Airline Stock Roundup: JetBlue, Delta and United Airlines in Focus - Analyst Blog

Airline stocks remained low-keyed over the past 5 trading sessions due to almost muted market activity. While U.S. oil prices slipped last week on supply data that was relatively stronger than expected, Brent crude – the global price benchmark – continued to trade higher, close to its  nine-month high, given intensifying turmoil in Iraq. Consequently, airline stocks felt the pressure. Further, FOMC's downward revisions in GDP growth estimate likely added to the market woes for these stocks.

The past week's major events include expansion plans undertaken by United Airlines and Delta Airlines Inc. DAL. The release of the annual integrated report on airline performance by Southwest Airlines Co. LUV also remained in the limelight.

Recap of Last Week's Most Important Stories

1.    United Airlines – the wholly owned subsidiary of United Continental Holdings Inc. UAL announced its plans to introduce a daily service between Santiago, Chile and George Bush International Airport in Houston from Dec 7, 2014. The carrier also expects to begin services to Dominican Republic and Belize from Dec 20. All the new route launches are subject to regulatory approvals. (Read More: United Airlines to Extend Latin and Central American Network)

2.    Delta Airlines further strengthened its Seattle hub by launching a non-stop service to Hong Kong on June 16. The Atlanta-based airline is operating flights on the Hong-Kong route all days of the week except Sunday. Delta will operate a 234 capacitor Airbus 330-200 aircraft for the route having both business and economy class cabins powered with in-flight Wi-Fi. (Read More: Delta's Non Stop Seattle-Hong Kong Service Takes Off)

3.    JetBlue Airways Corporation JBLU flagged off Mint − its premium service offering, between New York's John. F. Kennedy (JFK) and Los Angeles International Airport (LAX) – at an attractive one way fare of $599. Mint includes 16 lie-flat first class seats including 4 private suits, which will be the widest and the longest seats available within the domestic market. The airline has also tied up with leading New-York city based restaurant Saxon + Parole to provide a specially designed menu for Mint passengers on board. (Read More: JetBlue's Mint to Beef Up Comfort Travel)

4.    Southwest Airlines released its fifth annual integrated report – 2013 One Report. The report, based on three fundamentals, namely performance, people and planet, highlights the productivity and efficiency in the company's operations over the past one year. The 2013 One Report achieved a Global Reporting Initiative GRI B+ level.

5.    American Airlines Group Inc. AAL announced the expansion of its domestic and international service from Los Angeles International Airport (LAX). The latest expansion strategy offers increased access to customers across the carrier's global network through one of its key hubs.

Performance

The following table shows the price movement of the major airline players over the past 5 trading days and during the last 6 months:

Over the trailing 5 trading sessions, all the airline stocks listed above exhibited price declines, except American Airlines, which gained 1.2%. 

Biggest losers over the period were United Continental Holdings, GOL LinhasAereas SA GOL and Hawaiian Holdings, Inc HA, with their stock prices declining 4.5%, 3.3% and 2.5%, respectively.

Over the past 6 months, most of the stocks have fared reasonably well with the exception of Copa Holdings, which has dropped 9.2% over the period. The biggest gainers in the 6-month span were American Airlines Group and Hawaiian Holdings, sporting growth of 64.5% and 50%, respectively.

What's Cooking in the Airline Biz?

In the current week, we foresee no significant recovery in the global as well as the U.S. market that can uplift the price potential of airline stocks. As a result, we continue to expect sluggish trading for the remainder of this week.

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