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Airline Stock Roundup: CPA's Q3 Earnings Beat, UAL's 737 Max Update & More

In the past week, Latin American carrier — Copa Holdings CPA — outperformed with respect to the top and bottom lines in third-quarter 2019. Both metrics also improved on a year-over-year basis. Results were aided by an uptick in passenger revenues as demand for air travel remained solid.

On the non-earnings front, United Airlines UAL extended the grounding period of the Boeing 737 Max jets in its fleet. Currently, this Chicago-based carrier has 14 such jets. Additionally, October traffic reports from JetBlue Airways JBLU, Alaska Air Group ALK and Allegiant Travel Company ALGT grabbed headlines.

While load factor (% of seats filled by passengers) declined at JetBlue and Alaska Air as capacity expansion outweighed traffic growth, the measure improved at Allegiant due to higher traffic growth.

(Read the last Airline Stock Roundup here).

Recap of Past Week’s Most Important Stories

1. Copa Holdings’ third-quarter 2019 earnings of $2.45 per share surpassed the Zacks Consensus Estimate by 14 cents. The bottom line also soared 80.2% year over year on higher revenues and low fuel costs. Furthermore, quarterly revenues increased 5.3% to $708.2 million and outpaced the Zacks Consensus Estimate of $701 million. This upside was owing to a 5.6% increase in passenger revenues. Notably, passenger revenues accounted for bulk of the top line (96.8%) in the September quarter. (Read more: Copa Holdings Shares Up on Q3 Earnings & Revenue Beat)

2. United Airlines joined other U.S. carriers — Southwest Airlines LUV and American Airlines AAL — in extending the grounding period of Boeing 737 Max jets until March, 2020. United Airlines has suspended operations of its Boeing 737 Max jets until Mar 4, 2020, extending the grounding period from the previously announced Jan 6. According to a CNBC report, as a result of the extension the carrier expects to cancel approximately 5,100 flights in November and December, 2019, and roughly 3,468 flights next year.

United Airlines carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

3. At JetBlue, traffic (measured in revenue passenger miles or RPMs) for October increased 6.2% year over year to 4.31 billion. Consolidated capacity (measured in available seat miles/ASMs) expanded 6.7% to 5.22 billion on a year-over-year basis. This Long Island City, NY-based low-cost carrier registered a completion factor (system-wide) of 99.6% in October, with 80.7% flights on schedule. JetBlue still expects fourth-quarter RASM to decline between 0.5% and 3.5% year over year. (Read more: JetBlue's Traffic Rises, Load Factor Falls in October)

4. At Alaska Air Group, consolidated traffic increased 3.4% to 4.63 billion. Moreover, consolidated capacity expanded 3.6% to 5.53 billion. Load factor contracted 10 basis points to 83.7% in October. In the first 10 months of 2019, load factor increased 40 bps to 84.2%. (Read more: Alaska Air Group's Load Factor Declines in October)

5 At Allegiant, October traffic for scheduled service inched up 2.2% on a year-over-year basis. Scheduled capacity increased 1.7% to 1.14 billion in the month. With traffic growth exceeding capacity expansion, load factor improved 30 basis points year over year to 83.1% in October. The number of departures for scheduled service climbed 3.7% on a year-over-year basis. (Read more: Allegiant Posts Impressive October Traffic Statistics)

Performance

The following table shows the price movement of the major airline players over the past week and during the past six months.

The table above shows that airline stocks exhibited a mixed trend with respect to price in the past week. The NYSE ARCA Airline Index increased marginally to $109.12 in the period. Over the course of six months, the index appreciated 11.5%.

What's Next in the Airline Space?

With the third-quarter 2019 earnings season over, stay tuned for usual new updates in the space.

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United Airlines Holdings Inc (UAL): Free Stock Analysis Report

American Airlines Group Inc. (AAL): Free Stock Analysis Report

JetBlue Airways Corporation (JBLU): Free Stock Analysis Report

Alaska Air Group, Inc. (ALK): Free Stock Analysis Report

Allegiant Travel Company (ALGT): Free Stock Analysis Report

Copa Holdings, S.A. (CPA): Free Stock Analysis Report

Southwest Airlines Co. (LUV): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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