Airline Stock Roundup: CPA's Q3 Earnings Beat, GOL's October Traffic & More

In the past week, Latin American carrier Copa Holdings CPA reported better-than-expected third-quarter 2023 earnings per share. The results were aided by upbeat air travel demand and the company’s cost-reduction actions.

Another Latin American carrier, Gol Linhas GOL, was also in the news courtesy of its impressive traffic report for October. The overall numbers improved as international traffic came roaring back after the pandemic. An expansion-related update was also available from Allegiant Travel Company ALGT in the past week.

Given the upbeat air travel demand scenario, Airlines for America or A4A came up with a bullish forecast for the upcoming Thanksgiving travel period (Nov 17-27). Per A4A, air travel during the Thanksgiving holiday period this year is likely to touch an all-time high.

Recap of the Past Week’s Most Important Stories

1. Copa’s third-quarter 2023 earnings (excluding 33 cents from non-recurring items) of $4.39 per share surpassed the Zacks Consensus Estimate of $3.74 and rose more than 50% year over year. Revenues of $867.7 million, however, missed the Zacks Consensus Estimate of $879.3 million. Revenues improved 7.2% year over year on the back of higher passenger revenues.

Passenger revenues (contributed 96% to the top line) increased 7.6% from third-quarter 2022 actuals, owing to higher load factor (% of seats filled by passengers) and capacity. Cargo and mail revenues fell 11.2% to $23.4 million due to lower cargo volumes and yields. Other operating revenues came in at $10.9 million, up 24.5% year over year, on the back of revenues from non-air ConnectMiles partners.

For 2023, Copa Holdings expects its consolidated capacity to register 13% growth from 2022. Operating margin is expected to be 23%. The load factor is now expected to be around 87% (prior view: 86%).

Updates on the third-quarter earnings report of another Latin American carrier, Gol Linhas, are available in the previous week’s write-up.

2. In October, consolidated revenue passenger kilometers (a measure of air traffic) at Gol Linhas increased 2.6% on a year-over-year basis, while available seat kilometers (a measure of capacity) fell 1.2%. With traffic growth outpacing capacity expansion, the load factor improved to 84.5% from 81.4% in October 2022. The number of flight departures at GOL in October registered a 3.1% year-over-year increase. Consolidated passengers on board rose 8.6% year over year.

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

 3. Per A4A, passenger volume is expected to be nearly 30 million over the 11-day Thanksgiving travel period. Riding on the buoyant air traffic scenario, Delta Air Lines DAL expects approximately 6 million passengers to avail its flights in the Nov 18-29 timeframe. The forecast implies that nearly 50,000 passengers are likely to fly per day. American Airlines AAL expects the busiest-ever Thanksgiving travel period this year.

4. In a bid to expand its network to meet the buoyant air travel demand scenario, Allegiant announced the introduction of 12 new nonstop routes to popular vacation destinations. The new flights, which take effect in spring 2024, will expand the airline's network options in 22 cities around the United States.

Price Performance

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

Zacks Investment Research
Image Source: Zacks Investment Research

The table above shows that all airline stocks traded in the green over the past week. Consequently, the NYSE ARCA Airline Index rose 11.2% to $54.15 over the past week. Over the course of six months, the sector tracker decreased 10.1%.

What's Next in the Airline Space?

Stay tuned for the usual news updates in the space.

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

Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report

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

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Allegiant Travel Company (ALGT) : 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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