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Airline Stock Roundup: ALGT's Q3 Loss, RYAAY's Rosy Traffic in October & More
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In the past week, Allegiant Travel Company (ALGT - Free Report) reported a wider-than-expected loss per share for third-quarter 2022 due to high costs. Ryanair Holdings (RYAAY - Free Report) posted upbeat traffic data for October, driven by the buoyant air-travel demand scenario. Mirroring the labor woes for U.S. airlines, United Airlines’ (UAL - Free Report) pilots voted down the tentative deal that its union had inked with the airline.
1 Allegiant Travel reported a third-quarter 2022 loss (excluding $2.04 from non-recurring items) of 54 cents per share, wider than the Zacks Consensus Estimate of a loss of 47 cents. Operating revenues of $560.3 million beat the Zacks Consensus Estimate of $556.6 million and increased 21.9% on a year-over-year basis.
Passenger revenues, accounting for the bulk (92.2%) of the top line, rose 21.9% on a year-over-year basis. The upside can be attributed to improved air-travel demand. Air traffic (measured in revenue passenger miles or RPMs) for scheduled service climbed 15.7% in the quarter under review. Capacity (measured in available seat miles or ASMs) inched up 0.1% year over year. Load factor increased 1190 basis points to 88.5% in the reported quarter as traffic surge outweighed capacity expansion.
Operating cost per available seat miles (CASM), excluding fuel and effects of Hurricane Ian, for the total system escalated to 7.81 cents from 6.18 cents a year ago. Average fuel cost per gallon (scheduled) shot up in excess of 75% to $3.84 in the quarter. Total scheduled service passenger revenue per available seat miles rose 21.2% to 12.60 cents. ALGT exited the September quarter with 116 planes in its fleet. Fleet size at the end of 2022 is expected to be 123.
For fourth-quarter 2022, fuel cost per gallon is expected to be $3.75. Total operating revenues are likely to increase in the 26.5-28.5% band from fourth-quarter 2019 actuals. Non-fuel unit costs are likely to increase in the 13-15% range. Capacity for scheduled service and total system are likely to increase 13.5% and 15%, respectively, from respective fourth-quarter 2019 actuals.
2. In October, RYAAY flew 15.7 million passengers, the highest-ever traffic volume at RYAAY in the said month. Last October, only 11.4 million passengers were transported by RYAAY. Load factor increased to 94% from 84% in October 2021. The number of passengers attracted by RYAAY in October 2022 was 14% higher than the 13.1 million passengers flown in October 2019 (pre-coronavirus era). The stock currently carries a Zacks Rank #3 (Hold).
.3. Pilots at United Airlines, represented by the Air Line Pilots Association, voted against a pay-related tentative deal inked a few months ago. 9,980 UAL pilots participated in the voting procedure with an overwhelming 94% casting votes against the deal. They believed that the terms fell short of their expectations. Pilots will now commence a series of informational picketing events to convince UAL to resume talks to finalize an agreement.
4. In a similar development, American Airlines’ (AAL - Free Report) pilots reportedly voted down an offer by the company as they believe, the current offer does not match their expectations. Per the Allied Pilots Association, the union representing the pilots, its board voted down the offer 15-5. The turned-down proposal included pay raises of 19% in three steps over a two-year duration. The rejection highlights labor problems for U.S. airlines as they grapple with pilot shortage in the face of a strong rebound in air-travel demand.
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 even though most airline stocks have traded in the red over the five trading days, the losses were muted in nature. As a result, the NYSE ARCA Airline Index has increased, albeit marginally, to $58.35 over the past five trading days. Over the past six months, the NYSE ARCA Airline Index has plummeted 23.2%..
What's Next in the Airline Space?
Stay tuned for the usual news updates on the space.
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Airline Stock Roundup: ALGT's Q3 Loss, RYAAY's Rosy Traffic in October & More
In the past week, Allegiant Travel Company (ALGT - Free Report) reported a wider-than-expected loss per share for third-quarter 2022 due to high costs. Ryanair Holdings (RYAAY - Free Report) posted upbeat traffic data for October, driven by the buoyant air-travel demand scenario. Mirroring the labor woes for U.S. airlines, United Airlines’ (UAL - Free Report) pilots voted down the tentative deal that its union had inked with the airline.
Read the last Airline roundup here.
Recap of the Latest Top Stories
1 Allegiant Travel reported a third-quarter 2022 loss (excluding $2.04 from non-recurring items) of 54 cents per share, wider than the Zacks Consensus Estimate of a loss of 47 cents. Operating revenues of $560.3 million beat the Zacks Consensus Estimate of $556.6 million and increased 21.9% on a year-over-year basis.
Passenger revenues, accounting for the bulk (92.2%) of the top line, rose 21.9% on a year-over-year basis. The upside can be attributed to improved air-travel demand. Air traffic (measured in revenue passenger miles or RPMs) for scheduled service climbed 15.7% in the quarter under review. Capacity (measured in available seat miles or ASMs) inched up 0.1% year over year. Load factor increased 1190 basis points to 88.5% in the reported quarter as traffic surge outweighed capacity expansion.
Operating cost per available seat miles (CASM), excluding fuel and effects of Hurricane Ian, for the total system escalated to 7.81 cents from 6.18 cents a year ago. Average fuel cost per gallon (scheduled) shot up in excess of 75% to $3.84 in the quarter. Total scheduled service passenger revenue per available seat miles rose 21.2% to 12.60 cents. ALGT exited the September quarter with 116 planes in its fleet. Fleet size at the end of 2022 is expected to be 123.
For fourth-quarter 2022, fuel cost per gallon is expected to be $3.75. Total operating revenues are likely to increase in the 26.5-28.5% band from fourth-quarter 2019 actuals. Non-fuel unit costs are likely to increase in the 13-15% range. Capacity for scheduled service and total system are likely to increase 13.5% and 15%, respectively, from respective fourth-quarter 2019 actuals.
2. In October, RYAAY flew 15.7 million passengers, the highest-ever traffic volume at RYAAY in the said month. Last October, only 11.4 million passengers were transported by RYAAY. Load factor increased to 94% from 84% in October 2021. The number of passengers attracted by RYAAY in October 2022 was 14% higher than the 13.1 million passengers flown in October 2019 (pre-coronavirus era). The stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
.3. Pilots at United Airlines, represented by the Air Line Pilots Association, voted against a pay-related tentative deal inked a few months ago. 9,980 UAL pilots participated in the voting procedure with an overwhelming 94% casting votes against the deal. They believed that the terms fell short of their expectations. Pilots will now commence a series of informational picketing events to convince UAL to resume talks to finalize an agreement.
4. In a similar development, American Airlines’ (AAL - Free Report) pilots reportedly voted down an offer by the company as they believe, the current offer does not match their expectations. Per the Allied Pilots Association, the union representing the pilots, its board voted down the offer 15-5. The turned-down proposal included pay raises of 19% in three steps over a two-year duration. The rejection highlights labor problems for U.S. airlines as they grapple with pilot shortage in the face of a strong rebound in air-travel demand.
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 even though most airline stocks have traded in the red over the five trading days, the losses were muted in nature. As a result, the NYSE ARCA Airline Index has increased, albeit marginally, to $58.35 over the past five trading days. Over the past six months, the NYSE ARCA Airline Index has plummeted 23.2%..
What's Next in the Airline Space?
Stay tuned for the usual news updates on the space.