, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include American Airlines Group (NASDAQ: AAL – Free Report ), Southwest Airlines (NYSE: LUV – Free Report ), United Continental Holdings (NYSE: UAL – Free Report ), Spirit Airlines (NASDAQ: SAVE – Free Report ) and JetBlue Airways (NASDAQ: JBLU – Free Report ).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

Here are highlights from Wednesday’s Analyst Blog:

Airline Stock Roundup: AAL, LUV, UAL, SAVE, JBLU

The past week saw airline heavyweights like American Airlines Group (NASDAQ:AAL – Free Report ), Southwest Airlines (NYSE: LUV – Free Report ) and United Continental Holdings (NYSE: UAL – Free Report ) revealing their respective traffic data for April. American Airlines’ figures were very impressive, which naturally impacted the stock positively. Also, the International Air Transport Association (IATA) revealed impressive traffic data for March.

Spirit Airlines (NASDAQ: SAVE – Free Report ) was the latest carrier to face customer dissatisfaction as it had to cancel multiple flights due to pilot unrest. The past week also saw an expansion-related update from JetBlue Airways (NASDAQ: JBLU – Free Report ). Transportation - Airline Industry 5YR % Return

(Read the last Airline Stock Roundup for May 03, 2017 ).

Recap of the Past Week’s Most Important Stories

1. American Airlines’ traffic (measured in revenue passenger miles or RPMs) touched record levels in April. The metric improved 3.1% on a year-over-year basis to $18.6 billion. Consolidated capacity (or available seat miles/ASMs) inched up 0.8% to $22.6 billion.

Moreover, load factor or the percentage of seats filled by passengers increased to 82.2% from 80.4% in Apr 2016, as traffic growth outpaced capacity expansion. The Zacks Rank #3 (Hold) carrier raised its second-quarter projections with respect to a few key metrics.

Total revenue per available seat mile (TRASM) is now expected to grow in the band 3.5%–5.5% year over year. Pre-tax margin (excluding special items) is estimated in the range of 12%–14%. The company’s prior guidance for TRASM was 3%–5%, while that for pre-tax margin was 11%–13%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

2. Southwest Airlines posted an 8.4% rise in traffic (to around $11.23 billion) in Apr 2017. Available Seat Miles (ASMs) inched up 7.6% to $13.37 billion. Load factor increased 60 basis points (bps) to 84% in Apr 2017, as traffic growth outpaced capacity expansion (Read more: Southwest Airlines Traffic & Load Factor Rise in April ).

3. Consolidated traffic at United Continental increased 7.4% year over year to 17.6 billion. The carrier witnessed growth on both the domestic (7.7%) as well as international (7%) front. On a year-over-year basis, consolidated capacity expanded 4% to 21.1 billion. Load factor increased 260 bps to 83.1% in Apr 2017, as capacity expansion was outweighed by traffic growth. The carrier still expects consolidated passenger unit revenues for the second quarter to increase in the band of 1%–3%.

4. Spirit Airlines became the latest U.S. airline to face passenger dissatisfaction. The low-cost carrier had to cancel nine flights due to issues with its pilots. The incident not only impacted Spirit Airlines’ shares negatively, but also resulted in irate passengers clashing with its employees at Fort Lauderdale-Hollywood International Airport in Florida (Read more: Shares of Spirit Airlines Tumble After Flight Cancellations, Airport Chaos ).

5. The monthly data released by the International Air Transport Association (IATA) revealed a 6.8% year-over-year increase in demand for air travel across the globe for Mar 2017. The rise was attributable to an increase in both international and domestic traffic (measured in revenue passenger kilometres) in the month.

Lower air fares and an improvement in economic conditions contributed to the healthy demand for air travel. The report also revealed a 6.1% rise in capacity (measured in available seat kilometers). The greater increase in traffic than capacity resulted in the load factor increasing 50 bps to 80.4% in March.

7. In a bid to expand further, JetBlue announced the enhancement of its operations between Fort Lauderdale-Hollywood International Airport (FLL) and Mexico City International Airport (MEX) as well as between Orlando International Airport (MCO) and MEX.JetBlue intends to increase its service to four daily roundtrips between Mexico City and the U.S. – two each on the Fort Lauderdale and Orlando routes.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free .

About Zacks Equity Research

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Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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American Airlines Group, Inc. (AAL): Free Stock Analysis Report
Southwest Airlines Company (LUV): Free Stock Analysis Report
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
Spirit Airlines, Inc. (SAVE): Free Stock Analysis Report
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
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