Airline Stock Roundup: RYAAY's Q4 Loss, UAL's Expansion Update & More

In the past week, Ryanair Holdings (NASDAQ:RYAAY) RYAAY reported a loss for the fourth quarter of fiscal 2021 (which ended Mar 31, 2021) due to the coronavirus-induced air-travel demand softness. Notably, total revenues at this European low-cost carrier plunged 89.2% year over year due to the tepid air traffic.

Meanwhile, Latin-American carrier Gol Linhas GOL stated that its sales in April improved 75% from the March level as air-travel demand rebounds on increased vaccination programs. The scenario in the United States is rosier as domestic air-travel demand (particularly for leisure) is northbound. Notably, Allegiant Travel Company (NASDAQ:ALGT) ALGT also aims to hire 184 pilots in the coming months to meet this demand swell.

Anticipating the demand uptick to continue in the summer season, United Airlines UAL intends to boost its domestic schedule for July by adding daily flights in excess of 400. On the international front, United Airlines plans to add as well as resume some services to European destinations, courtesy of an uptick in demand. Delta Air Lines (NYSE:DAL) DAL had also provided an expansion update on the international front as reported in the previous week’s writeup.

Recap of the Past Week’s Most Important Stories

1. Ryanair, currently carrying a Zacks Rank #5 (Strong Sell), posted a wider-than-expected loss per share for the fourth quarter of fiscal 2021 due to weak revenues. In fact, its operations were hurt by coronavirus-induced disruptions throughout fiscal 2021 as exemplified by the 81% traffic reduction. In fact, the airline regarded fiscal 2021 as the most “challenging” in its 35-year history. On a further positive note, Ryanair hopes to return to pre-coronavirus levels of growth in summer 2022.

You can see the complete list of today’s Zacks #1 Rank stocks (Strong Buy) here.

2. Owing to its decision to boost the domestic network in July, United Airlines expects to operate 80% of its pre-pandemic U.S. schedule in the month as summer travel bookings rise. On the domestic front, the carrier will add services to Bozeman, MT; Orange County, CA; Raleigh, N.C. and Yellowstone/Cody, WY. From Chicago, IL, the airline will operate more than 480 daily departures while from Washington D.C. it will operate above 220 daily departures. Notably, the Chicago-based carrier will expand its July domestic network by 17% from its June level.

3. Alaska Air (NYSE:ALK) Group’s ALK subsidiary Alaska Airlines aims to expand its fleet again in response to better demand witnessed in the United States. Alaska Airlines expects domestic travel to return to pre-COVID levels by the summer of 2022. To meet this anticipated demand uptick, the airline aims to add 17 Embraer 175 jets to the regional fleet in 2022 and 2023, of which nine will be operated by Horizon Air and eight by SkyWest (NASDAQ:SKYW).

4. Mirroring improved air-travel demand, Gol Linhas operated approximately 200 daily flights on peak days and covered 67 destinations in April. The carrier’s consolidated gross revenues totaled approximately R$250 million in the month. Passenger revenue per available seat kilometers or PRASK rose 38% month over month as well as 5% year over year on higher ticket pricing owing to dynamic yield management and recovery in travel demand compared with April 2020.

5. Despite the recent improvement, air-travel demand in the United States remains below the pre-coronavirus levels. This is reflected in Allegiant’s passenger count that showed 20.4% less flyers under its scheduled service in April 2021 than April 2019. Scheduled traffic (measured in revenue passenger miles) also declined 21.6% in the month from the April 2019 tally. Capacity (measured in available seat miles) for scheduled service too slid 0.6% from the April 2019 reading.

Performance

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

The table above shows that all airline stocks barring Copa Holdings (NYSE:CPA) CPA have traded in the green in the past week, leading the NYSE ARCA Airline Index to gain 2.7% to $106.45. Over the course of the past six months, the NYSE ARCA Airline Index has appreciated 41%.

What's Next in the Airline Space?

Stay tuned for usual news updates in the space.

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