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On Jul 11, Delta Air Lines (DAL - Free Report) initiated the second-quarter 2024 earnings season for the airline space. This Atlanta-based carrier reported lower-than-expected earnings per share and better-than-expected revenues. Earnings decreased 11.9% on a year-over-year basis. Apart from high costs, the carrier blamed the discounting pressure at the low end of the market, which hurt its pricing power, for the disappointing bottom-line performance. The airline gave a bearish earnings per share view for the September quarter.
Copa Holdings (CPA - Free Report) reported double-digit year-over-year growth in air traffic and capacity in June. United Airlines (UAL - Free Report) has applied for a new daily roundtrip flight between Ronald Reagan Washington National Airport (DCA) and San Francisco International Airport (SFO) with the U.S. Department of Transportation.
Recap of the Latest Top Stories
1 Delta reported second-quarter 2024 earnings (excluding 35 cents from non-recurring items) of $2.36 per share, which marginally missed the Zacks Consensus Estimate of $2.37. Revenues of $16.65 billion surpassed the Zacks Consensus Estimate of $16.25 billion and increased 6.9% year over year, driven by upbeat air travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $15.41 billion, up 5.4% year over year. Management expects adjusted earnings per share between $1.70 and $2 for the third quarter.
In a separate development, DAL inked a strategic cooperation memorandum of understanding with Saudi Arabia's startup airline, Riyadh Air, in a bid to introduce a wide range of benefits for customers traveling between North America, the Kingdom of Saudi Arabia and destinations beyond. Riyadh Air is scheduled to commence operations in 2025. Per the agreement, Delta will operate as Riyadh Air's exclusive partner in North America. This will offer its customers access to multiple destinations in the United States. Conversely, customers of Delta will have access to multiple Saudi Arabian destinations, following the deal. Naturally, Delta’s decision to associate with a carrier that has not started operations yet is aimed at tapping Saudi Arabia’s potential as a favorite tourist spot. Saudi Arabia is focusing immensely on promoting travel to the kingdom as part of its long-term economic growth plan.
2. Per UAL’s latest expansion plan, the DCA-SFO route is likely to offer multiple nonstop options to customers and provide connections from SFO to about two dozen domestic markets within the Western United States, as well as seven international destinations. Apart from the DCA-SFO route proposal, UAL has also applied for its first-ever DCA-Los Angeles flight.
3. Riding on the healthy air travel demand scenario, Copa Holdings reported a 12.3% year-over-year increase in available seat miles (a measure of capacity) for June 2024. Revenue passenger miles (a measure of traffic) rose 12.1%. Copa Holdings currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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 red over the past week. The NYSE ARCA Airline Index declined 1.1% to $55.85. Over the course of the past six months, the NYSE ARCA Airline Index has plummeted 14.3%.
What's Next in the Airline Space?
Second-quarter 2024 earnings reports from United Airlines and Alaska Air Group (ALK - Free Report) are expected on Jul 17 and Jul 18, respectively.
We expect the results of both carriers to be aided by high passenger revenues, owing to upbeat air travel demand. With the summer season partially falling in the second quarter, buoyant air travel demand is likely to have boosted the top line in the quarter under review. However, high labor costs are likely to have dented the performance of these two players.
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Airline Stock Roundup: DAL's Q2 Earnings Miss, CPA's June Traffic Impressive
On Jul 11, Delta Air Lines (DAL - Free Report) initiated the second-quarter 2024 earnings season for the airline space. This Atlanta-based carrier reported lower-than-expected earnings per share and better-than-expected revenues. Earnings decreased 11.9% on a year-over-year basis. Apart from high costs, the carrier blamed the discounting pressure at the low end of the market, which hurt its pricing power, for the disappointing bottom-line performance. The airline gave a bearish earnings per share view for the September quarter.
Copa Holdings (CPA - Free Report) reported double-digit year-over-year growth in air traffic and capacity in June. United Airlines (UAL - Free Report) has applied for a new daily roundtrip flight between Ronald Reagan Washington National Airport (DCA) and San Francisco International Airport (SFO) with the U.S. Department of Transportation.
Recap of the Latest Top Stories
1 Delta reported second-quarter 2024 earnings (excluding 35 cents from non-recurring items) of $2.36 per share, which marginally missed the Zacks Consensus Estimate of $2.37. Revenues of $16.65 billion surpassed the Zacks Consensus Estimate of $16.25 billion and increased 6.9% year over year, driven by upbeat air travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $15.41 billion, up 5.4% year over year. Management expects adjusted earnings per share between $1.70 and $2 for the third quarter.
In a separate development, DAL inked a strategic cooperation memorandum of understanding with Saudi Arabia's startup airline, Riyadh Air, in a bid to introduce a wide range of benefits for customers traveling between North America, the Kingdom of Saudi Arabia and destinations beyond. Riyadh Air is scheduled to commence operations in 2025. Per the agreement, Delta will operate as Riyadh Air's exclusive partner in North America. This will offer its customers access to multiple destinations in the United States. Conversely, customers of Delta will have access to multiple Saudi Arabian destinations, following the deal. Naturally, Delta’s decision to associate with a carrier that has not started operations yet is aimed at tapping Saudi Arabia’s potential as a favorite tourist spot. Saudi Arabia is focusing immensely on promoting travel to the kingdom as part of its long-term economic growth plan.
2. Per UAL’s latest expansion plan, the DCA-SFO route is likely to offer multiple nonstop options to customers and provide connections from SFO to about two dozen domestic markets within the Western United States, as well as seven international destinations. Apart from the DCA-SFO route proposal, UAL has also applied for its first-ever DCA-Los Angeles flight.
3. Riding on the healthy air travel demand scenario, Copa Holdings reported a 12.3% year-over-year increase in available seat miles (a measure of capacity) for June 2024. Revenue passenger miles (a measure of traffic) rose 12.1%. Copa Holdings currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
An update related to June traffic is also available 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.
The table above shows that most airline stocks traded in the red over the past week. The NYSE ARCA Airline Index declined 1.1% to $55.85. Over the course of the past six months, the NYSE ARCA Airline Index has plummeted 14.3%.
What's Next in the Airline Space?
Second-quarter 2024 earnings reports from United Airlines and Alaska Air Group (ALK - Free Report) are expected on Jul 17 and Jul 18, respectively.
We expect the results of both carriers to be aided by high passenger revenues, owing to upbeat air travel demand. With the summer season partially falling in the second quarter, buoyant air travel demand is likely to have boosted the top line in the quarter under review. However, high labor costs are likely to have dented the performance of these two players.