UAL - United Airlines Holdings, Inc.
Chart Events
Momentum
Performance Outlook
- Short Term2W - 6W
- Mid Term6W - 9M
- Long Term9M+
| Previous Close | 28.04 |
| Open | 28.19 |
| Bid | 29.49 x 900 |
| Ask | 29.46 x 800 |
| Day's Range | 27.95 - 30.29 |
| 52 Week Range | 17.80 - 96.03 |
| Volume | 44,238,725 |
| Avg. Volume | 39,341,133 |
| Market Cap | 8.539B |
| Beta (5Y Monthly) | 1.49 |
| PE Ratio (TTM) | 7.40 |
| EPS (TTM) | 3.97 |
| Earnings Date | Jul 14, 2020 - Jul 20, 2020 |
| Forward Dividend & Yield | N/A (N/A) |
| Ex-Dividend Date | Jan 07, 2008 |
| 1y Target Est | 48.71 |
Fair Value
Related Research
- Investor's Business Daily
Airline Stocks Rally As Delta Tries To Reshuffle Pilots After Cuts Elsewhere
Delta Air Lines and its pilots union are reportedly trying to avoid furloughs for around 2,300 pilots while reassigning thousands of others.
- Bloomberg
We All Might Be Flying in Planes Again Soon
(Bloomberg Opinion) -- Covid-19 became a pandemic because airplane passengers carried the new coronavirus with them around the world. As that became clear, airlines grounded nearly all of their fleets, governments issued travel restrictions and mandatory quarantines, and tourist attractions and conferences closed down. With no reason to fly, a quick recovery for air travel seemed unlikely. Warren Buffett dumped his airline stocks, claiming that the “world has changed.”Passengers also wouldn’t feel safe packed inside a metal tube for hours, would they?Happily for the industry, if not for the climate, the seemingly insurmountable barriers to air travel have begun to look less daunting. “We believe the worst is behind us, and we’re on the uptick,” American Airlines Group Inc.’s boss, Doug Parker, said after a surge in travel over the U.S. Memorial Day holiday weekend.Investors have taken notice. The Bloomberg Americas Airlines stocks index has rebounded by almost one-third from the mid-May low, and European carriers have made similar gains. Shares in German tour operator Tui AG have risen too.Such optimism feels jarring when airlines, American Airlines included, are poised to cut thousands of jobs. Most are still burning huge amounts of cash. Deutsche Lufthansa AG needs a 9 billion-euro ($10 billion) bailout, and Latam Airlines Group SA joined Latin American peer Avianca Holdings SA in filing for bankruptcy last week.But Parker is probably right to expect a continued recovery, at least on domestic and short-haul routes. This won’t be enough to put debt-laden airlines on a secure footing, and a full demand recovery probably won’t happen for a couple more years. But, right now, a desperate industry will take any good news it can get. The rigorous hygiene measures airlines have announced should go a long way toward restoring passenger confidence. European budget carrier Ryanair Holdings Plc expects to operate at 40% of normal capacity from July, and the way bookings are shaping up suggests those planes will probably be at least half full. EasyJet Plc sees “encouraging” trends and notes that winter bookings are higher than usual for this time of year, although part of that may be because people have refund vouchers to use and are rebooking cancelled trips. Ryanair’s extensive summer flight schedule had seemed premature a couple of weeks ago, but the travel restrictions that kept Europeans from moving around the continent are being relaxed. Starting in July, Spain is set to drop its requirement for international arrivals to quarantine for 14 days. Britain imposed a similar rule but is under immense pressure to abandon it. Travel between Europe and the U.S. will take longer to open up, but even on this there are encouraging signs of political will to get people flying again. A month ago, United Airlines Holdings Inc.’s chief executive officer, Scott Kirby, lamented that there wouldn’t be a recovery in flying until attractions like Disney World and the Paris museums were open again.Well, they will be soon. It’s already possible to visit the Acropolis in Athens and St Peter’s Basilica in Rome. Paris’s parks and museums are set to reopen from June. The French capital is usually swamped with tourists at this time of year, so there’s an incentive for travelers to get there first. Walt Disney World expects to reopen its Florida park from July, albeit with compulsory face masks and a ban on hugging your favorite Disney character.I’ve written before about how things like wearing masks and having to ask permission to use the toilet will make flying even less enjoyable. But these measures may make passengers feel safer. For example, while the gowns and other personal protective equipment issued to Emirates’ cabin crew are a little intimidating, they’re likely to put some nervous flyers at ease.As with SARS almost two decades ago, there are understandable concerns about catching coronavirus within the aircraft cabin, most likely from someone seated close by. The evidence isn’t comprehensive or conclusive, but so far there are surprisingly few documented cases of this happening with Covid-19. Airline industry body IATA says it knows of only one case where a person transmitted the virus to more than one person on board. Not surprisingly, plane manufacturers Airbus SE and Boeing Co. are studying the subject intensively. There are other plausible reasons why flying might be safer than you’d think: The air is filtered and frequently replenished from outside, seats act as somewhat of a barrier and passengers don’t move around the cabin much. Singing, yelling and talking loudly — contributors to so-called super-spreader infection events — are a big faux pas when you fly. Many passengers would still prefer the middle seat to be empty, but as I’ve written before, unless ticket prices rise, that would severely hamper airlines’ ability to break even.Of course, the longer someone’s on board, the greater the chance they’re exposed to infection. Hence people may feel comfortable flying domestic and short-haul before they’re willing to fly halfway around the globe.Companies will probably take longer to get comfortable with the risk (and potential liability) of their employees flying for business. About half the corporate clients American Airlines surveyed still have a travel ban, although that’s down from two-thirds at the peak of the crisis. Millions of potential passengers have also lost their jobs and won’t feel able to splash out on holidays.And then there are the psychological scars from the prolonged lockdown. Being outside now feels a lot safer than being in any kind of confined space. A staycation in a local Airbnb might feel preferable to getting on a plane.For those willing to take the risk, and who can find adequate travel insurance, a rare opportunity awaits. Want to see Venice without the crowds? Now’s your chance.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
U.S. Cases Rise; Trump G-7 May Draw Fewer Leaders: Virus Update
(Bloomberg) -- New York is targeting “hotspots” as New York City prepares to reopen in less than two weeks. U.S. cases increased 1.7%, faster than the one-week daily average.Attendance at a June U.S.-hosted meeting of world leaders could shrink because of the outbreak. Siemens Healthineers received U.S. emergency authorization for a coronavirus antibody test.European Union leaders urged the U.S. to reverse a decision to quit the World Health Organization. Italian cases trended lower as the government starts to allow travel, despite objections over letting people leave the hard-hit region near Milan.Key Developments:Virus Tracker: Cases top 6 million; deaths over 367,000Indonesia to open malls, entertainment sites as cases riseTexas shows the world how to reopen cautiously, for nowChinese vaccine expected to begin mass output soonRace to the freezer: Europe’s food glut has nowhere to goPizza chains have windfall on surge in takeout, deliveriesBaseball on ESPN: Korea’s major league plays through outbreakSubscribe to a daily update on the virus from Bloomberg’s Prognosis team here. Click VRUS on the terminal for news and data on the coronavirus. For a look back at this week’s top stories from QuickTake, click here.U.K., France Mull G-7 as Germany Skips (5 p.m. NY)The Covid-19 outbreak may deter German Chancellor Angela Merkel from attending a Group of Seven leaders meeting in the U.S., but other leaders are still in talks with the host, President Donald Trump.Trump spoke with French President Emmanuel Macron on Saturday with “progress on convening the G-7” among the topics, the White House said. On Friday, U.K. Prime Minister Boris Johnson and Trump “discussed the importance of leaders meeting in the U.S. in person, if possible,” according to Johnson’s office. A Merkel spokesman on Saturday said “she’s unable to confirm her personal participation” given the current state of events.The meeting was planned for Trump’s Doral resort in Florida, was moved to Camp David then became a video conference because of the pandemic. Trump is pushing the G-7 leaders to travel to the U.S. for an in-person meeting.U.S. Cases Rise 1.7%, Above Week’s Average (4 p.m. NY)U.S. cases increased 1.7% from the same time Friday, to 1.76 million, according to data collected by Johns Hopkins University and Bloomberg News. The national increase exceeded the average daily increase of 1.3% for the past week and was the biggest percentage rise since May 22. Deaths climbed 1.2% to 103,389.New York reported 1,376 new cases, for a total of 369,660, with 67 deaths -- the same as Friday and the fifth day of fatalities under 75. Deaths totaled 23,848.New Jersey had 910 new cases, pushing the total to 159,608, with 113 new deaths for a total of 11,634, Governor Phil Murphy reported.California reported 2,992 new cases, for a total of 106,878, and added 88 deaths, with the fatality count at 4,156.Pennsylvania reported 680 new cases, for a total of 71,415, and 73 new deaths, to total 5,537, the state health department said.Florida’s cases rose 1.7% to 55,424 and deaths rose to 2,447, the health department said.Greece Allows More Flights from Mid-June (3:30 p.m. NY)Greece will allow visitors from more nations, including the U.S. and U.K., to arrive at Athens and Thessaloniki airports starting June 15, the Foreign Ministry said. After July 1, flights can land at all Greek airports.The government will use the European Union Aviation Safety Agency’s list of airports to determine testing for arriving passengers. If travel originates at an airport not on the affected-area list, then visitors are subject to random tests, the Foreign Ministry said. If the journey begins at an airport on the EASA list, then visitors who test negative will self-quarantine for seven days and if positive will be under supervised quarantine for 14 days.Greece will reopen borders with Albania, Bulgaria and North Macedonia on June 15, the Foreign Ministry said with visitors subject to random tests. Arrivals by sea will begin July 1.French Cases Inch Higher (2:10 p.m. NY)France reported 57 new deaths, raising the total to 28,771, based on hospital data, with reporting of nursing-home fatalities delayed to Tuesday. New cases climbed by 1,828, or 0.8%, to 225,898.FDA Authorizes Siemens Antibody Test (2:10 p.m. NY)Siemens Healthineers AG received U.S. Food and Drug Administration emergency use authorization for a coronavirus antibody test, used to identify recent or prior infection in humans. The company had expected the test to be available by late May and aims to produce more than 50 million tests a month starting in June.N.Y. Targets NYC ‘Hotspots’ (2 p.m. NY)Governor Andrew Cuomo said the state plans to get New York City reopened by focusing on “hotspots” -- neighborhoods where positive cases can be nearly 50% and are largely in minority communities. The city average rate is about 20%.“We have work to do but we’ll still get it done by June 8,” he said.Cuomo also signed a law to compensate the families of hundreds of essential workers who have died in the outbreak.Italy Cases on Declining Trend (12:01 pm NY)Italy reported 416 new cases, up from 516 a day earlier, confirming a declining trend as the total reached 232,664. Total deaths rose to 33,340. The government confirmed plans to allow travel between regions starting June 3 even as some regional governors opposed letting people from the hard-hit Lombardy region move freely.N.Y. Daily Deaths Unchanged (11:45 a.m. NY)New York reported 67 new deaths, Governor Andrew Cuomo said at a Saturday press conference. The figure is the same as reported on Friday and the fifth straight day below 75 fatalities. The state reported 1,376 new cases, for a total of 369,660.U.K. Permits Live Sports Events (11:30 a.m. NY)The U.K. will allow live sports events, without spectators, and further relax restrictions on physical exercise starting Monday as the country eases lockdown measures.Horse racing will be allowed behind closed doors, with other sports like soccer, rugby, cricket, golf and snooker to follow, but without fans, Culture Secretary Oliver Dowden said at a press conference. “British sports recovery has begun,” Dowden said.England’s Premier League plans to resume matches on June 17, after consulting with the clubs, players and managers, Chief Executive Richard Masters said after the government announcement.Spain Deaths Rise (11:25 a.m. NY)The Spanish health ministry said total coronavirus cases increased by 271 to 239,228 in the past 24 hours. Total fatalities rose to 27,125 with 43 new deaths reported in the past seven days.Somalia Votes in 2021, Despite Outbreak (10:30 a.m. NY)Somalia will push ahead with elections in early 2021, Prime Minister Hassan Ali Kheyre said after a cabinet meeting, removing doubt that the spread of Covid-19 will delay the vote.The Horn-of-Africa nation is seeking debt relief as the pandemic adds to its woes, from an insurgency to locusts. It has almost 2,000 cases and a health system ill-equipped to handle the outbreak.South Africa Allows Domestic Flights (10:20 a.m. NY)South Africa will permit air travel from four main airports starting Monday as the nation eases lockdown measures. Limited domestic flights will be allowed for business, and passengers must give a reason, Transport Minister Fikile Mbalula said in a televised briefing on Saturday.India to Ease Lockdown in Stages (8:52 a.m. NY)India announced a phased lifting of the nationwide lockdown by allowing malls, restaurants and places of worship to open from June 8, the interior ministry said in a statement.The country, which had enforced sweeping and strict stay-at-home orders from March 25, will limit the stringent rules to areas that have a large number of active cases. Authorities will decide to open schools and colleges in July, while international air travel will resume in the final phase. The exit plan comes even as India has been unable to flatten its curve despite the restrictions which have left its already troubled economy in deep disrepair.EU Urges U.S. to Reconsider WHO Decision (8:24 a.m. NY)The European Union called on the U.S. to reconsider its decision to terminate its relationship with the World Health Organization, which President Donald Trump has accused of being too deferential to China.“Global cooperation and solidarity through multilateral efforts are the only effective and viable avenues to win this battle the world is facing,” according to a joint statement Saturday from European Commission President Ursula von der Leyen and the bloc’s chief foreign envoy, Josep Borrell. “We urge the U.S. to reconsider its announced decision.”Portugal’s Virus Cases Slow (8:04 a.m. NY)Portugal reported 257 new coronavirus cases on Saturday, taking the total to 32,203, after recording more than 300 infections in each of the two previous days, the government said. The increase in new cases has been mostly in the greater Lisbon area and led the government on Friday to delay the planned reopening of malls in that region. The number of cases in intensive care units fell to 63 on Saturday, remaining at the lowest level since March.Macau’s Economy Shrinks by Almost Half (6:46 a.m. NY)Macau’s economy posted a deeper contraction in the first quarter as lockdown measures introduced to contain the virus outbreak hit revenue from gambling, hotels, and tourism.Gross domestic product in Macau plummeted 48.7% in the first three months of 2020, according to the city’s statistics department. That is the fifth straight quarterly decline.Belgium’s Socialists Propose $41.7 Billion Stimulus (6:14 a.m. NY)Paul Magnette, the head of Belgium’s Socialist party, proposed a 37.6 billion-euro ($41.7 billion) stimulus package to combat the economic toll of the global pandemic, according to an interview with Le Soir. The aid would target catering, cultural and health-care industries, he said.Iran Reports Fewer New Cases (6:12 a.m. NY)Iran’s infection tally rose to 148,950 as the daily number of new cases dropped to 2,282 from 2,819 on Friday, the highest daily number of cases in eight weeks. The virus death toll reached 7,734 with 57 more deaths overnight.S&P Sees Abu Dhabi, Bahrain Economies Shrinking (5:20 p.m. HK)Abu Dhabi’s economy will contract 7.5% this year, S&P Global Ratings said, citing lower oil production and the pandemic.Bahrain’s economy will shrink 5% this year because of low oil prices, although government stimulus measures should provide some support, S&P said. The ratings company expects Bahrain’s economy to rebound in 2021 as oil prices recover and regional activity increases.Indonesia Gears Up for Post-Holiday Return (5:02 p.m. HK)Indonesia’s capital Jakarta is anticipating one million vehicles will enter the city as people return from Eid al-Fitr holidays. Traffic, including motorcycles, is projected to peak from Saturday to Monday, according to a Cabinet Secretariat statement. While the figure is lower compared to the 2.8 million vehicles recorded last year, the flow of so many travelers is raising concern as the nation’s coronavirus cases grow.Indonesia now has the highest coronavirus death toll in Southeast Asia, with 1,573 people succumbing to the disease as of Saturday. New cases have more than doubled in May, with the total reaching 25,773.Uzbekistan Extends Lockdown (3:36 p.m. HK)The Uzbek government has decided to extend lockdown restrictions until June 15. Central Asia’s most populous nation has confirmed 3,513 cases of infection of the coronavirus, with 14 deaths and 2,728 recoveries.Singapore Reports 506 New Cases (3:30 p.m. HK)Singapore reported 506 new infections as of Saturday, according to a statement from its Health Ministry. A vast majority of the additional infections are of work permit-holders who live in foreign workers’ dormitories, according to the statement. The ministry is expected to provide additional details in the evening, it added.Chinese Vaccine Expected to Begin Mass Output This Year (3:25 p.m. HK)A front-running Covid-19 vaccine being developed in China is expected to be available as soon as the end of this year, according to a report published in the official Wechat account of the State-owned Assets Supervision and Administration Commission.The vaccine, jointly developed by the Beijing Institute of Biological Products and China National Biotec Group Co., has completed phase II testing and may be ready for the market at the end of this year or early next year, said the report.The production line for the vaccine will be fully disinfected and closed in preparation for output to start Saturday, and will have a manufacturing capacity of 100 million-120 million vaccines each year.Iran Lifts Restriction on Shopping Hours (2:26 p.m. HK)Iran has lifted a restriction on the operating hours of shopping malls in the latest step of reopening the economy. Meanwhile, all mosques in the country will be open to worshipers for daily prayers three times a day, President Hassan Rouhani said in a national coronavirus taskforce briefing broadcast on state TV.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- GuruFocus.com
Warren Buffett: Know When to Cut Your Losses
Bad businesses usually can’t be rescued by good managers Continue reading...
- Zacks
United Airlines to Cut 13 Officer Roles Amid COVID-19 Woes
United Airlines'(UAL) job cuts are part of its cost-cutting measures. The carrier had earlier warned of a 30% reduction in its administrative staff.
- Zacks
Why Is United (UAL) Down 5.2% Since Last Earnings Report?
United (UAL) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
- Insider Monkey
Hedge Funds Have Never Been Less Bullish On United Airlines Holdings (UAL)
The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. […]
- Barrons.com
Casinos and Theme Parks Are Reopening This Summer. It Could Be Good News for Airlines.
Visits to hotels, casinos, and vacation websites are picking up—signs that a recovery in leisure air travel may be under way as the summer vacation season kicks off.
- Benzinga
With Eye On Rebound, United Looks For Alternative To Furloughs
Domestic airlines this week announced plans to permanently eliminate large numbers of management and administrative jobs as a prelude to even larger reductions in frontline forces. But United Airlines (NASDAQ: UAL) CEO Scott Kirby dismissed furloughs as an a primary option, saying they are a temporary solution that undermines the ability to capitalize on growth opportunities when coronavirus fears subside and travel takes off again.No one knows when strong demand will return, so United's priority is to create an extremely flexible cost structure centered on labor that allows the company to make money at any level of traffic, Kirby told investors Thursday. The company is negotiating with unions to adjust contracts to a new world in which passenger business could take years to recover to 2019 levels."The reality is our contracts were not designed for a world where demand might be down 50% or 70%. They were designed for a recession where demand is down 5% and you furlough 5% of the people," the new CEO said in a virtual presentation to the Bernstein conference. "If you furlough tens of thousands of people, the bounce back is almost impossible. You lose the experience, you lose the people, all the training that has to occur," he said. "And so finding a solution where we don't furlough is really about the bounce back. It's not as much about getting through the crisis as it is about bouncing back."From the beginning, United stood out in not sugarcoating the severity of the coronavirus travel restrictions on airline finances and jobs. The company slashed passenger operations, as well as discretionary and capital expenditures, to the bone; borrowed heavily from capital markets to increase liquidity; and encouraged tens of thousands of employees to take voluntary, unpaid leave for various lengths of time. United, which lost $1.7 billion in the first quarter, also warned early on that government coronavirus relief to protect industry jobs through September was a temporary salve and that mass layoffs were inevitable as airlines restructured into smaller entities. The Chicago-based carrier is receiving $5 billion in U.S. assistance. Two-thirds of the amount is in direct grants, but the money covers slightly more than half of the airline's $6.5 billion in salary and benefit expenses over a six-month period.In mid-May, United began offering voluntary separation agreements in an effort to reduce management and administrative headcount by more than 30%. The deals include some continuation of pay, access to medical benefits and travel privileges. Midlevel employees are also being forced to take 20 unpaid days off and use up 50% of vacation by the end of September.On Thursday, American Airlines announced a similar 30% reduction in middle-management and support staff, as well as benefits.And in an internal memo shared with the media on Wednesday, Delta Air Lines CEO Ed Bastian said the company will soon begin offering eligible employees an enhanced early retirement package and a voluntary separation for most employees. Delta is also discussing with labor representatives a similar early retirement plan for pilots, details of which could be released next week."The only thing we can be sure of today is that the more people choose to depart voluntarily, the greater our chances for avoiding furloughs this fall," he said.Prosperity Over SurvivalKirby said an improvement in labor relations under Oscar Munoz, who retired as CEO earlier this month, and the company's openness about the slow market recovery from the pandemic make it easier to achieve union concessions."We've been upfront and realistic with our people. That transparency goes a long way," he said. "People may not like the message, but, by and large, they appreciate the ... honesty. And that sets the groundwork for actually getting deals done. If you're saying everything is rainbows and sunshine and then you come in one day and say, ‘Oh, but now we need to furlough 30% of the people,' that's a really, really hard conversation."United's goal is a temporary workforce accommodation that will enable the company to prosper again.Being able to jump on the recovery and not only defend the existing markets we have, but to take advantage of the fact that not everyone is going to be able to bounce back quickly" will be an advantage, Kirby said. "We know what we can do under the existing contracts to survive. The negotiations with the unions are not about the survival, they are absolutely about the bounce back."Some industry observers say some U.S. airlines will be forced into bankruptcy, but Kirby, who was United's president for four years, ruled that out as a viable option."It would be the absolute last thing we could do. I can't imagine why people think that's a good business strategy. ... It's worse for shareholders, for creditors, for employees. It's worse for every constituent that we have and that is not even remotely in the plans at United Airlines," he said. American Airlines (NASDAQ: AAL) CEO Doug Parker a day earlier said bankruptcy is not an option even though the carrier came into the crisis with a large debt burden.In the past two weeks South American carriers Avianca and LATAM Airlines have moved to restructure under U.S. bankruptcy laws. Smaller airlines have also gone into receivership or shut down, and others warn they could too without bailouts from national governments.United stands to lose money after lending Avianca money to facilitate a joint venture.Once the immediate crisis is past, the third-largest airline by passenger volume will focus on repairing its balance sheet. United's goal is to bring its cash burn down to $20 million by the fourth quarter and be cash flow-breakeven soon after. Spare cash will go toward paying down debt rather than capital expenditures.Kirby said the airline will spend nothing for new aircraft for the next two or three years, with general capital expenditures annually ranging between $500 million and $1 billion, down from about $4.7 billion total in 2019. Instead of retiring some planes at 15 years of age and selling off the parts, United will take the less risky approach of holding onto aircraft until they are 20 or 25 years old even if they are less efficient to operate."I think it's going to be awhile before we're taking new deliveries" or leasing aircraft, the CEO said, adding that he's going to wait out the market before deciding on whether to retire any aircraft types from the fleet.See more from Benzinga * Appeals Court Revives CRST's Driver-Poaching Lawsuit * ZIM's Loss drops as EBITDA and Cash Flow Jump * New Mexico trucking attorney nominated for seat on federal bench(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
- Reuters
United Airlines cutting 13 top jobs, adding international flights in July
Chicago-based United said it is increasing trans-Atlantic service from Washington, D.C. and San Francisco to cities across Europe in July thanks to a modest rise in demand, and re-starting service to Tokyo-Haneda, Hong Kong, Singapore and Seoul.
- Zacks
Should You Buy Airline Stocks & ETF Upon Takeoff?
The Airline ETF has seen enormous investor interest of late, find out why.
- InvestorPlace
Delta Stock Could Lead an Airline Rally
Delta Air Lines (NYSE:DAL) and other carriers aren't out of the novel coronavirus woods yet, not by a long shot. But a jump of 18.24% last week by DAL stock can't be glossed over either.Source: NextNewMedia / Shutterstock.com The recent strength of DAL stock epitomizes what's happening in the equity market today. Stocks, including many of the biggest decliners during the March Covid-19 swoon, are rallying against a backdrop of rising unemployment and other bleak economic data.Airlines, which remain contrarian bets, are late to the trash-to-treasure rally. That could be a sign that the group and DAL stock can climb further going forward.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut the sector's outlook is still troubling. Sure, Memorial Day weekend proved that Americans are eager to get out of the house, but that doesn't mean they're eager to resume taking the type of trips that require air travel.The airlines are not acting as though this is the case. The industry furloughed or laid off tens of thousands of workers. Planes are being grounded and smaller, less profitable routes are being scrapped. * 7 Red-Hot Vaccine Stocks Racing to Develop a Coronavirus Cure Weak economic data and the contention by analysts that demand for flights could take several years to return to 2019 levels aren't new. But the sector's recent rebound may indicate that investors think that the darkest clouds hanging over the airlines are gone. Delta Faces Challenges But Offers Potential RewardsIt's easy to be bearish son airlines when famed investors such as Warren Buffet abandon the group. Earlier this month, Buffett announced that he had sold all of his airline stocks. But negative investor sentiment isn't the only challenge that Delta and its rivals currently face.In the wake of the coronavirus, geopolitical tensions between the U.S. and China are again running high, with the White House accusing Beijing of blocking flights from American carriers, including Delta and United Airlines (NASAQ:UAL).The Buffet banishment is likely baked into Delta's shares at this point, but his skepticism doesn't mean Delta should be abandoned. The airlines is taking some steps to deal with the rough operating environment. Beyond the aforementioned headcount and route reductions, Delta is selling some planes and leasing them back in an effort to generate cash.That move, known as sale-leaseback, isn't exactly innovative. It's used in other industries when companies want to lighten their asset burdens while raising capital. It's generally well-received by Wall Street.As for well-known investors, not all of them are throwing in the towel on airlines. Bill Miller, the founder and CIO of Miller Value Partners, said earlier this month that betting against airlines is akin to betting against the success of a Covid-19 vaccine. Miller is putting money where his mouth is, as his firm holds stakes in Delta, United and American Airlines (NASDAQ:AAL). The Bottom Line on DAL StockCrises are not ideal times to buy airline equities. History proves that, but history also shows the group is battle-hardened and often rebounds strongly when the worst news passes.Over the past four decades, passenger "growth slowed during economic downturns, but then quickly recover{ed}. In 2018, the most recent year of data, the number of people who traveled at least once by plane hit an incredible 4.3 billion," said U.S. Global Investors.One caveat for investors with Delta or any other airlines for that matter: while many analysts are forecasting capacity levels returning to 2019 levels in 2023 or 2024, normalization could start as soon as next year. That means that investors who are evaluating Delta can only contemplate their options for so long. Also, it's important to remember that the stock is already significantly undervalued in the eyes of some.Todd Shriber has been an InvestorPlace contributor since 2014. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * The Huge Story for 2020 & Beyond That You Aren't Hearing About * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * The 1 Stock All Retirees Must Own The post Delta Stock Could Lead an Airline Rally appeared first on InvestorPlace.
- Bloomberg
Airlines Leave $29 Billion Aid Fund Untapped in Bet on Rebound
(Bloomberg) -- U.S. airlines have yet to tap $29 billion in federal pandemic relief loans as they wait to see whether the reopening of the economy revives demand and diminishes the need for money that comes with government strings attached.Although the four largest U.S. passenger airlines have applied for the Treasury Department program, only American Airlines Group Inc. has said it intends to tap the pool of funds. Southwest Airlines Co., United Airlines Holdings and Delta Air Lines Inc. say they plan to wait until fall before deciding whether to take the money -- after a summer travel season that could see more people return to the skies.The wait-and-see approach illustrates how airlines are preparing for an uncertain future amid early signs of a recovery after Americans all but stopped flying in April due to the coronavirus and travel restrictions. A second wave of infections could make the situation worse.It also highlights how only a small portion of hundreds of billions of dollars available to the Treasury Department has actually been doled out to help companies.“That pool of money is designed as backstop financing and for those who can’t raise money elsewhere,” said Helane Becker, an analyst at Cowen & Co. in New York.U.S. airlines have separately raised billions in capital through methods including secured loans, bond offerings and equity sales, and Becker said that the federal loans are a last resort. The government loans would impose restrictions such as a cap on executive compensation and require carriers to offer equity or other financial stakes to the government in exchange for the aid.“The hope is that by September, the worst of the pandemic is behind us and people will be booking for travel in the fall and the holidays, and airlines won’t need to take the money,” Becker said.A Treasury Department spokeswoman declined to comment on the number of loan applications received and when the money would be distributed. The department has separately disbursed $25 billion from its payroll support program. Airlines accepting the funds, which are a mix of grants and loans, are required to refrain from layoffs until after Sept. 30.Airlines have pointed to signs that travel demand is beginning to perk up in recent weeks, fueling hopes that the stress on beleaguered carriers could begin to wane. Passengers taking flights over Memorial Day weekend, an early test of consumer confidence and the unofficial start of the summer travel season, reached levels unseen since late March. Airlines say bookings are outpacing cancellations, and airplanes that have been almost empty are starting to fill up.Carriers are far from out of the woods, however. The aviation industry’s recovery from the coronavirus outbreak will be long and slow, with global passenger numbers likely to stay below pre-pandemic levels through 2023, according to S&P Global Ratings, which warned of more rating downgrades for airports over the next few months.Although 321,776 people passed through security at U.S. airports on Thursday in one of the busiest days since late March, that’s still an 87% decline from the equivalent day last year, according to the U.S. Transportation Security Administration. Airlines have openly discussed the likely need to shed thousands of workers after a prohibition on job cuts tied to the payroll support program expires.On Thursday, for example, American Airlines announced plans to shed 30% of its management and support staff to align its operations with dramatic declines in travel.“While I don’t want to get into specifics, we continue to have very productive conversations with Treasury Department and its advisers,” American Airlines President Robert Isom said at an industry conference May 19. “Treasury has been nothing but fantastic to work with through these unprecedented times, and we remain very confident that we will move forward with this loan in a prudent and efficient manner.”Delta, SouthwestThe Treasury Department launched the loan program April 8, and has made no further announcements since it closed on April 17. The agency is weighing whether it will disburse the money in one or several tranches as the outlook for the industry’s recovery becomes clear, a person familiar with the matter said. The program may also evolve as Treasury Secretary Steven Mnuchin hasn’t settled on the details, the person said.Delta has applied for the additional Treasury loan “to hold our place in line,” Chief Financial Officer Paul Jacobson said at the same Wolfe Research conference. “We have until September to make a decision about that as well as other financing sources should we need them.”“We’ve applied for it,” Southwest Chief Executive Officer Gary Kelly said of the potential $2.8 billion loan at the carrier’s annual shareholder meeting May 21. “We’ve not committed to take that money and we have until September 30 to make that decision.”The airline loan program is yet another piece of the pandemic rescue funds enacted on March 27 -- when Congress and the White House were so panicked that Covid-19 would ravage the U.S. economy that they quickly came together -- that may not be working as designed.Virus RescueMnuchin has only used $37.5 billion out of a $454 billion fund to backstop central bank emergency lending, though $195 billion has been committed for use. A Main Street lending facility that Congress asked the Federal Reserve to launch to support small and medium-sized companies is still not operational even as businesses lay off workers, shutter and eye bankruptcy. The Paycheck Protection Program for smaller companies has been riddled with glitches, and now needs to be fixed to extend the relief.Mnuchin also hasn’t disbursed a $17 billion pot of money reserved for companies deemed critical to national security. The largest expected recipient, Boeing Co., got help from private investors. For the hundreds of thousands of other defense contractors in the Pentagon’s supply chain, Treasury’s criteria is too strict to qualify.The loan packages for airlines and companies critical to national security, if untapped, can be used to backstop additional lending by the Fed.“With a lot of these programs it turns out they’re not for everybody, said Ian Katz, an analyst at Capital Alpha Partners in Washington. “There’s a general feeling of anguish and pain as people are unemployed, underemployed and businesses shut down -- surely the government can do more for them.”Not a BailoutFederal loans for the airline industry, which Mnuchin has repeatedly said are not a “bailout,” come with strings attached that analysts say may be less attractive than private markets. Any company tapping the loan pool must assure the government that credit is “not reasonably available” elsewhere.United Airlines, for example, is eligible for a loan of as much as $4.5 billion and the company expects to issue the department warrants to purchase 14.2 million shares of the company’s common stock, CFO Gerald Laderman said in a May 1 earnings call.Savanthi Syth, an analyst at Raymond James, said the department’s terms are not excessive but are onerous enough for airlines to turn first to the private sector.“The test for whether airlines will need this will be how much demand comes back this summer,” she said. “If we see demand getting back to 50% levels of last year, they might not need to tap it.”The $2.2 trillion pandemic stimulus package that authorized the airline loans gives Treasury until the end of the year to disburse them.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- MarketWatch
These areas of the economy ‘will not come back’ from the coronavirus pandemic
With many countries beginning to emerge from lockdown, attention has turned to the economic recovery from the coronavirus pandemic.
- InvestorPlace
United Airlines Is a Little Bit Less Ugly
When the novel coronavirus touched down on the U.S., the broader travel industry, including top players like United Airlines (NASDAQ:UAL), Delta Air Lines (NYSE:DAL) and American Airlines (NASDAQ:AAL) suffered an almost immediate impact. Of course, this volatility is hardly surprising. Even in the best of circumstances, you can easily get sick in a densely packed flying tube with wings. Thus, UAL stock and its rivals hit every branch of the ugly tree.Source: NextNewMedia / Shutterstock.com However, as my high school football coach loved to say, tough times don't last, but tough people do. For United, it appears that the societal and economic backdrop, while still terrible, are showing signs of life. First, most states have now initiated reopening measures to various degrees. Even economic strongholds like California and New York have implemented regional reopening.Better yet and to my second point, the American public has responded eagerly. Conspicuously, we noticed huge crowds swarm beaches and other large events across the nation. In many cases, it appeared that few cared little about social distancing or mitigation procedures such as wearing masks. After being cooped up in their homes, Americans just want to have fun, to loosely paraphrase Cyndi Lauper.InvestorPlace - Stock Market News, Stock Advice & Trading TipsYou can question the wisdom of these antics. At the same time, this is a positive development for UAL stock. If people are willing to mix it up with thousands of strangers, they'll likely be open to do so with hundreds. * 7 Red-Hot Vaccine Stocks Racing to Develop a Coronavirus Cure Further, travel data - if you're looking at it from a glass-half-full perspective, is encouraging for UAL stock. For instance, the Friday before Memorial Day weekend saw a big percentage gain in air passenger volume relative to this year's lows. The New Normal Will Be Ugly for UAL StockFortunately for speculators, airliner stocks have resonated with the improved travel sentiment. Since mid-May, UAL stock - along with other airliners - have posted double-digit performances. On the surface, it seems that the markets are slowly shifting toward a risk-on profile.Adding to this argument is biotechnology specialist Novavax (NASDAQ:NVAX) announcing the start of early stage clinical trials for its coronavirus vaccine. Should encouraging results stem from the trials, it would potentially give concerned Americans multiple vaccination or treatment options.And really, boosting confidence is what everybody has been trying to do, from the federal government with its emergency relief programs down to local businesses. That momentum is generating has been good enough for those wanting to bet on UAL stock.Granted, its huge discount makes it an attractive buy on paper. However, investors should look at the entire picture before reserving a position.On the Saturday before Memorial Day, Fox Business reported that the Transportation Security Administration screened 253,190 passengers. This was down a staggering 88% from the 2.12 million passengers that flew in the year-ago level. Click to EnlargeSource: Data from Statista In other words, the rebound volume is only 12% of normal capacity. What makes this allocation worse is that this depressed level hasn't been unusual since the pandemic shuttered almost everything. Between April 2 and May 21, the average passenger volume is 6.63% that of 2019 volume during those same days.Yes, a shift from 6.6% to 12% is a sizable improvement. However, if passenger volume continues to remain below 20% throughout this year, I highly doubt that we need so many airliners.While United should survive a potential game of musical chairs, it's very difficult to live off a consumer base that's been gutted 80% or more. International Flight Implosion Will Be a KillerAs you might imagine, the dearth in domestic air travel demand applies to the international realm as well. In fact, many popular global tourist destinations have suffered a catastrophic implosion.Case in point is Japan. This year, the country was scheduled to host the 2020 Summer Olympics before the coronavirus changed everything. Thanks to China, that part of the world received a black eye to its image.Indeed, the situation is so bad that the Japanese government is considering subsidizing some of the travel costs for foreign visitors. While that seems like an extreme measure, consider that only 2,900 non-Japanese tourists visited Japan in April. That's down an unfathomable 99.9%.I'm not sure how Japanese businesses levered to tourism are going to survive this calamity. And I ask the same question about UAL stock and similar investments. Chances are, you're not swimming to Japan. So, this demand erosion represents a direct hit to the airliners.Ultimately, United Airlines is still in the same position it was back when the coronavirus touched down. That the narrative got slightly less ugly doesn't change the overall equation.A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * The Huge Story for 2020 & Beyond That You Aren't Hearing About * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * The 1 Stock All Retirees Must Own The post United Airlines Is a Little Bit Less Ugly appeared first on InvestorPlace.
- InvestorPlace
Southwest Is a Much Better Pick Now Than American Airlines Stock
The last few weeks have been big for airline stocks. Moderna (NASDAQ:MRNA) gave the industry a glimmer of hope with a novel coronavirus vaccine update. States continue to reopen, and travel demand is on the rise. American Airlines (NASDAQ:AAL) stock has been a big beneficiary.Source: GagliardiPhotography / Shutterstock.com While a vaccine would be a Hail Mary pass for beleaguered airlines, I wouldn't necessarily rush out to pick up AAL stock.Why? Even if a vaccine comes out next autumn -- and that would be an absolute best-case scenario -- airlines will struggle to recover over the next few quarters. American Airlines simply isn't well equipped to get through that struggle, making it a poor choice to play the rally in airline stocks.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Debt Is Weighing Down AAL StockFrom an investment standpoint, American Airlines' biggest problem right now is debt. The firm is sitting on a $21.6 billion debt pile -- high by any standard. AAL stock is easily one of the most debt-ridden airline names you can pick up right now.United Airlines (NASDAQ:UAL) is the only other airline that comes close with long-term debt obligations of $13.2 billion. By contrast, Southwest Airlines (NYSE:LUV) is carrying just $2.3 billion worth of long-term debt. Understandably, American is burning through cash right now as it works to stay afloat amid extremely challenging conditions. But that's going to add up to a huge debt pile that will follow the firm around for quite some time. InvestorPlace's Mark Hake estimates the firm will be sitting under a $40 billion debt obligation by the end of the year. That's disastrous from an investment standpoint because it means the company will be shelling out billions each year just to pay off the interest. Should You Believe in the Vaccine Turnaround?Some might argue that the prospect of a vaccine could bring a faster-than-expected recovery in the transport sector as it means borders would be open and people could move about freely. That may be true, but that scenario is unlikely to play out.Even if we could be certain a vaccine was coming, there's no way to predict how readily it would be accepted by Americans, let alone the rest of the world. Here's a new drug that's been pushed through the testing process as quickly as possible -- will people trust it? There's already been some pushback regarding a mandatory vaccination and a drug hasn't even been approved yet.Plus, there's the added impact of the economic downturn that the world will be experiencing, vaccine or not. Unemployment is expected to remain in the double digits for the next few quarters, a fact that will likely keep many people from traveling. Not to mention that companies will cut business travel to the absolute bare minimum in an effort to save money. American Airlines Isn't All BadWhile things look bleak for airlines right now, it's worth noting that demand will eventually recover. That's especially true if a viable vaccine makes it to market. Regulators are already looking at ways to make airports safer while the coronavirus is still a factor. But the world of airline travel will probably look very different, at least in the near term. That's not great news for American because the firm will struggle to compete with domestic rivals like Southwest which are known for their low-cost models. However when air travel does restart, American may offer an edge because of its business class seating options. Many travelers worried about contracting the coronavirus may want to avoid a crowded cabin. Companies like Southwest don't offer first-class cabins.But then again, other carriers like Delta Air Lines (NYSE:DAL) and United offer premium seating with more space, and those companies aren't nearly as highly leveraged. The Bottom LineWith all of the uncertainty surrounding the novel coronavirus and the future of the U.S. economy, AAL stock just isn't worth the risk.Investors who are keen to pick up an airline stock and play the sector's recovery should be looking to Southwest, which boasts a far more solid balance sheet and will likely see its business recover faster as domestic travel returns at the end of the summer. Laura Hoy has a Finance degree from Duquesne University and has been writing about financial markets for the past 8 years. Her work can be seen in a variety of publications including InvestorPlace, Benzinga, Yahoo Finance and CCN. As of this writing Laura Hoy did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * The Huge Story for 2020 & Beyond That You Aren't Hearing About * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * The 1 Stock All Retirees Must Own The post Southwest Is a Much Better Pick Now Than American Airlines Stock appeared first on InvestorPlace.
- Zacks
American Airlines Plans 30% Staff Cut, More Layoffs Likely
American Airlines' (AAL) job cut plans are part of its cost-cutting measures as it prepares to operate a smaller airline for the foreseeable future.
- Skift
New United Airlines CEO Says No To Bankruptcy and Mandating Blocked Middle Seats
At two previous companies, new United Airlines CEO Scott Kirby developed a reputation for bluntness, often favoring honest answers over diplomatic ones. On Thursday, speaking at his first public forum since taking over last week from Oscar Munoz, Kirby showed he wouldn't drop the act just because he now leads a Fortune 100 company. In […]
- Yahoo Finance
These airlines are cutting workforce despite $25 billion bailout promise
Major U.S. airlines are cutting worker hours and encouraging employees to take voluntary leave or early retirement.
- Moody's
Hawaii Department of Transportation -- Moody's confirms United Airlines Holdings' Ba2 corporate family rating and Ba3 senior unsecured, downgrades senior secured to Ba1; outlook negative
Moody's Investors Service ("Moody's") confirmed the Ba2 corporate family, Ba2-PD probability of default and Ba3 senior unsecured ratings assigned to United Airlines Holdings, Inc. ("United"), and downgraded subsidiary United Airlines, Inc.'s senior secured rating to Ba1 from Baa3. Moody's also confirmed all of its ratings on the company's Enhanced Equipment Trust Certificates.
- Motley Fool
Why Shares of Airlines Are Falling Today
After a brief rally earlier in the week on hopes of an improving economy, airline shares are in the red once again on Thursday. Shares of American Airlines Group (NASDAQ: AAL) were down 6.6% as of 2:30 p.m. EDT and shares of United Airlines Holdings (NASDAQ: UAL) were down 4.4%. Delta Air Lines (NYSE: DAL), which earlier in the day was down 5.2%, had recovered some of that loss, but were still down on a day when broader markets are up.
- Yahoo Finance Video
Massive layoffs loom for airline industry amid COVID-19
Yahoo Finance’s Sibile Marcellus joins Akiko Fujita to break down how companies like Delta Airlines are changing the flight experience for travelers amid the coronavirus.
- Zacks
Are Airline ETF & Stocks Ready to Take Off?
Given the resumption of a higher number of flights ahead of the peak summer travel season, airline stocks and ETF are set to rebound strongly.
- TheStreet.com
American Airlines Plans 30% Cut to Management and Support Staff
American Airlines plans to cut its management and support staff by about 30% to slash costs as the coronavirus pandemic has severely curtailed air travel. The airline must "plan for operating a smaller airline for the foreseeable future," Executive Vice President of People and Global Engagement Elise Eberwein said in a letter to employees, Reuters reported. Once American reduces its management ranks, the airline will turn to frontline employees including flight attendants and pilots, who will receive fresh voluntary leave and early retirement options in June with the goal of avoiding involuntary furloughs, Reuters reported.
- Investopedia
Top Industrial Stocks for June 2020
The industrial sector includes companies that produce machinery, equipment, and supplies that are used in construction and manufacturing, as well as providing related services. Well-known companies in this group include Honeywell International Inc. (HON), Lockheed Martin Corp. (LMT), and 3M Co. (MMM). The industrial sector also includes companies that provide air transportation services such as American Airlines Group Inc. (AAL).
