For Immediate Release
Chicago, IL – December 11, 2013 – Today, Zacks Equity Research discusses the U.S. Airlines, including Boeing ( BA- Free Report), Embraer SA ( ERJ- Free Report), Delta Air Lines Inc. ( DAL- Free Report), JetBlue Airways Corporation ( JBLU- Free Report) and United Continental ( UAL- Free Report).
Service and Fleet Restructuring: Air carriers at large are scrapping flights in many small and unprofitable airports in order to reduce their cost burden that has increased 55% over the period 2006–2013. The companies continue to replace old and depleted airplanes with new and upgraded ones. Though initially expensive, new and improved aircraft are more fuel efficient than the existing ones and will help in lowering operating and maintenance costs.
Over the next 20 years, global airlines are expected to invest in excess of $4 to $5 trillion in fleet development. Apart from the high demand from the oil rich Gulf nations, a major part of the fleet demand will also be driven by China and the continuous expansion of low-budget carriers around the world. For this, the airlines are banking on top aircraft manufacturers such as Boeing ( BA- Free Report), Embraer SA ( ERJ- Free Report) and Airbus.
Over the long run, the carriers aim to replace their old narrow-body jets – A320’s/B757-200/300 – with advanced narrow-body airplanes such as A-321, A320 Neo and the B737 Max, for better service and demand-supply equilibrium.
In October, Delta Air Lines Inc. ( DAL- Free Report) has announced its plan to purchase 40 new jets from European aircraft manufacturer Airbus in a deal worth $5.6 billion. Delta has ordered 10 A330-300 wide body jets and 30 narrow body A321 aircraft to be delivered between 2015 and 2017. Four A330 will be delivered in 2015, with four more scheduled for the coming years and the remaining two for 2017.
In October, JetBlue Airways Corporation ( JBLU- Free Report) entered into an agreement with Airbus to purchase 15 new A321 ceo and 20 new A321 neo aircraft. The carrier has also opted to upgrade the existing order of 8 new A320 ceo and 10 new A320 neo with 8 new A320 ceo and 10 new A321 neo.
Jet Renovation: With passengers demanding comfort and quality service along with proper security, airlines are focusing on aircraft redesigning with new and attractive products and services within the travel plan.
United Continental ( UAL- Free Report) is offering premium flat-bed cabin seats on every transcontinental flight between New York’s John F. Kennedy International Airport and San Francisco/Los Angeles. Further, the aircraft will have 42 Economy Plus seats with additional legroom. This is in addition to flat-bed seats and personal on-demand entertainment system for its premium cabin passengers of long-route international flights. This will also provide flyers an added level of privacy and comfort along with multi-course meals and complementary wine plus personal staff attention.
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