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Airline Stock Roundup: CPA's Dismal Q2 Earnings, ALK's Bizarre Incident & More

In the past week, Latin American carrier - Copa Holdings, S.A.CPA - unveiled disappointing numbers for the second quarter of 2018, wherein earnings and revenues missed estimates. Results were hurt by high fuel costs and the Panama-Venezuela row, which caused several flight cancellations in April.

On the non-earnings front, Alaska Air Group, Inc. ALK was the primary news maker by virtue of the plane theft and subsequent crash of one of its planes. The incident involved a ground-services worker (Richard Russell) at Alaska Air's subsidiary - Horizon Air. Russell entered an empty Bombardier Q400 turboprop plane parked at the maintenance area of the Seattle-Tacoma International Airport. He took control of the airplane and flew for quite some time (often erratically) before his death following the crash on Ketron Island in Puget Sound.

On the traffic front, the likes of JetBlue Airways Corporation JBLU , SkyWest, Inc. SKYW and United Continental Holdings, Inc.'s UAL wholly owned subsidiary, United Airlines, revealed their respective traffic figures for July.

(Read the last Airline Stock Roundup for Aug 08, 2018 )

Recap of the Past Week's Most Important Stories

1. Copa Holdings' second-quarter earnings of $1.18 per share missed the Zacks Consensus Estimate of $1.28. Moreover, the bottom line plunged significantly year over year. However, the top line increased substantially to $634.1 million, primarily driven by 10.5% growth in passenger revenues. Nonetheless, the metric fell short of the consensus mark of $652.8 million (read more: Copa Holdings Q2 Earnings Lag Estimates, Plunge Y/Y ).

2. The Richard Russel incident at Alaska Air has attracted attention from across the globe and raised questions as to how a non-pilot (who has been described as suicidal by authorities) could start, control and fly a complex modern aircraft. The plane theft has also raised questions about security and is being probed by various agencies (read more: Alaska Air Down 14% YTD, Plane Theft & Crash Raise Concerns ).

3. At JetBlue, traffic - measured in revenue passenger miles (RPMs) - improved 6.2% year over year to 4.76 billion. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) expanded 4.1% to 5.35 billion (read more: JetBlue's July Traffic Solid on High Travel Demand ).

4. At United Airlines, consolidated traffic improved 6.9% from the year-ago figure owing to impressive demand for air travel. Meanwhile, consolidated capacity (or available seat miles/ASMs) rose 4%. As traffic growth outpaced capacity expansion, load factor (percentage of seats occupied by passengers) expanded 240 basis points to 89.3% (read more: United Continental Arm Posts Robust July Traffic Statistics ).

5 SkyWest reported a 5.6% (9,100) year-over-year decline in block hours (a measure of aircraft utilization) to 153,309 in July 2018. The regional carrier, which remains focused on streamlining its operations, stated that the fall in the metric was in sync with its fleet transition plans (read more: SkyWest July Block Hours Fall, Load Factor Rises ).

SkyWest sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Price Performance

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

Company Past Week Last 6 months
HA 2.9% 9.3%
UAL -2.1% -3%
GOL -15.5% -4.6%
DAL -1.7% -7.9%
JBLU -0.8% 1.2%
AAL -4.8% -14%
SAVE 0.4% 0.6%
LUV -0.3% 1.8%
CPA -13.8% -3.1%
ALK -4.1% -1.8%

The table above shows that most airline stocks traded in the red over the last week leading to a 2.6% decrease in the NYSE ARCA Airline Index. Shares of Copa Holdings have declined the most (13.8%) in the period due to its lackluster second-quarter results.

Over the course of six months, the sector tracker has decreased 3.1% due to multiple headwinds like high fuel costs. Shares of American Airlines Group Inc. AAL have declined the most (14%) in the period.

What's Next in the Airline Space?

Investors will look forward to further updates on the ongoing labor unrest at European low-cost carrier, Ryanair Holdings plc RYAAY , in the coming days.

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Ryanair Holdings PLC (RYAAY): Free Stock Analysis Report

JetBlue Airways Corporation (JBLU): Free Stock Analysis Report

United Continental Holdings, Inc. (UAL): Free Stock Analysis Report

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

SkyWest, Inc. (SKYW): Free Stock Analysis Report

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

Alaska Air Group, Inc. (ALK): 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.


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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