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Airline Stock Roundup: RYAAY's Dim FY22 Traffic View, Flight Cancellations & More

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·4-min read
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Omicron-induced staff crunch and woeful weather prompted U.S. carriers like Delta Air Lines DAL and United Airlines UAL to cancel multiple flights, thereby hampering travel plans of many passengers over the Christmas holiday weekend.

Again due to travel restrictions triggered by the omicron variant, Ryanair Holdings RYAAY trimmed its traffic forecast for fiscal 2022. JetBlue Airways JBLU decided to continue operating on the New York JFK-London Heathrow route through October next year.

JetBlue also recently grabbed headlines following its expansion update on its Northeast Alliance with American Airlines AAL. This story was covered in detail in the previous week’s roundup.

Recap of the Latest Top Stories

1. Ryanair now anticipates fiscal 2022 traffic count to be little less than 100 million passengers compared with the previous expectation of just above 100 million. Net loss is expected in the range of €250-€450 million compared with the previously guided range of €100-€200 million. RYAAY lowered its December traffic forecast to 9-9.5 million passengers from 10-11 million expected earlier due to the effects of government travel restrictions, especially France and Germany’s ban on UK travelers and the suspension of the EU flights to/from Morocco. The airline slashed its planned January schedule by 33%. It now expects January traffic to be 6-7 million compared with 10 million anticipated previously. RYAAY currently carries a Zacks Rank #4 (Sell).

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

2. JetBlue extended its daily transatlantic flights between New York JFK) and London Heathrow Airport through October 2022 after securing the required take-off and landing slots. The flights launched on Aug 12 2021 are now scheduled to run daily until Oct 31, 2022. Before the unveiling of this transatlantic route, travelers had to choose from limited flight options with costly tickets between JFK and LHR, especially in the premium travel segment. Since launching the route, JetBlue has reduced premium fares by up to 50%. JetBlue’s tickets are now up for sale through Oct 31, 2022.

3. Holiday travel was disrupted as the U.S. airlines were forced to cancel multiple flights due to a combination of omicron-led manpower crunch and unfavorable weather conditions. For example, United Airlines cancelled more than 100 Christmas Eve flights. UAL’s senior vice president of flight operations, Bryan Quigley, reportedly wrote in a message to the airline’s pilots, “Our current pilot Covid-19 case count is on the rise.” Quigley added, “Pilots who have developed symptoms are also in quarantine and we have a high number of pilots on the sick list.”

Delta also suffered the same issue. Having already called off several flights since the Christmas Eve, DAL canceled some more on Monday Dec 27.

4 In a major boost to airline stocks, the Centers for Disease Control and Prevention reduced to five days from 10 the recommended isolation period for the Americans infected with COVID-19. In case the patient is asymptomatic, he/she should wear a mask (when around others) for five more days after leaving the isolation zone. Per CDC’s press release, the move to shorten the isolation phase was prompted by the fact that the transmission of SARS-CoV-2 (virus causing COVID-19) mostly occurs 1-2 days prior to the onset of symptoms and 2-3 days following the same. CDC’s decision is also a boon for the airlines as it is likely to go a long way in tackling the staffing scarcity, which imposed mass flight cancellations over the Christmas weekend.

Performance

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

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

The table above shows that most airline stocks have traded in the green over the past week. However, the gains were muted in nature causing the NYSE ARCA Airline Index to increase marginally to $83.63. Over the past six months, the NYSE ARCA Airline Index has depreciated 15.6%.

What's Next in the Airline Space?

Further updates on the impact of staff shortage and foul weather on aviation operations are expected in the coming days.


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Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report

Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report

United Airlines Holdings Inc (UAL) : 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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Zacks Investment Research

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