For Immediate Release
Chicago, IL – November 20, 2020 – 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: The Boeing Company BA, Southwest Airlines Co. LUV, American Airlines Group Inc. AAL, United Airlines Holdings, Inc. UAL and Delta Air Lines, Inc. DAL.
Here are highlights from Thursday’s Analyst Blog:
Boeing's 737 MAX to Fly Again: What Awaits U.S. Airlines?
After remaining grounded since Mar 2019, things are finally looking up for the seemingly ill-fated Boeing's 737 MAX aircraft. Following its twin crashes in different parts of the world that killed a total of 346 people on board at an interval of barely a few months, the Federal Aviation Administration (FAA) gave the green signal to the aircraft to take to the skies. Notably, the beleaguered aircraft was under scrutiny and underwent several software and other changes ever since the ban on flying was imposed 20 months ago.
Can Boeing 737 MAX Planes Fly Immediately?
Even though cleared by the U.S. air safety agency, it does not mean that the aircraft will resume operations immediately. The FAA asked Boeing, the manufacturer, and the airlines that fly the model to make specific software-related alterations to its flight control system, which is blamed for the deadly mishaps. Moreover, the MAX operators have to provide more stringent pilot training per a BNN Bloomberg report.
Moreover, the U.S. safety agency’s decision is reportedly applicable to the United States. Air safety agencies in certain other parts of the world are conducting their own reviews pertaining to the struggling aircraft. Therefore, the Boeing 737 Max model will remain grounded in some places unless those review processes are completed.
What the Decision Means for U.S. Airlines
Even before the coronavirus pandemic struck in the first quarter of this year, airline stocks in the United States with Boeing’s737 MAX aircraft in their fleet, suffered huge revenue losses due to the grounding order. Notably, Southwest Airlines, American Airlines and United Airlines have Boeing's 737 MAX planes in their fleet. However, Delta Air Lines is the only major U.S. airline not to fly the 737 MAX planes. Prior to the grounding, Southwest Airlines, American Airlines and United Airlines had 34, 24 and 14 such jets in their fleet, respectively.
Following the FAA's decision, American Airlines will be the first U.S. carrier to restart its commercial flight services using Boeing's 737 MAX jets. This Fort Worth, TX-based carrier, currently carrying a Zacks Rank #4 (Sell), will start operating the jets from Dec 29, 2020 on the Miami -New York route. Maintaining its pro-customer stance, management affirmed that passengers won’t be compelled to fly on the aircraft grappling with issues. In a letter to American Airlines’ team members, COO David Seymour and the operations leadership team stated that “If a customer prefers to not fly on this aircraft, we’ll provide flexibility to ensure they can be easily re-accommodated.”
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Southwest Airlines’ Chairman and CEO Gary Kelly was quoted saying, "There is much work to be done before our Max aircraft will resume service, which we estimate will likely take place no sooner than the second quarter of 2021”. United Airlines does not expect to fly passengers on the Boeing 737 MAX aircraft before the first quarter of 2021. This Chicago-based carrier believes that nearly 1,000 hours of work must be done on each such jet before it is pressed into service.
Even though the FAA cleared the Boeing 737 MAX aircraft, we do not expect a significant uptick in its traffic for the concerned U.S. carriers, at least immediately on returning the planes to commercial services. Passengers are likely to be initially skeptical about the safety of flying on the jets. Although only time will tell us about the exact impact of the resumption of these jets on the respective carriers’ results, we advise investors to watch the space for further updates on this relevant issue.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>
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Southwest Airlines Co. (LUV) : Free Stock Analysis Report
The Boeing Company (BA) : Free Stock Analysis Report
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