In the past week, American Airlines AAL, Southwest Airlines LUV and JetBlue Airways JBLU provided improved projections for the fourth quarter of 2024. Buoyant air travel demand and improved pricing led to healthy guidance. Lower capacity has also been boosting profitability.

American Airlines was also in the news due to its credit card deal with Citigroup C. European carrier Ryanair Holdings RYAAY reported strong traffic numbers for November, reflecting the buoyant air travel demand scenario.

Read the Last Airline Roundup here.

Recap of the Recent Most Important Stories

1 American Airlines lifted its fourth-quarter 2024 adjusted earnings per share guidance. The projection was lifted owing to favorable pricing and revenue environment. It expects fourth-quarter total revenues per available seat miles to be flat to up 1% from the same period in 2023 (earlier guidance was of a decline in the 1-3% band).  The company presently expects fourth-quarter adjusted earnings per share to be between approximately 55 cents and 75 cents (earlier guidance was in the 25-50 cents range). Management now expects non-fuel unit costs (adjusted) in the fourth quarter of 2024 to increase in the 5-6% band year over year (earlier projection was of a rise in the 4-6% band).

American Airlines and Citigroup inked a 10-year agreement that extends their partnership. The deal makes Citi the sole issuer of the AAdvantage (AAL’s frequent flyer program) co-branded card in the United States starting in 2026.

AAL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

2. JetBlue now anticipates fourth-quarter revenues to decline in the range of 2-5% on a year-over-year basis. This marks an improvement from the previous guidance of a 3%-7% decline. For 2024, total revenues are forecasted to decline in the range of 3.5-4.5% (prior view: down 4-5%).

The upside in the revenue projection was owing to better-than-expected bookings for November and December after the U.S. presidential election. Additionally, improved close-in demand and solid operational performance over Thanksgiving week led to better revenues during the November holiday peak. JBLU witnessed December bookings surpass prior expectations in peak and off-peak travel periods. For fourth-quarter 2024, capacity (measured in available seat miles) is now anticipated to decline in the 4.5-6.5% band (prior view: down 4-7%).

In a bid to push up fares and profits, JBLU is cutting many routes. The low-cost carrier is cutting service in New York, Miami, and more cities.

3. Southwest Airlines now expects fourth-quarter 2024 total revenue per available seat miles (a measure of unit revenues) to increase in the range of 5.5 -7.0 % on a year-over-year basis (earlier forecast was for an increase in the 3.5-5.5% range). Available seat miles (a measure of capacity) in the December quarter are expected to be down approximately 4% from fourth-quarter 2023 actuals. Upbeat air travel demand and realization of benefits from LUV’s execution of tactical actions led to the improved TRASM view. Economic fuel cost per gallon is expected in the $2.35-$2.45 range.

4. In November, the number of passengers transported on Ryanair flights was 13 million, reflecting an 11% year-over-year increase. The November load factor (percentage of seats filled by passengers) of 92% remained flat on a year-over-year basis, reflecting consistent passenger demand for the airline's services.  RYAAY operated more than 73,750 flights in November 2024.

Performance

The following table shows the price movement of the major airline players over the past week and during the last six months.

Image Source: Zacks Investment Research
 

The NYSE ARCA Airline Index increased 4.3% $67.25, as most stocks in the table above traded in the green. Over the past six months, the NYSE ARCA Airline Index increased by 14.6%.

What’s Next in the Airline Space?

With the earnings season over, we expect updates from many carriers regarding their plans to meet the anticipated demand swell during the winter travel season.

 

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Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report

$Citigroup Inc(C-N)$. (C) : Free Stock Analysis Report

Southwest Airlines Co. (LUV) : Free Stock Analysis Report

JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report

American Airlines Group Inc. (AAL) : Free Stock Analysis Report

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