Airline Stock Roundup: United Continental, Southwest and Delta in Headlines - Analyst Blog

Airline stocks reflected a mixed trend in the past week's trading sessions. While some stocks reacted positively to the International Air Transport Association (IATA) data, some stocks recorded a lackluster week.

Stocks like United Continental Holdings Inc. ( UAL ) and Southwest Airlines Co. ( LUV ) made headlines for gaining altitude in share prices. Delta Airlines Inc. ( DAL ) was also in the limelight for its deal with Airbus.

Recap of Last Week's Most Important Stories

1. One of the major events past week was the International Air Transport Association's (IATA) profit guidance. Last week, IATA announced its 2014 profit outlook for the global airline industry, which has been trimmed down by $700 million from the previous forecast to $18 billion. While IATA chief economist Brian Pearce remains hopeful about the performance of Middle East and North American aviation companies, a slowdown in China's economy and volatile global trade are key factors that force a conservative outlook on this year's industry profits.

2. United Continental gained significant momentum on Monday last week driven by IATA's bullish view on the North American airline industry. The stock gained $2.33 or 5.25% on Jun 2 in NYSE. Notably, the Chicago-based carrier also ended the day substantially higher than the NYSE Composite. (Read More: United Continental Shares Gain Altitude )

3. Another major airline that registered a notable takeoff was Southwest Airlines , which reached a fresh 52-week high of $27.22 last week on Jun 3, before closing the trading session a little lower at $27.20. This reflected a solid return of over 95% in the past 12 months. Moreover, the company's expected long-term earnings growth rate of 30.8% also makes the stock appear attractive. (Read More: Southwest Airlines Hits 52-Week High Anew )

4. Last week, Delta Airlines announced plans to purchase 15 new jets from Airbus in a deal worth $1.65 billion. The company has ordered 15 narrow bodied A-321 aircraft, with deliveries scheduled 2018 onward. This fleet will replace some of Delta's less efficient domestic aircraft. (Read More: Delta Extends Airbus Order )

Delta Airlines also reported its traffic for May 2014, which was driven by strong demand in both the domestic and transatlantic markets. Strength in Atlanta, New York and Seattle boosted the carrier's performance and airline traffic moved up 5.8% year over year to 17.73 billion.

5. Another major news from the past week include American Airlines Group Inc. ( AAL ) subsidiary U.S. Airways' Codeshare Agreement with Air Berlin PLC & Co, which is also a member of Oneworld airline alliance. The new agreement will foster relation between the two air carriers and provide passengers of U.S. Airways better access to Germany and other European destinations.


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

Company Last 5 Days Last 6 Months
AAL 1.96% 75.48%
ALK -0.49% 34.14%
CPA 0.32% -7.52%
DAL -0.59% 46.22%
GOL 7.66% 30.17%
HA -0.69% 82.28%
JBLU 3.51% 28.07%
LUV -0.26% 47.51%
SAVE 1.90% 115.45%
UAL 1.90% 26.89%

Over the trailing 5 trading days, most of the airline stocks exhibited mixed stock price movements.

Top gainers include GOL Linhas ( GOL ), JetBlue Airways ( JBLU ) and American Airlines Group Inc. ( AAL ) with growth of 7.7%, 3.5% and 2.0% respectively. On the flip side, the biggest losers were Hawaiian Holdings, Inc ( HA ), Delta Air Lines and Alaska Air Group, Inc. ( ALK ) with stocks down 0.7%, 0.6% and 0.5%, respectively.

In terms of performance over the past 6 months, most of the stocks have fared reasonably well with the exception of Copa Holdings, which dropped 7.5% over the period. The biggest gainers in the 6-month span were Spirit Airlines, Inc. ( SAVE ) and Hawaiian Holdings, sporting growth of 115.5% and 82.3%, respectively.

What's Next in the Airline Biz?

So far this week, major carriers like United Continental and Southwest Airlines have posted their May 2014 operational performance results. Both airline companies recorded growth in their traffic results.

Further, just couple of months after initially hinting at plans to sell LiveTV, JetBlue has divested its in-flight entertainment subsidiary to French defence electronics company Thales Group for a cash consideration of $399 million

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SOUTHWEST AIR (LUV): Free Stock Analysis Report

JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report

GOL LINHAS-ADR (GOL): Free Stock Analysis Report

DELTA AIR LINES (DAL): Free Stock Analysis Report

UNITED CONT HLD (UAL): Free Stock Analysis Report

SPIRIT AIRLINES (SAVE): Free Stock Analysis Report

HAWAIIAN HLDGS (HA): Free Stock Analysis Report

AMER AIRLINES (AAL): Free Stock Analysis Report

ALASKA AIR GRP (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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