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United (UAL) May Halt JFK Service if Flight Capacity Stays Same
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Per a Reuters report, United Airlines (UAL - Free Report) has warned that it will stop flying to New York's John F. Kennedy Airport (JFK) from October. Management stated that this is bound to happen if the Federal Aviation Administration (FAA) does not approve UAL’s request to operate more flights at JFK. UAL’s CEO Scott Kirby wrote to FAA’s acting administrator Billy Nolen on the matter.
Management believes that there is scope for operational expansion at the busy U.S. airport. The assessment is based on the huge infrastructure-related investments made by the FAA and the Port Authority since 2008 at JFK. However, despite the heavy investments, UAL’s JFK capacity (in terms of flights) has been stable.
UAL perceives that to compete effectively with its rivals at JFK , it requires allotment of additional slots (takeoff and landing authorizations) from the FAA. Per Kirby’s e-mail, "If we are not able to get additional allocations for multiple seasons, we will need to suspend service at JFK, effective at the end of October".
According to the FAA’s current stance, “Any additional slots at JFK would follow the FAA's well-established process of awarding them fairly and to increase competition."
Currently, UAL operates only twice-daily flights to San Francisco and Los Angeles from JFK. UAL resumed operations at JFK in 2021 after exiting the same in 2015. In 2015, UAL, currently carrying a Zacks Rank #3 (Hold), agreed to lease 24 year-round slots at the airport to Delta Air Lines (DAL - Free Report) . The decision to lease the slots to Delta on a long-term basis implies that UAL will have no access to those slots in the foreseeable future.
The decision to end operations at JFK at that time was aimed at consolidating transcontinental flights at UAL’s nearby Newark, NJ hub. In June 2022, United Airlines reduced its operations (50 daily flights) at Newark to address congestion-related issues.
Now all eyes will be on whether FAA approves UAL’s request for extra permanent slots at JFK.
Stocks to Consider
Some better-ranked stocks in the Zacks Transportation sector areTriton International and C.H. Robinson (CHRW - Free Report) .
Triton is being aided by the gradual increase in trade volumes and container demand. TRTN expects container demand to remain strong throughout 2022. Measures to reward its shareholders through dividends and buybacks instill confidence in the stock further.
Triton has an expected earnings growth rate of 22.4% for the current year. TRTN’s bottom line outpaced the Zacks Consensus Estimate in each of the last four quarters, the average being 7.5%. TRTN currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
C.H. Robinson is being aided by an improving freight scenario in the United States. Efforts to control costs also bode well. Measures to reward CHRW's shareholders instill confidence in the stock further.
CHRW has a pleasant earnings track record. The bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters (missing the mark in the remaining one). The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 17.6% upward over the past 60 days. C.H. Robinson currently carries a Zacks Rank of 2.
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United (UAL) May Halt JFK Service if Flight Capacity Stays Same
Per a Reuters report, United Airlines (UAL - Free Report) has warned that it will stop flying to New York's John F. Kennedy Airport (JFK) from October. Management stated that this is bound to happen if the Federal Aviation Administration (FAA) does not approve UAL’s request to operate more flights at JFK. UAL’s CEO Scott Kirby wrote to FAA’s acting administrator Billy Nolen on the matter.
Management believes that there is scope for operational expansion at the busy U.S. airport. The assessment is based on the huge infrastructure-related investments made by the FAA and the Port Authority since 2008 at JFK. However, despite the heavy investments, UAL’s JFK capacity (in terms of flights) has been stable.
UAL perceives that to compete effectively with its rivals at JFK , it requires allotment of additional slots (takeoff and landing authorizations) from the FAA. Per Kirby’s e-mail, "If we are not able to get additional allocations for multiple seasons, we will need to suspend service at JFK, effective at the end of October".
According to the FAA’s current stance, “Any additional slots at JFK would follow the FAA's well-established process of awarding them fairly and to increase competition."
Currently, UAL operates only twice-daily flights to San Francisco and Los Angeles from JFK. UAL resumed operations at JFK in 2021 after exiting the same in 2015. In 2015, UAL, currently carrying a Zacks Rank #3 (Hold), agreed to lease 24 year-round slots at the airport to Delta Air Lines (DAL - Free Report) . The decision to lease the slots to Delta on a long-term basis implies that UAL will have no access to those slots in the foreseeable future.
The decision to end operations at JFK at that time was aimed at consolidating transcontinental flights at UAL’s nearby Newark, NJ hub. In June 2022, United Airlines reduced its operations (50 daily flights) at Newark to address congestion-related issues.
Now all eyes will be on whether FAA approves UAL’s request for extra permanent slots at JFK.
Stocks to Consider
Some better-ranked stocks in the Zacks Transportation sector areTriton International and C.H. Robinson (CHRW - Free Report) .
Triton is being aided by the gradual increase in trade volumes and container demand. TRTN expects container demand to remain strong throughout 2022. Measures to reward its shareholders through dividends and buybacks instill confidence in the stock further.
Triton has an expected earnings growth rate of 22.4% for the current year. TRTN’s bottom line outpaced the Zacks Consensus Estimate in each of the last four quarters, the average being 7.5%. TRTN currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
C.H. Robinson is being aided by an improving freight scenario in the United States. Efforts to control costs also bode well. Measures to reward CHRW's shareholders instill confidence in the stock further.
CHRW has a pleasant earnings track record. The bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters (missing the mark in the remaining one). The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 17.6% upward over the past 60 days. C.H. Robinson currently carries a Zacks Rank of 2.