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In the past week, Ryanair Holdings (RYAAY - Free Report) lowered its profitability forecast for fiscal 2019 (ending Mar 31, 2019). Anticipated low airfares for winter induced the European carrier to trim its view.
Moving across the Atlantic to the United States, Spirit Airlines (SAVE - Free Report) raised its fourth-quarter view for total revenues per available seat miles (TRASM: a key measure of unit revenues). The Miramar, FL-based carrier, which is expected to reveal its fourth-quarter results on Feb 5, attributed the decision to strong yields during the peak season.
Meanwhile, ManaAir LLC — a United Airlines joint venture — completed the previously announced ExpressJet Airlines buyout. Notably, United Airlines is United Continental’s (UAL - Free Report) wholly-owned subsidiary.
Copa Holdings (CPA - Free Report) was another major newsmaker, courtesy of its December traffic report. Load factor (% of seats filled by passengers) declined at this Latin-American carrier as traffic growth was outpaced by capacity expansion.
1. Ryanair expects profit after tax in the €1-€1.1 billion range compared with €1.1-€1.2 billion projected earlier. Winter fares are anticipated to decline 7% year over year, wider than the earlier projection of a 2% decrease. The guidance, however, excludes data from the LaudaMotion unit, which was acquired by Ryanair in calendar 2018. Start-up losses from the unit are expected to be €140 million in fiscal 2019. (Read more: Ryanair Trims FY19 Profit Forecast, Stock Down 3%).
2. Spirit Airlines now expects total revenue per available seat miles (TRASM: a key measure of unit revenues) to increase approximately 11.4% year over year (the earlier view had called for this metric to increase approximately 11%). The carrier expects capacity to expand 16.2% in the soon-to-be-reported quarter, higher than the prior estimate of a 15% increase.
This Zacks Rank #1 (Strong Buy) carrier expects non-fuel unit costs (adjusted) to increase 5.5% (earlier the company had predicted the metric to rise 5-5.5% year over year). Economic fuel cost is now projected to be $2.26 per gallon compared with $2.27 estimated earlier. You can see the complete list of today’s Zacks #1 Rank stocks here.
3. At Copa Holdings, consolidated traffic (measured in revenue passenger miles or RPMs) for December came in at 1.9 billion, up 5.3% from the year-ago figure. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 6% to 2.3 billion. For full-year 2018, Copa Holdings generated RPMs of 21.5 billion (up 8.1% year over year) and ASMs of 25.8 billion (up 7.9% year over year) (read more: Copa Holdings' December Traffic Rises, Load Factor Down).
4. SkyWest’s (SKYW - Free Report) erstwhile subsidiary, ExpressJet Airlines, has been taken over by ManaAir LLC. At the time of announcing the deal in December 2018, SkyWest had said that it is valued at $70 million. ExpressJet, which flies for United Airlines, aims to expand its fleet size with 25 new dual-class Embraer E175 jets in 2019. First of the 25 planes is scheduled to be delivered in April.
In another development, ExpressJet increased its pilot sign-on bonus to $22,000. Pilots with an eligible type rating will receive an additional $5,000. We believe, the move is aimed at combating the shortage of pilots bothering regional carriers.
Price 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 majority of the airline stocks traded in the red over the last week leading to the NYSE ARCA Airline Index’s decline over the past week. Over the course of six months, the sector tracker decreased 6% despite impressive gains at the likes of GOL Linhas and Spirit Airlines.
What's Next in the Airline Space?
Industry heavyweights American Airlines (AAL - Free Report) , Alaska Air Group, JetBlue Airways and Southwest Airlines (LUV - Free Report) are scheduled to report their respective fourth-quarter results on Jan 24.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
Image: Bigstock
Airline Stock Roundup: RYAAY's Bearish FY19 Profit View, SAVE, CPA in Focus
In the past week, Ryanair Holdings (RYAAY - Free Report) lowered its profitability forecast for fiscal 2019 (ending Mar 31, 2019). Anticipated low airfares for winter induced the European carrier to trim its view.
Moving across the Atlantic to the United States, Spirit Airlines (SAVE - Free Report) raised its fourth-quarter view for total revenues per available seat miles (TRASM: a key measure of unit revenues). The Miramar, FL-based carrier, which is expected to reveal its fourth-quarter results on Feb 5, attributed the decision to strong yields during the peak season.
Meanwhile, ManaAir LLC — a United Airlines joint venture — completed the previously announced ExpressJet Airlines buyout. Notably, United Airlines is United Continental’s (UAL - Free Report) wholly-owned subsidiary.
Copa Holdings (CPA - Free Report) was another major newsmaker, courtesy of its December traffic report. Load factor (% of seats filled by passengers) declined at this Latin-American carrier as traffic growth was outpaced by capacity expansion.
(Read the last Airline Stock Roundup for Jan 16, 2019)
Recap of the Past Week’s Most Important Stories
1. Ryanair expects profit after tax in the €1-€1.1 billion range compared with €1.1-€1.2 billion projected earlier. Winter fares are anticipated to decline 7% year over year, wider than the earlier projection of a 2% decrease. The guidance, however, excludes data from the LaudaMotion unit, which was acquired by Ryanair in calendar 2018. Start-up losses from the unit are expected to be €140 million in fiscal 2019. (Read more: Ryanair Trims FY19 Profit Forecast, Stock Down 3%).
2. Spirit Airlines now expects total revenue per available seat miles (TRASM: a key measure of unit revenues) to increase approximately 11.4% year over year (the earlier view had called for this metric to increase approximately 11%). The carrier expects capacity to expand 16.2% in the soon-to-be-reported quarter, higher than the prior estimate of a 15% increase.
This Zacks Rank #1 (Strong Buy) carrier expects non-fuel unit costs (adjusted) to increase 5.5% (earlier the company had predicted the metric to rise 5-5.5% year over year). Economic fuel cost is now projected to be $2.26 per gallon compared with $2.27 estimated earlier. You can see the complete list of today’s Zacks #1 Rank stocks here.
3. At Copa Holdings, consolidated traffic (measured in revenue passenger miles or RPMs) for December came in at 1.9 billion, up 5.3% from the year-ago figure. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 6% to 2.3 billion. For full-year 2018, Copa Holdings generated RPMs of 21.5 billion (up 8.1% year over year) and ASMs of 25.8 billion (up 7.9% year over year) (read more: Copa Holdings' December Traffic Rises, Load Factor Down).
4. SkyWest’s (SKYW - Free Report) erstwhile subsidiary, ExpressJet Airlines, has been taken over by ManaAir LLC. At the time of announcing the deal in December 2018, SkyWest had said that it is valued at $70 million. ExpressJet, which flies for United Airlines, aims to expand its fleet size with 25 new dual-class Embraer E175 jets in 2019. First of the 25 planes is scheduled to be delivered in April.
In another development, ExpressJet increased its pilot sign-on bonus to $22,000. Pilots with an eligible type rating will receive an additional $5,000. We believe, the move is aimed at combating the shortage of pilots bothering regional carriers.
Price 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 majority of the airline stocks traded in the red over the last week leading to the NYSE ARCA Airline Index’s decline over the past week. Over the course of six months, the sector tracker decreased 6% despite impressive gains at the likes of GOL Linhas and Spirit Airlines.
What's Next in the Airline Space?
Industry heavyweights American Airlines (AAL - Free Report) , Alaska Air Group, JetBlue Airways and Southwest Airlines (LUV - Free Report) are scheduled to report their respective fourth-quarter results on Jan 24.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
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