Image: BigstockIn the past week, United Airlines’ (UAL – Free Report) management announced its decision to launch non-stop flights to Mexico’s soon-to-open Tulum International Airport. The move to expand its network is in response to buoyant air travel demand.Meanwhile, Delta Air Lines (DAL – Free Report) was also in the news as it launched a codeshare partnership with Latvian national carrier, airBaltic. The customer-friendly move is in response to the increasing transatlantic air travel demand. Alaska Air Group (ALK – Free Report) inked an environment-friendly deal with climate-tech company CHOOSE. Allegiant Travel Company (ALGT – Free Report) carried 12.8% more passengers in October 2023 than a year ago across its entire system. You can read the last Airline Roundup here.
Recap of the Past Week’s Most Important Stories
United Airlines will operate 22 weekly direct flights connecting Tulum and U.S. destinations, Newark Liberty, Houston, and Chicago, from March 31, 2024. Management has decided to add more daily, seasonal service to the Mexican destination from Los Angeles from May 23, 2024. The decision to add more flights is in line with UAL’s objective to expand its network by 25% in the broader Latin America and Caribbean region this winter.Currently, United Airlines carries a Zacks Rank #3 (Hold).Following the deal with CHOOSE, ALK’s passengers can purchase sustainable aviation fuel (SAF) credits or support nature-based climate projects. They can choose between SAF credits or certified nature-based projects in places where the airline flies. This move is in-line with the airline’s efforts to go green by reducing its greenhouse gas emissions, without relying on traditional carbon offsets.The agreement with airBaltic allows Delta to add its code on the latter’s flights, thereby boosting connectivity between North America and Latvia. More specifically, Delta can now place its code on 20 routes operated by airBaltic to three of the Latvian carrier’s leading cities — Riga, Tallinn, and Vilnius. The partnership boosts the travel experience of passengers, as they now have access to convenient connections and more flexible booking and ticketing options between North America and Latvia.In October, Allegiant’s scheduled traffic (measured in revenue passenger miles) increased 10.7% from October 2022. Capacity (measured in available seat miles) for scheduled service grew 13.1% from the October 2022 reading.Load factor (the percentage of seats filled by passengers) in October 2023 came in at 83.7%. Fuel price per gallon in October is estimated to have been $3.44. For 2023, the average fuel cost per gallon is expected to be $3.12, higher than the prior view of $2.90.
Price Performance
The following table shows the price movement of the major airline players over the past week and during the past six months.
Image Source: Zacks Investment ResearchThe table above shows that most airline stocks traded in the green over the past week. Consequently, the NYSE ARCA Airline Index has risen 2% to $54.18 in the past week. Over the course of the past six months, the sector tracker has decreased by 12.5%.
What’s Next in the Airline Space?
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