Delta Air Lines DAL kicked off the third-quarter 2024 earnings season for the airline industry on Oct. 10, 2024. This Atlanta-based carrier reported lower-than-expected earnings per share but higher-than-anticipated revenues despite being affected by the global technology outage on July 19. Revenues of $15.68 billion increased 1.2% on a year-over-year basis, driven by strong air travel demand. 

The increased demand also aided the results of United Airlines (UAL ). The company reported third-quarter 2024 numbers on Oct. 15, beating the Zacks Consensus Estimate for both top and bottom lines. At UAL, the top line increased 2.5% year over year due to upbeat air travel demand. This was driven by a 1.6% rise in passenger revenues (91.3% of the top line) to $13.56 billion. Almost 45,559 passengers traveled on UAL flights in the third quarter, up 2.7% year over year. Low fuel costs also drove the results.

The encouraging demand scenario and low fuel costs are also expected to have helped Copa Holdings CPA, JetBlue Airways JBLU and Frontier Group Holdings ULCC record better-than-expected earnings performances for the September-end quarter.

Let us delve deeper into the factors that are likely to have boosted the performances of the industry participants who are yet to report third-quarter results.

As air travel demand has been strong, the results of the yet-to-report airline companies are likely to be impressive. While air travel demand has been particularly strong on the leisure front, business demand has made an encouraging comeback. 

With the summer season mostly falling in the third quarter, buoyant air travel demand in the period is likely to have boosted the top lines of the airline companies in the quarter under review.

The decline in fuel expenses has been another tailwind for the industry. Notably, oil prices declined 14% in the July-September period, which bodes well for bottom-line growth of airlines. This is because fuel expenses are significant input expenses for the aviation space.

The most significant driver behind oil’s third-quarter drop was weakening global demand. The economy of China, the world’s largest oil importer, struggled with a slowdown in manufacturing, shrinking for the fifth consecutive month by September.

Here’s How to Pick the Right Stocks

Multiple airline stocks are likely to report earnings results in the coming weeks. It is always a daunting task for investors to pick a winning basket of stocks with the potential to deliver better-than-expected earnings.

While there is no foolproof method of choosing outperformers, our proprietary methodology — the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — helps identify stocks with high chances of delivering a positive surprise in their upcoming earnings announcements. Our research shows that for stocks with this perfect mix of elements, the odds of an earnings beat are as high as 70%.

The Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Our Choices

Copa Holdings has an Earnings ESP of +2.46% and a Zacks Rank #2 at present. The Latin American airline is scheduled to report third-quarter 2024 earnings results on Nov. 20.

CPA surpassed the Zacks Consensus Estimate in the trailing four quarters, the average beat being 16%. Rosy air travel demand and low fuel costs are likely to have aided its performance in the quarter under review.

Copa Holdings, S.A. Price and EPS Surprise

Copa Holdings, S.A. price-eps-surprise | Copa Holdings, S.A. Quote

JetBlue Airways is headquartered in Long Island City, NY. JBLU currently has an Earnings ESP of +0.07% and a Zacks Rank #3. The company will release results on Oct. 29. Upbeat air travel demand and low fuel costs are expected to have aided the third-quarter 2024 performance of this low-cost carrier.

JBLU has an impressive earnings surprise history. JetBlue Airways beat the Zacks Consensus Estimate in three of the last four quarters (missing the mark in the other quarter), the average surprise being 42%.

JetBlue Airways Corporation Price and EPS Surprise

JetBlue Airways Corporation price-eps-surprise | JetBlue Airways Corporation Quote

Frontier Group Holdings is the parent company of Frontier Airlines. ULCC is headquartered in Denver, CO. The company currently has an Earnings ESP of +42.58% and a Zacks Rank #2. Frontier Group Holdings will release results on Oct. 29. Like our other two choices, upbeat air travel demand and low fuel costs are expected to have aided the third-quarter performance of this carrier as well.

ULCC has an excellent earnings surprise history. The company beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 47.44%. 

Frontier Group Holdings, Inc. Price and EPS Surprise

Frontier Group Holdings, Inc. price-eps-surprise | Frontier Group Holdings, Inc. Quote

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

United Airlines Holdings Inc (UAL) : Free Stock Analysis Report

JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report

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

Frontier Group Holdings, Inc. (ULCC) : Free Stock Analysis Report

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