In the past week, SkyWest (SKYW Quick QuoteSKYW - Free Report) , Copa Holdings (CPA Quick QuoteCPA - Free Report) and Allegiant Travel (ALGT Quick QuoteALGT - Free Report) reported fourth-quarter 2023 earnings. While air travel demand remained upbeat, high costs hurt results. An expansion-related update was also available from Delta Air Lines (DAL Quick QuoteDAL - Free Report) in the past week.

Earnings-related updates from the airline space were discussed in the  previous week’s write-up as well.

Recap of the Recent Most Important Stories

1. SkyWest’s fourth-quarter 2023 earnings per share of 42 cents outpaced the Zacks Consensus Estimate of 11 cents. Revenues of $751.8 million lagged the Zacks Consensus Estimate of $790.1 million but improved 10% year over year owing to flying contract rate increases and 2% higher production in fourth-quarter 2023. Additionally, SKYW had $63 million of deferred revenues during the reported quarter under its flying contracts. Revenues from flying agreements (which contributed 96.8% to the top line) grew 11.2% from the year-ago reported figure of $728.26 million. The airline carried 5.2% more passengers in the reported quarter on a year-over-year basis. Departures were 5.1% more on a year-over-year basis. The passenger load factor (percentage of seats filled by passengers) decreased 1.2 points to 83.4%.

SKYW currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

2. ALGT’s fourth-quarter 2023 earnings per share came in at 11 cents against the Zacks Consensus Estimate’s loss of 67 cents. Operating revenues of $611 million outperformed the Zacks Consensus Estimate of $601.5 million but decreased marginally on a year-over-year basis.

Passenger revenues, which accounted for the bulk (91%) of the top line, fell 1.5% on a year-over-year basis. Air traffic (measured in revenue passenger miles) for scheduled service grew 3.2% year over year in the quarter under review. Capacity (measured in available seat miles or ASMs) rose 5.7% from the year-ago number. For the first quarter of 2024, ASM (for scheduled service) is expected to increase 1% on a year-over-year basis. Total system ASM is projected to rise 1% on a year-over-year basis.

3. Copa Holdings’ fourth-quarter 2023 earnings per share of $4.47 (excluding 8 cents from non-recurring items) surpassed the Zacks Consensus Estimate of $3.90 but declined 0.45% year over year. Revenues of $916.9 million beat the Zacks Consensus Estimate of $893.6 million and rose 2.96% year over year on the back of upbeat passenger revenues. Passenger revenues (which contributed 95.9% to the top line) increased 3.2% from fourth-quarter 2022, owing to capacity increase. Cargo and mail revenues fell 2.1% to $26.53 million due to lower cargo yields. Other operating revenues were $11 million, declining 1.6% year over year. CPA’s management expects consolidated capacity to grow 10% year over year.

4. In a bid to expand its network and meet the anticipated demand swell in this year’s winter, Delta has decided to commence service from its Atlanta, New York-JFK and Minneapolis/St. Paul hubs to Barbados, Puerto Plata and Mazatlán. The airline has also decided to add more flights to Curaçao.  Following the expansion, DAL will serve a total of 50 cities in Latin America and the Caribbean next winter.

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 traded in the green over the past week, resulting in the NYSE ARCA Airline Index growing 3.3% to $64.01. Over the course of the past six months, the NYSE ARCA Airline Index has depreciated 5.8%.

What’s Next in the Airline Space?

Stay tuned for further news updates in the space.