Airline Stock Roundup: Delta's Q1 Earnings Beat, Spirit Gives Fleet Updates

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On April 10, Delta Air Lines (DAL - Free Report) initiated the first-quarter 2024 earnings season for the airline space. This Atlanta-based carrier reported better-than-expected earnings per share and revenues driven by the buoyant air-travel demand scenario. The airline also gave a bullish view for the June quarter.

Meanwhile, Spirit Airlines (SAVE - Free Report) inked a deal with Airbus to defer all jets on order that were scheduled to be delivered between the second quarter of 2025 and 2026-end to 2030-2031. Additionally, Copa Holdings (CPAFree Report) reported double-digit year-over-year growth in air traffic and capacity in March.

Recap of the Recent Most Important Stories

First, Delta reported first-quarter 2024 earnings (excluding 39 cents from non-recurring items) of 45 cents per share, which comfortably beat the Zacks Consensus Estimate of 36 cents. Earnings increased 80% on a year-over-year basis. Revenues of $13.75 billion surpassed the Zacks Consensus Estimate of $12.84 billion and increased 7.75% on a year-over-year basis, driven by strong air travel demand.

Adjusted operating revenues (excluding third-party refinery sales) came in at $12.56 billion, up 6% year-over-year. Delta expects adjusted earnings of $2.20-$2.50 per for second-quarter 2024.

Next, Spirit's agreement with Airbus to defer aircraft deliveries will improve its liquidity position by approximately $340 million over the next two years. These deferrals exclude the direct-lease aircraft scheduled for delivery in that period, one each in the second and third quarters of 2025, respectively.

However, the delivery schedule of the jets on order with Airbus, scheduled to be delivered in 2027-2029, has been unchanged. Spirit Airlines also intends to furlough 260 pilots, effective Sept. 1, as a result of the planes in its fleet that are grounded following the Pratt & Whitney-produced engine availability issues.

Spirit Airlines was also in the news recently due to the deal with International Aero Engines on monthly credit. That story was covered in detail in the previous week’s write-up. Currently, Spirit Airlines carries a Zacks Rank #3 (Hold).

Meanwhile, driven by high passenger volumes, revenue passenger miles (a measure of traffic) increased 11.5% on a year-over-year basis at Copa Holdings in March. To match the demand swell, Copa Holdings is increasing its capacity.

In February, available seat miles increased 12.5% year-over-year. With traffic growth being outpaced by capacity expansion, the load factor (the percentage of seats filled by passengers) declined to 86.5% from 87.2% in March 2023. 

Additionally, Alaska Air Group (ALK - Free Report) has been paid $160 million by plane manufacturer Boeing (BA - Free Report) in first-quarter 2024. This is an initial compensation to address the financial damages incurred as a result of the Flight 1282 incident and the subsequent 737-9 MAX groundings.

Alaska Air Group expects a loss of $1.05-$1.15 per share for first-quarter 2024, with 95 cents of loss related to the accident and subsequent grounding. The previous expectation was for an adjusted first-quarter loss of 45-55 cents per share. The new loss forecast is due to a change in its plans to treat the accounting of the compensation.


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

Zacks Investment Research

Image Source: Zacks Investment Research

The table above shows that most airline stocks traded in the red over the past week. The NYSE ARCA Airline Index has declined 1% to $63.76. Over the past six months, the NYSE ARCA Airline Index has gained 28.4%.

What’s Next in the Airline Space?

Alaska Air is scheduled to release first-quarter 2024 results on April 18.

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Disclosure: contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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