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Airline Stock Roundup: AAL & DAL's Israel Flights Update, ALGT's Dull July Traffic
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In the past week, airline heavyweights Delta Air Lines (DAL - Free Report) and American Airlines (AAL - Free Report) announced the extension of the suspension of their respective flights to and from Israel due to the ongoing tensions in the region. Alaska Airlines, the wholly-owned subsidiary of Alaska Air Group (ALK - Free Report) , announced an investment in JetZero, a startup company, in line with its environment-friendly approach. Alaska Air moved a step closer toward acquiring Hawaiian Holdings (HA - Free Report) with the U.S. Department of Justice or DOJ not challenging the deal on antitrust grounds.
Allegiant Travel Company (ALGT - Free Report) reported a decline in scheduled traffic for July. The number of passengers carried was also lower on a year-over-year basis giving rise to fears of a slowdown in air travel demand. A traffic-related update was also available in the previous week’s write-up.
Recap of the Recent Most Important Stories
1 With Israel and the militant group Hamas showing no signs of ending the war in Gaza, DAL has decided to extend the period of suspension of its flights connecting New York-JFK and Tel Aviv to Oct 31 from Aug 31 previously. In its press release, it stated, “Delta is continuously monitoring the evolving security environment and assessing our operations based on security guidance and intelligence reports.” American Airlines has halted its flights between the United States and Tel Aviv through Mar 29, 2025. Customers of AAL and DAL who have already bought tickets for the concerned flights can either rebook, generally at no extra charge, or cancel their trip and seek a refund.
2. Alaska Airlines has invested in JetZero, a pioneering company developing a new blended-wing body or BWB aircraft designed to reduce fuel burn by up to 50% and significantly lowering emissions. JetZero's BWB aircraft features an integrated wing-fuselage design that significantly reduces aerodynamic drag, potentially cutting fuel consumption by 50% compared to traditional designs. This reduction in fuel use can lower carbon emissions and operating costs. Alaska Air aims to achieve net-zero carbon emissions by 2040.
3 In July, ALGT’s scheduled traffic (measured in revenue passenger miles) fell 1.7% year over year. Capacity (measured in available seat miles) for scheduled service grew 2.4% year over year. As traffic failed to outpace capacity expansion, the load factor (percentage of seats filled by passengers) in July 2024 declined to 87.5% from 91.2% a year ago.
4. Alaska Air’s impending $1.9 billion purchase of Hawaiian Holdings moved a step toward completion following clearance of the DOJ hurdle. The DOJ decided not to block the deal after reviewing it for months for possible antitrust implications. The deal still needs to be cleared by the Department of Transportation.
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. The NYSE ARCA Airline Index increased 5.1% to $50.87. Over the past six months, the NYSE ARCA Airline Index decreased by 22.7%.
What’s Next in the Airline Space?
With the earnings season over for airlines, news updates are likely to take center stage. Apart from traffic related news, updates pertaining to air fares and reduced pricing power of airlines cannot be ruled out going forward. With air travel demand recovering post pandemic, airlines are likely to add routes to match the buoyancy.
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Airline Stock Roundup: AAL & DAL's Israel Flights Update, ALGT's Dull July Traffic
In the past week, airline heavyweights Delta Air Lines (DAL - Free Report) and American Airlines (AAL - Free Report) announced the extension of the suspension of their respective flights to and from Israel due to the ongoing tensions in the region. Alaska Airlines, the wholly-owned subsidiary of Alaska Air Group (ALK - Free Report) , announced an investment in JetZero, a startup company, in line with its environment-friendly approach. Alaska Air moved a step closer toward acquiring Hawaiian Holdings (HA - Free Report) with the U.S. Department of Justice or DOJ not challenging the deal on antitrust grounds.
Allegiant Travel Company (ALGT - Free Report) reported a decline in scheduled traffic for July. The number of passengers carried was also lower on a year-over-year basis giving rise to fears of a slowdown in air travel demand. A traffic-related update was also available in the previous week’s write-up.
Recap of the Recent Most Important Stories
1 With Israel and the militant group Hamas showing no signs of ending the war in Gaza, DAL has decided to extend the period of suspension of its flights connecting New York-JFK and Tel Aviv to Oct 31 from Aug 31 previously. In its press release, it stated, “Delta is continuously monitoring the evolving security environment and assessing our operations based on security guidance and intelligence reports.” American Airlines has halted its flights between the United States and Tel Aviv through Mar 29, 2025. Customers of AAL and DAL who have already bought tickets for the concerned flights can either rebook, generally at no extra charge, or cancel their trip and seek a refund.
2. Alaska Airlines has invested in JetZero, a pioneering company developing a new blended-wing body or BWB aircraft designed to reduce fuel burn by up to 50% and significantly lowering emissions. JetZero's BWB aircraft features an integrated wing-fuselage design that significantly reduces aerodynamic drag, potentially cutting fuel consumption by 50% compared to traditional designs. This reduction in fuel use can lower carbon emissions and operating costs. Alaska Air aims to achieve net-zero carbon emissions by 2040.
3 In July, ALGT’s scheduled traffic (measured in revenue passenger miles) fell 1.7% year over year. Capacity (measured in available seat miles) for scheduled service grew 2.4% year over year. As traffic failed to outpace capacity expansion, the load factor (percentage of seats filled by passengers) in July 2024 declined to 87.5% from 91.2% a year ago.
ALGT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
4. Alaska Air’s impending $1.9 billion purchase of Hawaiian Holdings moved a step toward completion following clearance of the DOJ hurdle. The DOJ decided not to block the deal after reviewing it for months for possible antitrust implications. The deal still needs to be cleared by the Department of Transportation.
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 all airline stocks traded in the green over the past week. The NYSE ARCA Airline Index increased 5.1% to $50.87. Over the past six months, the NYSE ARCA Airline Index decreased by 22.7%.
What’s Next in the Airline Space?
With the earnings season over for airlines, news updates are likely to take center stage. Apart from traffic related news, updates pertaining to air fares and reduced pricing power of airlines cannot be ruled out going forward. With air travel demand recovering post pandemic, airlines are likely to add routes to match the buoyancy.