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The Zacks Analyst Blog Highlights: United Continental Holdings, Spirit Airlines, GOL Linhas Aereas Inteligentes S.A., American Airlines Group and Southwest Airlines

For Immediate Release

Chicago, IL - June 23, 2016 - 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 United Continental Holdings, Inc. ( UAL ), Spirit Airlines ( SAVE ), GOL Linhas Aereas Inteligentes S.A. ( GOL ), American Airlines Group ( AAL ) and Southwest Airlines ( LUV ).

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Here are highlights from Wednesday's Analyst Blog:

Airline Stock Roundup

The past week saw United Continental Holdings, Inc. ( UAL ) issuing an improved outlook with respect to passenger revenue per available seat mile (PRASM: a key measure of unit revenue) for the second quarter of 2016. The company, at an investor call, also highlighted its plans to improve financial performance and operations. The announcement found favor with the investors and the stock gained 3.36% on Jun 21 to close at $44.86.

Low-cost carrier Spirit Airlines ( SAVE ) also rallied following its upgrade by Credit Suisse. On the traffic front, Latin American carrier GOL Linhas Aereas Inteligentes S.A. ( GOL ) revealed disappointing numbers for the month of May. Load factor (% of seats filled by passengers) declined as the contraction in traffic was more than that in capacity.

Meanwhile, according to the employment data for passenger airlines, there was a substantial year-over-year increase in full-time equivalent (FTE) employment this April.

On the price front, the NYSE ARCA Airline index gained only 0.26% to $82.98 over the past week.

Read the last Airline Stock Roundup for June 15, 2016 .

TRANSPORTATION-AIRLINE Industry Price Index

Recap of the Past Week's Most Important Stories

1. Chicago-based United Continental Holdings, which has been struggling for long, recently revealed plans to boost revenues, trim costs in a bid to improve its financial performance and gain customers. The company also unveiled an improved PRASM outlook for the second quarter of 2016.

The company now expects the metric to fall in the band of 6.5% to 7.5% (earlier forecast had called for a 6.5% to 8.5% decline). Through the proper execution of its initiatives, the carrier aims to generate additional revenues of $3.1 billion by 2018 ($300 million through operational improvement, $1.5 billion through commercial betterment and $1.3 billion by trimming cost structure).

2. GOL Linhas, weighed down by weak economic conditions and currency headwinds, reported dismal traffic numbers in May with all three key metrics viz. traffic, capacity and load factor moving south. Traffic - measured in revenue passenger kilometers (RPK) - stood at 2.80 billion, down 7.8% from a year ago.

Also, on a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) was down 6.6% to 3.74 billion mainly because of declines of 6.3% and 8.8% in domestic and international capacity, respectively. Load factor contracted 90 basis points to 74.9% in May 2016. Furthermore, in the month, the carrier witnessed a 21.3% decline in the volume of departures.

3. According to data released by the Bureau of Transportation Statistics, there was a 3.6% increase in the number of workers employed by U.S. scheduled passenger airlines. This marked the 29th consecutive month of year-over-year increase. The report also stated that the number of FTEs (407,763) for Apr 2016 was the highest since Jul 2008. According to the update, the most number of FTEs in the month were employed by the American Airlines Group ( AAL ), among the network airlines. Southwest Airlines ( LUV ) took the honors in the low-cost carrier category.

4. Good news flowed in for Spirit Airlines as analysts at Credit Suisse upgraded the rating on the stock to "Outperform." The firm also raised its target price on the carrier as analysts are bullish on its 2017 prospects despite increasing oil prices . Not only 2017, analysts expect performance of the low-cost carrier with respect to unit revenue to be better than its peers in the second half of 2016 as well.

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UNITED CONT HLD (UAL): Free Stock Analysis Report

AMER AIRLINES (AAL): Free Stock Analysis Report

SPIRIT AIRLINES (SAVE): Free Stock Analysis Report

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

SOUTHWEST AIR (LUV): 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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