Airline Stock Roundup: DAL To Rejoin A4A, AAL To Debut In Africa, UAL In Focus

In the past week, Delta Air Lines (NYSE:DAL) announced that it will be part of Airlines for America (A4A), the trade organization for leading U.S. passenger and cargo airlines, again next year. Notably, this Atlanta, GA- based had walked out of the organization in 2015 due to policy disagreements.

United Airlines (NASDAQ:UAL) also made headlines, courtesy of its decision to extend the grounding period of Boeing (NYSE:BA) 737 Max jets in its fleet. Currently, this Chicago-based carrier has 14 such jets in its fleet. American Airlines (NASDAQ:AAL) also grabbed the limelight by virtue of its decision to start operating flights to Morocco next year. The flights, once operational, will mark the carrier’s entry into the African continent. An expansion-related update was also available from Spirit Airlines (NYSE:SAVE) in the week.

(Read the last Airline Stock Roundup here)

Recap of the Past Week’s Most Important Stories

1. A4A, which includes the likes Southwest Airlines (NYSE:LUV) , United Airlines and American Airlines, welcomed the decision of Delta to rejoin the group. In fact, Nicholas E. Calio, A4A’s President and CEO, stated that “We are a stronger association with Delta as a member”. (Read more: Delta Buries the Hatchet With A4A, Set to Rejoin Next Year).

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

2. United Airlines joined fellow U.S. carriers — Southwest Airlines and American Airlines — in extending the period of Boeing 737 MAX jets. United Airlines announced that 737 MAX operations will remain suspended through Jun 4, 2020, as opposed to the earlier-estimated date of Mar 4. With the Boeing 737 MAX jets in its fleet being non-operational, the carrier expects to cancel approximately 56 flights a day next January and February. As air-travel demand usually picks up in the subsequent months, flight cancellations at United Airlines are expected to rise to 80 in March, April, and 108 in May and early June.

United Airlines also announced its decision to begin operating new daily non-stop flights from its hub at San Francisco International Airport to Dublin from Jun 5, 2020.

3. In a bid to meet the surge in air-travel demand during the holiday season, Spirit Airlines introduced daily non-stop flights connecting Puerto Rico, San Juan's Luis Muñoz Marín International airport Boston Logan International airport and Newark Liberty International airport. Moreover, the carrier will introduce a second non-stop flight, connecting Newark and the Puerto Rican capital from Feb 1, 2020. As part of the expansion plan, Sprit Airlines also intends to start operating flights connecting San Juan and three other U.S. destinations next year. (Read more: Spirit Buoys Connectivity With Additional Puerto Rico Flights).

Moreover, Spirit Airlines inked a deal with Airbus to buy 100 new Airbus A320neo Family jets, in a bid to modernize its fleet. Furthermore, the airline has the option to purchase up to 50 more planes under the deal, which includes Airbus A319, A320, and A321 models. Spirit intends to take delivery of these fuel-efficient jets through 2027.

4. According to media reports, American Airlines has inked a codeshare agreement with Morocco’s Royal Air Maroc, in a bid to facilitate air travel between the United States and Africa. The deal will expand to additional African cities early next year. It precedes American Airlines’ decision to commence operating flights connecting Casablanca, Morocco and Philadelphia from Jun 4, 2020. American Airlines will operate three flights a week on the route using Boeing 757 jets. As part of its efforts to broaden its network, American Airlines will be operating flights (thrice a week) connecting Dallas-Fort Worth and Tel Aviv, Israel from Sep 9, 2020.

Performance

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

The table above shows that majority of the airline stocks traded in the green in the past week, though the gains were muted in nature. Consequently, the NYSE ARCA Airline Index rallied merely 0.4% to $112.55 during this period. American Airlines shares gained the most in the period. Over the course of six months, the index has appreciated 1.4%, with shares of Hawaiian Holdings (NASDAQ:HA) gaining the most.

What's Next in the Airline Space?

Stay tuned for usual updates in this space.

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