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The Zacks Analyst Blog Highlights: Delta Air Lines, Southwest Airlines, Alaska Air Group and United Continental Holdings

For Immediate Release

Chicago, IL - September 10, 2015 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Delta Air Lines ( DAL ), Southwest Airlines ( LUV ), Alaska Air Group ( ALK ) and United Continental Holdings ( UAL ).

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Here are highlights from Wednesday's Analyst Blog:

Airline Stock Roundup

The past week saw airline heavyweights like Delta Air Lines ( DAL ), Southwest Airlines ( LUV ) and Alaska Air Group ( ALK ) revealing traffic data for Aug 2015. While air traffic increased across the board, another key metric - load factor (% of seats filled by passengers) - declined as capacity growth outpaced the rise in traffic for each of the above carriers.

Additionally, the sudden resignation of United Continental Holdings' ( UAL ) chief executive officer (CEO) Jeff Smisek made for some unexpected noise in the space. The resignation is all the more significant as it comes in the middle of a government probe into the carrier's alleged irregularities to favor an ex-Port Authority Chairman. The International Air Transport Association's (IATA) disclosure of strong global traffic data for July also grabbed headlines over the past week that was a day short on trading owing to the Labor Day holiday on Sep 7.

On the price front, the NYSE ARCA Airline index gained 2.49% over the past week as oil prices remained weak.

(Read the last Airline Stock Roundup for Sep 2, 2015 .)

Recap of the Past Week's Most Important Stories

1. Delta revealed 3.9% year-over-year growth in air traffic for August. However, PRASM woes persisted with the key metric declining 6.5% in the month. As has been the case over the past few months, the key metric among other factors was negatively impacted by the strength of the U.S. dollar (read more: Delta Air Lines' August Traffic Trends Up, PRASM Woes Stay ).

2. Alaska Air Group unveiled impressive traffic results for Aug 2015. Traffic - measured in revenue passenger miles (RPMs) - came in at 3.09 billion on a consolidated basis, reflecting a year-over-year improvement of 7%. Consolidated capacity (or available seat miles/ASMs) improved 7.7% to 3.57 billion (read more: Alaska Air Group August Traffic Up 7% Y/Y, Stock Gains ).

3. The ongoing internal investigation as well as the federal probe pertaining to United Continental Holdings alleged improper dealings with the Port Authority of New York and New Jersey resulted in a change at the helm of the Chicago-based carrier. United Continental stated that Jeff Smisek has resigned with immediate effect from his roles as chairman, president and CEO and as a director of United Continental, the parent company of United Airlines.

Smisek has been replaced by Oscar Munoz, who was the CEO at the Jacksonville, FL-based railroad operator CSX Corporation. Additionally, he also served as a board member at United Continental.

The replacement of Smisek by Munoz was not the only change announced by United Continental. The company appointed Henry L. Meyer III, the carrier's lead independent director, as the non-executive chairman of its board. The ongoing probes also claimed two other victims, with the company's executive vice president of communications and government affairs and its senior vice president of corporate and government affairs joining Smisek on his way out.

The federal probe, which apparently led to the multiple management changes at United Continental, is related to the carrier's alleged favors to the former Chairman of the Port Authority, David Samson. The carrier was allegedly looking to make public investments in the Newark Airport.

The investigation is seeking to find out whether the carrier, under Smisek, operated direct flights on the non-profitable Newark-Columbia, SA route, solely to favor Samson's frequent visits to South Carolina as he allegedly has a home in the area. The route was discontinued following Samson's exit from the Port Authority in 2014. The carrier launched its own investigations into the above alleged irregularities earlier this year following the commencement of a government probe.

4. Traffic at Southwest Airlines climbed 7.5% to 10.3 billion in Aug 2015 from the comparable month a year ago. On a year-over-year basis, consolidated capacity increased 7.6%. Meanwhile, load factor declined 10 basis points to 85.4%. The carrier still projects operating revenue per ASM to decline approximately 1% in the third quarter of 2015 compared with the year-ago period.

5. The monthly data released by the IATA revealed an 8.2% year-over-year increase in demand for air travel across the globe for the month of July 2015. The rise was attributable to an increase in both international and domestic traffic. Results were boosted by the favorable timing of Ramadan this year (read more: Strong Global Traffic Data in July, Fall Forecast Disappoints ).

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DELTA AIR LINES (DAL): 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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