Airline Stock Roundup: ALGT, CPA's Q1 Outperformance, JBLU's Puerto Rico Expansion

In the past week, Allegiant Travel Company ALGT and Copa Holdings CPA reported better-than-expected earnings per share and revenues for first-quarter 2024. The results were aided by higher passenger volumes. Meanwhile, Azul’s AZUL earnings and revenues fell short of expectations.

JetBlue Airways JBLU was also in the news as it announced plans to expand its network in Puerto Rico, courtesy of the upbeat air travel demand scenario. Delta Air Lines DAL expects a busy summer this year with its largest international schedule to date.

Recap of the Recent Most Important Stories

1 Allegiant’s first-quarter 2024 earnings of 57 cents beat Zacks Consensus Estimate of 51 cents but declined 81.3% year over year. Operating revenues of $656.4 million surpassed the Zacks Consensus Estimate of $648.4 million and increased 1% on a year-over-year basis. Passenger revenues, which accounted for the bulk (88%) of the top line, fell 4.8% on a year-over-year basis. Allegiant expects to end 2024 with a fleet size of 126.

Allegiant currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

2. To boost its presence in Puerto Rico, JetBlue’s management announced that from October, it would add flights to six new destinations from its capital city, San Juan. The new destinations include Providence, Santiago, St. Croix and Westchester County. Flights to these places will operate on a daily basis. Flights on the San Juan-Medellín, Colombia route will operate four times a week, and those on the San Juan-Cancún, Mexico route will operate thrice a week. Moreover, to boost the flying experience of passengers, JBLU will offer its Mint service on a daily basis between San Juan and New York's John F. Kennedy International Airport from July. Management has also decided to make its Mint service available on more flights, including those to Phoenix and Vancouver.

3 Copa Holdings’ first-quarter 2024 earnings per share of $4.19 surpassed the Zacks Consensus Estimate of $3.27 and increased 3.99% year over year. Revenues of $893.5 million beat the Zacks Consensus Estimate of $846.2 million and rose 3% year over year on the back of upbeat passenger revenues. Passenger revenues (which contributed 96% to the top line) increased 3% from first-quarter 2023, owing to higher passenger traffic. Cargo and mail revenues fell 5.8% to $21.9 million due to lower cargo yields. Other operating revenues were $12.8 million, increasing 28.4% year over year. CPA’s management still expects consolidated capacity to grow 10% year over year.

4. Azul incurred a loss (excluding $1.38 from non-recurring items) of 57 cents per share in the first quarter of 2024, wider than the Zacks Consensus Estimate of a loss of 53 cents. Loss per share was 50 cents in the first quarter of 2023. Total revenues of $945 million lagged the Zacks Consensus Estimate of $968.2 million but increased year over year. The year-over-year top-line improvement was mainly due to robust growth in passenger revenues. With more people taking to the skies, Azul’s passenger revenues, contributing 93.1% to the top line, increased 4.5% year over year (on higher total capacity). Cargo and other revenues grew 4.2% year over year. For 2024, AZUL estimates EBITDA to be around R$6.5 billion, 79% higher than the 2019 level.

5. Delta’s management expects that nearly 3 million passengers will avail DAL flights during the Memorial Day holiday travel period (May 23-27), the traditional start of summer. The projection reflects a 5% increase from the 2023 levels. Apart from the summer schedule expansion, DAL is making several fleet-related adjustments to enhance the travel experience of passengers. This summer, DAL intends to operate more than 1,770 weekly flights to 80 international destinations. The schedule reflects nearly a 6% capacity increase from 2023 levels in terms of both domestic and international seats. 

DAL was in the news recently when it announced that it intends to restart Nigeria fights from December. The story was covered in detail in the previous week’s write-up.

Performance

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

Zacks Investment Research
Image Source: Zacks Investment Research

The table above shows that most airline stocks traded in the green over the past week. The NYSE ARCA Airline Index increased 2.1% to $63.67. Over the course of the past six months, the NYSE ARCA Airline Index has gained 17.6%.

What’s Next in the Airline Space?

With the first-quarter 2024 earnings season over for airlines, the focus will once again shift to news-related updates. With air travel demand remaining buoyant and Airlines for America projecting U.S. carriers to be extremely busy during the upcoming summer season, updates pertaining to the expansion of network by various carriers cannot be ruled out in the coming days.

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Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report

JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report

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

Allegiant Travel Company (ALGT) : Free Stock Analysis Report

AZUL (AZUL) : 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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