Airline inventory roundup: AAL orders high-speed jets, DAL gives update on expansion – 19 August 2022
Last week, American airlines (AAL – Free Report) was the lead writer on the news, thanks to its announcement of the upfront payment to Boom Supersonic for the purchase of 20 high-speed jets. Delta Airlines (DAL – Free Report) also made headlines following management’s decision to increase the frequency of flights to Seoul, driven by a strong rebound in international travel.
Emphasizing its operational efficiency, Spirit Airlines (TO REGISTER – Free Report) recorded its highest ever completion factor (% of scheduled flights that are completed) for the month of July. According to data available from Cirium, a leading aeronautical data analysis company, Brazilian carrier Azul (AZUL – Free Report) became the most punctual airline worldwide in July.
Summary of the latest Top Stories
1. To modernize its fleet, American Airlines has signed an agreement with Boom Supersonic to purchase up to 20 Overture aircraft from the latter. AAL has already made a non-refundable deposit for the fleet. The deal also includes the option to purchase another 40 such high-speed jets for the airline which are expected to carry passengers at twice the speed of the fastest commercial jets currently available. Financial details of the deal remain undisclosed.
Boom plans to start rolling out the new super-fast jets in 2025. These planes are expected to start carrying passengers by 2029. They are expected to carry 65 to 80 passengers on each trip. AAL currently carries a Zacks Rank #3 (Hold).
You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2. The operational performance of Spirit Airlines during the period from June 5 to August 5, during which the airline operated more than 44,000 domestic and international flights, was excellent. The outstanding performance during the busy summer season is a huge advantage for SAVE. The very impressive ride may help it attract additional traffic as it is likely to have been well received by passengers. Excluding July’s record performance in completion factor, SAVE’s completion factor over the period was 99.2% (which ranked 3rd in the American airline industry). In the same time frame, there were 25 days where the completion factor was 100%. During the two-month period, 77.5% of flights arrived within 14 minutes of the scheduled time.
SAVE also made headlines when it announced a weaker than expected loss per share for the second quarter of 2022. The story was reported in detail in the previous week’s article.
3. To expand its network in response to strong air travel demand, Delta management decided to increase the frequency of its nonstop service between Seattle-Tacoma International Airport and Seoul International Airport. -Incheon. To that end, Delta aims to introduce flights to Seoul, which will operate three times a week from December 13. The new service will complement Delta’s existing daily operations and partner Korean Air’s five-times-a-week service. The addition implies that 15 weekly flights will be operated under Delta’s Seoul service.
4. Azul said in its press release that, according to Cirium’s “Airline Punctuality Report”, the Brazilian carrier was the most punctual airline in the world (in terms of main service), in July , with an punctuality of 89.02%. . The data accounted for 99.4% of AZUL’s 25,003 flights during the month. Expressing his delight at the development, carrier president John Rodgerson said, “Once again, I am extremely proud of my more than 13,000 colleagues for delivering a cutting-edge experience for our customers. It’s the 2n/a times in the last 5 months that we’ve been number 1 in the world and we’ve been in the top 5 every month since March.”
The following table shows the price development of the major airline players over the past week and over the past six months.
Image source: Zacks Investment Research
The chart above shows that almost all airline stocks traded in the red over the five trading days. The NYSE ARCA Airline Index fell 1.4% to $64.46. Over the past six months, the NYSE ARCA Airline Index has fallen 25%
What’s next in airspace?
Stay tuned for the usual space updates.