28.69 +0.23 (0.81%)
After hours: 6:35PM EDT
|Bid||28.59 x 3200|
|Ask||28.63 x 1400|
|Day's Range||26.70 - 28.60|
|52 Week Range||17.51 - 63.44|
|Beta (5Y Monthly)||1.10|
|PE Ratio (TTM)||4.03|
|Earnings Date||Jul 09, 2020 - Jul 13, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Feb 19, 2020|
|1y Target Est||34.40|
John Stoltzfus, Chief Investment Strategist and Managing Director at Oppenheimer Asset Management, joined Yahoo Finance's The Final Round to discuss his outlook for the market and reopening optimism.
(Bloomberg) -- The Trump administration is suspending passenger flights to the U.S. by Chinese airlines, saying it was retaliating after Beijing barred American carriers from re-entering China amid escalating tensions between the two nations.The order issued Wednesday takes effect June 16, although President Donald Trump could act sooner if he chooses, the Department of Transportation said in a statement.The move ratchets up tensions between the U.S. and China over trade, the coronavirus pandemic and the treatment of Hong Kong. China recently paused some agriculture imports after Trump threatened to eliminate the policy exemptions that allow America to treat Hong Kong differently than the mainland. A phase one trade deal between the nations is in jeopardy, and along with it billions of dollars in Boeing Co. aircraft sales.Beijing has prevented U.S. carriers from restarting service to China while four of its airlines have maintained flights to and from American airports this year as Covid-19 erupted, according to the Transportation Department. U.S. airlines had asked to resume service as early as June 1.“The Chinese government’s failure to approve their requests is a violation of our Air Transport Agreement,” the Transportation Department said in an emailed statement.The order stops short of an outright ban, allowing Chinese carriers to operate one flight to the U.S. for each flight that China grants to American carriers.U.S. airline shares surged amid a broad market rally and signs that travel demand is starting to rebound. A Standard & Poor’s index of major carriers jumped 7.6% at the close in New York to the highest since March 27. United Airlines Holdings Inc. led the gains with a 13% increase to $33.65, followed by Alaska Air Group Inc.’s 8.6% advance to $39.30.Boeing also surged 13% after a report from IATA, a trade group, indicated a recovery was underway for global airlines after demand for travel reached a nadir in April. Even so, the trade sparring adds to the risk and uncertainty for Boeing’s 737 Max and 787 Dreamliner, two aircraft that are critical to the planemaker’s recovery from the worst downturn in aviation history.The uncertainty over a phase one trade deal leaves in limbo a potential bonanza of plane orders that would help Boeing avoid deeper cuts to jetliner production. China’s airlines, which are recovering from the pandemic before their peers in the U.S. and Europe, could also provide a much-needed boost to the best-selling Max once a global grounding is lifted.“I could see Boeing becoming a pawn in this game,” said George Ferguson, an analyst with Bloomberg Intelligence. For the manufacturer, sales to China’s airlines are “a decent part of the backlog.”Chinese central planners, who control the country’s aircraft purchases, were traditionally careful to balance Boeing and Airbus SE orders to drive better bargains with the manufacturers, Ferguson noted. But while China was the largest customer of the 737 jetliner before Trump was elected, its airlines last ordered the Max in September 2016, according to Boeing’s website. The country hasn’t bought any planes from the U.S. manufacturer in two-and-a-half years.The Transportation Department order is aimed at Air China Ltd., China Eastern Airlines Corp., China Southern Airlines Co. and Xiamen Airlines Co. The news came after the market close in Shanghai and Hong Kong, which are major trading centers for publicly held Chinese airlines.While the Transportation Department’s order applied only to passenger flights, it isn’t clear whether the spat could eventually spill into the burgeoning air-freight operations between the U.S. and China.Couriers such as FedEx Corp. and United Parcel Service Inc. have had to ramp up operations in China to fulfill demand for medical supplies and other equipment. At the same time, several U.S. passenger airlines have begun flying cargo in empty passenger planes as they struggle for revenue during the unprecedented downturn triggered by the virus.The trade group that represents large U.S. carriers, Airlines for America, applauded the government’s action. “We believe DOT’s order will ensure fair and equal opportunity for passenger airlines with respect to service to and from China,” the group said in a statement.China’s embassy in Washington didn’t respond to emailed requests for comment.The Transportation Department on May 22 said China had violated a bilateral agreement allowing airline service between the two countries by failing to respond to requests by Delta Air Lines Inc. and United. The department accused China of unfairly blocking the carriers’ attempts to resume service in that country.The DOT on Wednesday accused the Civil Aviation Authority of China of being “unable to communicate definitively” when it will allow U.S. airlines to resume flights.Delta originally sought to resume China flights on June 1 but has had to delay because the Chinese government hasn’t approved its application. It’s currently seeking to restart flights on June 11 between Detroit and Shanghai and Seattle and Shanghai, both with stops in Seoul.“We support and appreciate the U.S. government’s action to enforce our rights and ensure fairness,” the Atlanta-based carrier said in a statement.American Airlines Group Inc.’s last China flights departed on Jan. 31. It’s currently set to resume flights to China in October. American had an average of six total daily nonstop flights to the cities of Hong Kong, Shanghai and Beijing from Dallas-Fort Worth and Los Angeles. Hong Kong isn’t covered in the DOT order.United also plans to resume three routes to China as early as this month, pending regulatory approval. That would be for service from San Francisco to Beijing and Shanghai, and between Newark, New Jersey, and Shanghai.“We look forward to resuming passenger service between the United States and China when the regulatory environment allows us to do so,” United said in a statement.In early January, there had been approximately 325 weekly scheduled flights between the two countries. That fell to only 20 per week by four Chinese carriers by mid-February, according to the DOT.Earlier this year China said in an order that airlines couldn’t operate more flights than they had scheduled on March 12. However, by that time, U.S. carriers weren’t flying there, making it impossible for them to resume service, the DOT charged.China’s order “effectively precludes U.S. carriers from reinstating scheduled passenger flights to and from China and operating to the full extent of their bilateral rights, while Chinese carriers are able to maintain scheduled passenger service to and from each foreign market served as of the baseline date, including the United States,” the DOT said in its order.(Updates with risk for Boeing in eighth paragraph. A previous version of this story was corrected to remove a photo of a China Airlines jet, which doesn’t represent an airline impacted by the U.S. action.)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.
Investors - most likely individuals looking for bargains - have piled into an exchange-traded fund that tracks a sector that took it on the chin in the global quarantine. What’s going on?
Carriers right now are trading in lockstep with economic sentiment, and sentiment today is positive.
The Department of Transportation on Wednesday moved to block Chinese airlines from flying into the United States, responding to China's silence on requests by Delta Air Lines (NYSE: DAL) and United Airlines Holdings (NASDAQ: UAL) to resume flights to China later this month. Delta, United, and American Airlines Group (NASDAQ: AAL) all suspended service to China in the early days of the COVID-19 pandemic, but as the worst of the pandemic begins to fade the airlines are taking tentative steps to rebuild their international networks.
Shares of American Airlines Group Inc. rallied 6.2% in afternoon trading, even as the air carrier's credit rating was cut to a peer-group low of B- from B at S&P Global Ratings. The credit rating agency said the outlook on the rating, which is now six notches deep into speculative grade, or "junk" territory, remains negative. S&P said it's also maintaining its assessment of liquidity at "less than adequate," given the expectation of a "substantially negative level of cash generation" over the next 12 months. "We expect American to generate a substantial cash flow deficit in 2020 due to the impact of the coronavirus, but to return to positive cash flow generation in 2021," S&P said. "While the company is reducing capacity and some associated costs, and benefits from the steep decline in oil prices, we expect these to continue to be more than offset by much weaker traffic." Meanwhile, S&P rates the credit of United Airlines Holdings Inc. at BB-, Delta Air Lines Inc. at BB, Southwest Airlines Co. at an investment grade level of BBB and JetBlue Airways Corp. at BB-. Another downgrade of American's rating would put it in the CCC level, which S&P says reflects debt that is "currently vulnerable to nonpayment." American's stock has shed 58.4% year to date, while the U.S. Global Jets ETF has shed 45.3% and the S&P 500 has lost 3.4%.
Delta Air Lines Inc said on Wednesday it will extend social distancing measures on its flights through Sept. 30 and will block the selection of middle seats and cap seating in every cabin. The goal is to convince passengers worried about COVID-19 to return to flying. Delta will cap seating at 50% in first class, 60% in other cabins and 75% in its exclusive Delta One cabins.
Delta Air Lines (NYSE: DAL) said Wednesday that it will prevent travelers from selecting middle seats and cap passenger counts on flights through Sept. 30, its latest effort to reassure passengers it is safe to fly without a COVID-19 vaccine. Delta said it will sell only 50% of first class seats and between 60% and 75% of seats in other classes to help give passengers more space and to allow for some form of social distancing in flight. The airline is also restarting automatic upgrades for frequent travelers and has pledged to add flights on routes where the planes are nearing the caps.
The Chinese government’s denial of U.S. airline carriers’ requests to resume passenger flights to and from China was met with a retaliatory measure from the U.S. Department of Transportation (DOT) on Wednesday.
The stock market continued to gain ground on Wednesday morning, buoyed by hopes for a successful economic recovery along with some positive earnings reports from well-regarded tech companies. Market participants have been increasingly optimistic about the prospects for businesses to bounce back from the disruptions that the coronavirus pandemic has wrought over the past several months.
Airlines are still too large for demand that will take three to five years to recover to 2019 levels, according to Cowen analyst Helane Becker.
The Trump administration plans to block Chinese airlines from flying to and from the U.S., reports said Wednesday. The Wall Street Journal reports the move came after China barred U.S. airlines from conducting passenger service to China. The New York Times reports the policy begins on June 16. Delta and United had hoped to resume flights to China this months, the Times writes.
Airline tickets are cheap right now. You can book roundtrip airfare in August between New York and Los Angeles for $62, according to a search on travel website Kayak (BKNG) For less than $200, you can get round-trip airfare between Miami and dozens of destinations across Latin America and the Caribbean. Airlines have slashed the price of tickets as demand plummeted in the face of the global coronavirus pandemic.
The Trump administration has said it will ban Chinese passenger airlines flying to and from the US this month unless Beijing relaxes restrictions on American airlines. The US transport department said on Wednesday it would block any scheduled passenger flight by a Chinese carrier from June 16, in an escalation of the two countries’ tussle over which flights should be allowed during the coronavirus pandemic. “Currently, four Chinese carriers and no US carriers operate scheduled passenger flights between the United States and China,” the department said in a statement.
Airline stocks enjoyed another broad rally Tuesday, as data on airport travelers continued to show a steady increase in demand as COVID-19-related restrictions gradually ease. The U.S. Global Jets ETF rose 2.0%, with 31 of 33 components gaining ground. The Transportation Security Administration (TSA) said that number of travelers going through its checkpoints reached 353,261 on Monday, the most since March 22. The daily average for the week ended Saturday, May 30, was 293,144, the highest since the week ended March 15, which is before all the lockdowns took hold. The daily average for the week is now more than triple the low of 95,674 seen during the week ended April 18. "We expect trends to continue to improve as states ease stay at home restrictions and leisure activities resume," wrote Cowen analyst Helane Becker in a note to clients. "Airlines with whom we've spoken have seen modest green shoots with improvement coming in beach and mountain destinations." Among the more-actively traded airline stocks, American Airlines Group Inc. gained 0.6%, United Airlines Holdings Inc. rallied 1.5%, Delta Air Lines Inc. advanced 1.0%, Southwest Airlines Co. rallied 2.2% and Spirit Airlines Inc. climbed 2.7%. The Jets ETF has now run up 13.5% over the past month, while the S&P 500 has tacked on 8.4%.
Investors are bidding up the stock, along with shares of other airlines, as carriers continue to see a slow recovery in travel and cut costs to regain profitability. The airline has now received $2.3 billion in payroll support under the federal Cares Act program, covering 70% of its payroll costs through Sept. 30, when the program expires. Shares of Southwest were up about 3% in trading Tuesday, amid a broader rally in airline stocks.
NOTE: On June 3, 2020, the press release was corrected as follows: In the debt list, under Confirmations for United Airlines, Inc., the following debt was added: Senior Secured Equipment Trust, Confirmed at Baa3. Revised release follows. New York, May 28, 2020 -- 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.
As part of Mileage Plan promotions, Alaska Air Group's (ALK) unit Alaska Airlines is extending a 50% bonus of elite qualifying miles for flights taken through the end of this year.
The airline spent billions securing international partners. Those valuations are falling along with Delta shares.
Delta (DAL) carries out a reshuffling process to align its staff size to future flying plans. To prevent furloughs in this regard, the carrier is working with the pilots' union.
With concern about the coronavirus pandemic receding for the moment, investors are focused on reopening the global economy. More than half of people worldwide believe that capitalism does more harm than good. In the United States, fewer than one in five have a “very favorable” view of large enterprises, and only one in four say they trust corporate executives.
The U.S. Global Jets ETF (NYSE: JETS), the lone exchange-traded fund dedicated to airline equities, is set to undergo some changes that will slightly reduce the fund's exposure to the four largest domestic carriers.What To KnowJETS follows the U.S. Global Jets Index, which typically includes 30 to 35 stocks. When that index rebalances in March, June, September and December, it assigns weights of 12% to the four largest U.S. carriers.Currently, Southwest (NYSE: LUV), American Airlines (NASDAQ: AAL), Delta Air Lines (NYSE: DAL) and United Airlines (NASDAQ: UAL) combine for about 42% of the fund's weight.JETS' next largest component doesn't command even 5% of the fund's weight, but the fund could be poised to become more diverse.Why It's ImportantIn a recent filing with the Securities and Exchange Commission, U.S. Global notes the JETS index could include 39 companies going forward, potentially increasing its exposure to Canadian carriers while possibly lowering weights to the aforementioned quartet of US-based airlines."At the time of each reconstitution of the Index, each of the four largest U.S. or Canadian passenger airline companies, as measured primarily by their market capitalization and, to a lesser extent, their passenger load factor, receives a 10 percent weighting allocation of the Index," according to the filing. "Each of the next five largest U.S. or Canadian passenger airline companies receives a 4 percent weighting allocation of the Index."Different criteria apply to the remainders of the benchmark's components."The remaining Airline Companies meeting the Index criteria are then scored based on multiple fundamental factors," according to the filing. "Their score is primarily driven by their cash flow return on invested capital (CFROIC) with additional inputs based on sales per share growth, gross margins, and sales yield. Each of the five U.S. or Canadian companies with the highest composite scores receives a 3 percent weighting allocation of the Index, and each of the 25 non-U.S. and non-Canadian companies with the highest composite scores receives a 1 percent weighting allocation of the Index."What's NextTime will tell if these changes are meaningful to JETS investors or if the alterations will draw more of a crowd. As it is, the ETF is doing plenty of that.Last week, JETS gained more than 8%, putting an exclamation point on a month in which investors added nearly $265 million to the fund. Year to date, investors added $857 million to the airline ETF.See more from Benzinga * With Buffett Bailing, It Could Be A Black Monday For Airline ETF * 3 ETFs To Play For This Week's Earnings Onslaught(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.