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In the past week, oil price has reached the highest level since 2008 due to concerns over oil supplies from Russia, which is one of the world's largest producers of the commodity, as the U.S. banned Russian oil imports. Many other countries might follow suit. With oil price surging, Alaska Air Group (ALK - Free Report) upped its first-quarter 2022 forecast for fuel price per gallon.
Gol Linhas’ February traffic report was impressive, reflecting the uptick in air-travel demand in Brazil. Anticipating air-travel demand to increase substantially during summer, Hawaiian Holdings’ (HA - Free Report) subsidiary Hawaiian Airlines aims to resume a nonstop seasonal service between Oakland and Kona on the Island of Hawaii. Spirit Airlines (SAVE - Free Report) added flight crew bases in Miami and Atlanta to cater to the likely demand swell this summer.
Recap of the Latest Top Stories
1. Alaska Air’s management now expects first-quarter 2022 fuel price per gallon in the $2.60- 2.65 range. The earlier expectation was in the $2.45-$2.5 band. With fuel costs rising, the carrier slightly moderated its current-year capacity outlook. The airline now anticipates first-half 2022 capacity to be down 3-5%. The carrier still intends to return to 100% pre-COVID capacity this summer followed by growth in the latter half of the year.
2. In February, Gol Linhas’ consolidated traffic rose 35% year over year. To match the increased demand situation, GOL is expanding its capacity. In the same month, capacity grew 35.8% year over year. Since traffic growth was less than capacity expansion, load factor (percentage of seats filled by passengers) declined 0.5 percentage points (p.p) to 80.3% last month.
Upbeat traffic in its domestic markets is leading to the rosy scenario on a consolidated basis. In February, domestic traffic and capacity improved 30.2% and 31.9%, respectively. On the domestic front, 25.633.9% more passengers boarded GOL’s flights in February 2022.
3. Hawaiian Airlines announced that it will resume non-stop service between Oakland and Kona from Jun 15 and run through Sep 6. This route will become Hawaiian Airlines’ fourth daily service, connecting Oakland and the islands. With air-travel demand improving, Hawaiian Airlines’ decision to restart service on the above route seems prudent and may attract significant traffic, once operational. Additional traffic will boost the top line. Besides, a second daily flight between San Francisco and Honolulu will begin on May 15 and operate through Aug 1.
4. Spirit Airlines, currently carrying a Zacks Rank #3 (Hold), will be adding pilot and flight attendant bases at the Miami International Airport and Hartsfield-Jackson Atlanta International Airport. This increases the number of crew bases across its network to nine. SAVE expects to place more than 100 pilots and more than 200 flight attendants at each base initially this summer when the bases open. As the year progresses, additional crew, supervisors and support functions are expected to follow.
Spirit Airlines was also in news recently when it launched a service from Orlando International Airport to Mercedita International Airport in Ponce, thereby expanding its presence in Puerto Rico. This expansion update was reported in detail in the previous week’s write up.
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 all airline stocks have traded in the red over the past week, mainly due to the upsurge in oil price (currently trading well above $100 a barrel). The spike is reflective of the concerns about oil supplies from Russia, which is one of the world's largest producers of the commodity. As a result, the NYSE ARCA Airline Index has decreased 13.53% to $65.61 over the past week. Over the past six months, the NYSE ARCA Airline Index has declined 26.4%.
What's Next in the Airline Space?
With oil price skyrocketing, we expect many airlines to join Alaska Air in raising their respective forecasts for the March-quarter fuel price per gallon.
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Airline Stock Roundup: ALK's Higher Q1 Fuel Cost View, GOL's Solid Traffic & More
In the past week, oil price has reached the highest level since 2008 due to concerns over oil supplies from Russia, which is one of the world's largest producers of the commodity, as the U.S. banned Russian oil imports. Many other countries might follow suit. With oil price surging, Alaska Air Group (ALK - Free Report) upped its first-quarter 2022 forecast for fuel price per gallon.
Gol Linhas’ February traffic report was impressive, reflecting the uptick in air-travel demand in Brazil. Anticipating air-travel demand to increase substantially during summer, Hawaiian Holdings’ (HA - Free Report) subsidiary Hawaiian Airlines aims to resume a nonstop seasonal service between Oakland and Kona on the Island of Hawaii. Spirit Airlines (SAVE - Free Report) added flight crew bases in Miami and Atlanta to cater to the likely demand swell this summer.
Recap of the Latest Top Stories
1. Alaska Air’s management now expects first-quarter 2022 fuel price per gallon in the $2.60- 2.65 range. The earlier expectation was in the $2.45-$2.5 band. With fuel costs rising, the carrier slightly moderated its current-year capacity outlook. The airline now anticipates first-half 2022 capacity to be down 3-5%. The carrier still intends to return to 100% pre-COVID capacity this summer followed by growth in the latter half of the year.
2. In February, Gol Linhas’ consolidated traffic rose 35% year over year. To match the increased demand situation, GOL is expanding its capacity. In the same month, capacity grew 35.8% year over year. Since traffic growth was less than capacity expansion, load factor (percentage of seats filled by passengers) declined 0.5 percentage points (p.p) to 80.3% last month.
Upbeat traffic in its domestic markets is leading to the rosy scenario on a consolidated basis. In February, domestic traffic and capacity improved 30.2% and 31.9%, respectively. On the domestic front, 25.633.9% more passengers boarded GOL’s flights in February 2022.
3. Hawaiian Airlines announced that it will resume non-stop service between Oakland and Kona from Jun 15 and run through Sep 6. This route will become Hawaiian Airlines’ fourth daily service, connecting Oakland and the islands. With air-travel demand improving, Hawaiian Airlines’ decision to restart service on the above route seems prudent and may attract significant traffic, once operational. Additional traffic will boost the top line. Besides, a second daily flight between San Francisco and Honolulu will begin on May 15 and operate through Aug 1.
4. Spirit Airlines, currently carrying a Zacks Rank #3 (Hold), will be adding pilot and flight attendant bases at the Miami International Airport and Hartsfield-Jackson Atlanta International Airport. This increases the number of crew bases across its network to nine. SAVE expects to place more than 100 pilots and more than 200 flight attendants at each base initially this summer when the bases open. As the year progresses, additional crew, supervisors and support functions are expected to follow.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Spirit Airlines was also in news recently when it launched a service from Orlando International Airport to Mercedita International Airport in Ponce, thereby expanding its presence in Puerto Rico. This expansion update was reported in detail in the previous week’s write up.
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 all airline stocks have traded in the red over the past week, mainly due to the upsurge in oil price (currently trading well above $100 a barrel). The spike is reflective of the concerns about oil supplies from Russia, which is one of the world's largest producers of the commodity. As a result, the NYSE ARCA Airline Index has decreased 13.53% to $65.61 over the past week. Over the past six months, the NYSE ARCA Airline Index has declined 26.4%.
What's Next in the Airline Space?
With oil price skyrocketing, we expect many airlines to join Alaska Air in raising their respective forecasts for the March-quarter fuel price per gallon.