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In the past week, airline heavyweights United Airlines (UAL - Free Report) and Alaska Air Group (ALK - Free Report) reported first-quarter 2024 results. Both companies incurred a quarterly loss mainly due to high costs. First-quarter 2024 earnings-related update was also mentioned in the previous week’s write-up.
Spirit Airlines (SAVE - Free Report) , which is grappling with geared turbofan or GTF engine issues, made some adjustments to its outlook for first-quarter 2024. Allegiant Travel (ALGT - Free Report) was also in the news as its flight attendants voted to approve a new labor deal.
Recap of the Recent Most Important Stories
1 United Airlines reported first-quarter 2024 loss per share (excluding 23 cents from non-recurring items) of 15 cents, which was narrower than the Zacks Consensus Estimate of a loss of 53 cents per share. In the year-ago reported quarter, UAL had reported a loss of 63 cents per share. Operating revenues of $12,539 million beat the Zacks Consensus Estimate of $12,428.4 million. The top line increased 9.7% year over year due to upbeat air travel demand, driven by a 10.1% rise in passenger revenues (which accounted for 90.2% of the top line) to $11,313 million. UAL expects second-quarter 2024 adjusted earnings in the $3.75-$4.25 per share band.
2. Alaska Air reported first-quarter 2024 loss per share of 92 cents, which was narrower than the Zacks Consensus Estimate of a loss of $1.09. In the year-ago reported quarter, ALK had incurred a loss of 62 cents per share. Operating revenues of $2,232 million surpassed the Zacks Consensus Estimate of $2,179.3 million. The top line increased 2% year over year owing to higher passenger revenues. ALK anticipates second-quarter 2024 earnings per share between $2.20 and $2.40.
3 Spirit Airlines now expects first-quarter 2024 revenues to be $1.265 billion. The new guidance is at the mid-point of its previously guided range of $1.25-$1.28 billion. Adjusted operating margin is now expected to be between (13.5%) and (14.5%) compared with the earlier expectation between (12%) and (15%). The guidance assumes that SAVE would recognize approximately $38 million of credits for AOG aircraft (aircraft on the ground).
4. Allegiant Travel received encouraging tidings on the labor front when the company’s flight attendants, represented by the Transport Workers Union of America, AFL-CIO Local 577, ratified a five-year agreement. The union represents more than 1,700 flight attendants at ALGT. Following the ratification, ALGT’s flight attendants are eligible for wage increases in the 20-41.2% band with immediate effect. In the process, 97% of flight attendants participated, with 89% voting in favor of the deal.
Performance
The following table shows the price movement of the major airline players over the past week and during the last six months.
Image Source: Zacks Investment Research
The table above shows that most airline stocks traded in the green over the past week. The NYSE ARCA Airline Index has increased 3.8% $63.69. Over the course of past six months, the NYSE ARCA Airline Index has gained 29.5%.
What’s Next in the Airline Space?
American Airlines (AAL - Free Report) is scheduled to release first-quarter 2024 results on Apr 25. We expect AAL's results to be aided by high passenger revenues, owing to upbeat air-travel demand. However, high labor costs are likely to have dented its performance.
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Airline Stock Roundup: UAL & ALK Report Q1 Loss, SAVE Tweaks View
In the past week, airline heavyweights United Airlines (UAL - Free Report) and Alaska Air Group (ALK - Free Report) reported first-quarter 2024 results. Both companies incurred a quarterly loss mainly due to high costs. First-quarter 2024 earnings-related update was also mentioned in the previous week’s write-up.
Spirit Airlines (SAVE - Free Report) , which is grappling with geared turbofan or GTF engine issues, made some adjustments to its outlook for first-quarter 2024. Allegiant Travel (ALGT - Free Report) was also in the news as its flight attendants voted to approve a new labor deal.
Recap of the Recent Most Important Stories
1 United Airlines reported first-quarter 2024 loss per share (excluding 23 cents from non-recurring items) of 15 cents, which was narrower than the Zacks Consensus Estimate of a loss of 53 cents per share. In the year-ago reported quarter, UAL had reported a loss of 63 cents per share. Operating revenues of $12,539 million beat the Zacks Consensus Estimate of $12,428.4 million. The top line increased 9.7% year over year due to upbeat air travel demand, driven by a 10.1% rise in passenger revenues (which accounted for 90.2% of the top line) to $11,313 million. UAL expects second-quarter 2024 adjusted earnings in the $3.75-$4.25 per share band.
2. Alaska Air reported first-quarter 2024 loss per share of 92 cents, which was narrower than the Zacks Consensus Estimate of a loss of $1.09. In the year-ago reported quarter, ALK had incurred a loss of 62 cents per share. Operating revenues of $2,232 million surpassed the Zacks Consensus Estimate of $2,179.3 million. The top line increased 2% year over year owing to higher passenger revenues. ALK anticipates second-quarter 2024 earnings per share between $2.20 and $2.40.
Currently, ALK carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3 Spirit Airlines now expects first-quarter 2024 revenues to be $1.265 billion. The new guidance is at the mid-point of its previously guided range of $1.25-$1.28 billion. Adjusted operating margin is now expected to be between (13.5%) and (14.5%) compared with the earlier expectation between (12%) and (15%). The guidance assumes that SAVE would recognize approximately $38 million of credits for AOG aircraft (aircraft on the ground).
4. Allegiant Travel received encouraging tidings on the labor front when the company’s flight attendants, represented by the Transport Workers Union of America, AFL-CIO Local 577, ratified a five-year agreement. The union represents more than 1,700 flight attendants at ALGT. Following the ratification, ALGT’s flight attendants are eligible for wage increases in the 20-41.2% band with immediate effect. In the process, 97% of flight attendants participated, with 89% voting in favor of the deal.
Performance
The following table shows the price movement of the major airline players over the past week and during the last six months.
Image Source: Zacks Investment Research
The table above shows that most airline stocks traded in the green over the past week. The NYSE ARCA Airline Index has increased 3.8% $63.69. Over the course of past six months, the NYSE ARCA Airline Index has gained 29.5%.
What’s Next in the Airline Space?
American Airlines (AAL - Free Report) is scheduled to release first-quarter 2024 results on Apr 25. We expect AAL's results to be aided by high passenger revenues, owing to upbeat air-travel demand. However, high labor costs are likely to have dented its performance.