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   Non-TechAirline Discussion Board

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From: Sam11/28/2018 4:20:21 PM
   of 1110
Airline Stocks That Look Ready to Rise --

Dow Jones Newswires November 28, 2018 02:52:00 PM ET

It's another good day for airlines, as a number of analysts had good things to say about stocks across the sector.

Where we were: Airlines have struggled this year, but Spirit Airlines' (SAVE) upbeat fourth-quarter forecast sent shares soaring Tuesday.

Where we're headed: Higher for most big airlines, according to several firms.

Airlines were grounded for much of 2018, as investors fretted about higher capacity, rising fuel costs, and grappled with whether or not the industry had really learned lessons from missteps of the past. However, with capacity forecasts coming in lower for 2019 and the price of oil falling as airlines demonstrate the ability to recapture fuel increases, more and more investors are getting more optimistic about the answer to the third and final concern.

Spirit was a big winner yesterday, but JPMorgan's Jamie Baker writes that he was "gobsmacked" by the forecast and the elasticity of Spirit's passengers, leading him to upgrade the stock to Overweight from Neutral, and raise his price target to $82 from $59.

Spirit jumped 15% on the news, so Baker isn't just being self-effacing when he admits that the strong guidance is already old news, but he does believe that the stock's rally can keep going. That's because even in a worst-case scenario, in which Spirit's improved outlook reflects nothing other than lower fuel prices, his price target still would have climbed substantially, to $77. Instead, he believes that the fourth quarter is more than just a one-off, rather representing "a paradigm shift in Spirit's revenue trajectory." That would mean that the truth lies somewhere between a second and third scenario -- that Spirit's fourth quarter is just an anomalously strong period, and that the strength can continue through 2019, respectively. His target in the second scenario is $82, but if we get No. 3, he could see the stock rising to $104. Thus, even if oil prices rally again, he still sees plenty of upside to the stock.

Elsewhere, Goldman Sachs' Catherine O'Brien added Alaska Air Group (ALK) to the firm's Conviction Buy List, with an $85 price target. Her optimism stems from the company's investor day, where she was heartened by both Alaska's 2019 cost outlook and revenue initiatives.

She believes that the company will continue to outperform its cost targets throughout next year, and she thinks Alaska will start to see the benefits of its Virgin America acquisition along with a new fare structure. In addition, O'Brien writes that she is "impressed to see the market share Alaska and its partners enjoy from both Seattle and the West Coast versus some of its competitors."

Also Wednesday, Susquehanna's Christopher Stathoulopoulos initiated coverage on all of the Big Four U.S. carriers - - American Airlines Group (AAL), Delta Air Lines (DAL), Southwest Airlines (LUV), and United Continental Holdings (UAL) -- with Positive ratings of the first two and Neutral ratings on the latter two.

Stathoulopoulos's initiation gets more to the heart of that third and final investor concern about if the industry has learned from past missteps. He writes that airlines seem to share similarities with railroads in the mid-2000s: "[Y] ears of financial hardship followed by consolidation led to pricing power, which led to earnings growth, and improved return on invested capital." Carriers "appear to be in the midst of their own renaissance (consistently profitable since 2010), [but] the similarities stop there." Airlines have to deal with a lot more competition, the threat of low-cost and ultra-low-cost carriers, high fixed costs, and external events (from weather to terrorism) beyond their control. "So what's really changed? Is the airline industry's improved performance this cycle driven by structural shifts or cyclical tailwinds?"

His answer is a bit of both. Consolidation and big data have added stability, and while it's still a cyclical business, it's less cyclical in the past, thanks to better inventory control, loyalty programs and more fuel-cost recapture. Yet the scars from the past ("emotional baggage") have kept the stocks from rerating higher despite this better environment. "Absent waiting for the airlines to pass 'the recession test' (i.e., maintaining profitability through a downturn), we believe a return to pre-tax margin expansion could support higher valuations nearer term, helping the airlines to 'earn their wings' with investors," writes Stathoulopoulos.

As for the specific stocks, Delta is "best-in-class" among the legacy airlines, while American's self-help program looks on track. He's on the sidelines with United due to the shares' rally (up more than 40% in 2018), and Southwest due to margin pressure.

Make the Connection

Cowen & Co. is upbeat about Alaska's prospects as well.

Barron's sees better times ahead for American.

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From: Sam12/4/2018 9:01:59 AM
   of 1110
Delta Reports Operating Performance for November 2018
PR NEWSWIRE 9:00 AM ET 12/4/2018

Symbol Last Price Change
60.12 0 (0%)
QUOTES AS OF 04:00:42 PM ET 12/03/2018

ATLANTA , Dec. 4, 2018 /PRNewswire/ -- Delta Air Lines(DAL) today reported operating performance for November 2018. The company carried 15.5 million customers across its broad global network, a record for the month of November.

For the December quarter, Delta expects to generate earnings per share at the high-end of the company's $1.10 - $1.30 guidance range. The company expects approximately 7.5% top-line growth (excluding third party refinery sales) on an approximately 3.5% year over year increase in unit revenue. When combined with the benefits from the recent moderation in fuel prices and solid non-fuel cost control, the company is on track to expand pre-tax margins in the December quarter.

Monthly highlights include:

  • Ranking as the No. 1 U.S. airline by the corporate travel community in the Business Travel News Airline Survey for a historic eighth consecutive year, sweeping all 10 categories
  • Increasing A330-900neo order book to 35 from 25 and deferring 10 A350-900 orders, addressing Delta's near-to-medium-term widebody needs and reinforcing our commitment to fuel and economic efficiency while remaining capital disciplined
  • Carrying over 2.4 million customers on nearly 23,000 flights with a completion factor of 99.77 percent during the Thanksgiving holiday period; Sunday marked the busiest day of the period, flying 658,000 people, an all-time record for the month of November
  • Unveiling the first biometric terminal in United States at the Maynard H. Jackson International Terminal (Terminal F) in Atlanta, allowing customers to use facial recognition technology from curb to gate and empowering employees to have more time for meaningful interactions with customers
  • The company's operating performance is detailed in the table below.

    Forward Looking Statements

    Statements in this investor update that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the cost of aircraft fuel; the impact of fuel hedging activity including rebalancing our hedge portfolio, recording mark-to-market adjustments or posting collateral in connection with our fuel hedge contracts; the availability of aircraft fuel; the performance of our significant investments in airlines in other parts of the world; the possible effects of accidents involving our aircraft; breaches or security lapses in our information technology systems; disruptions in our information technology infrastructure; our dependence on technology in our operations; the restrictions that financial covenants in our financing agreements could have on our financial and business operations; labor issues; the effects of weather, natural disasters and seasonality on our business; the effects of an extended disruption in services provided by third party regional carriers; failure or inability of insurance to cover a significant liability at Monroe's Trainer refinery; the impact of environmental regulation on the Trainer refinery, including costs related to renewable fuel standard regulations; our ability to retain senior management and key employees; damage to our reputation and brand if we are exposed to significant adverse publicity through social media; the effects of terrorist attacks or geopolitical conflict; competitive conditions in the airline industry; interruptions or disruptions in service at major airports at which we operate; the effects of extensive government regulation on our business; the sensitivity of the airline industry to prolonged periods of stagnant or weak economic conditions; uncertainty in economic conditions and regulatory environment in the United Kingdom related to the exit of the United Kingdom from the European Union; and the effects of the rapid spread of contagious illnesses.

    Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and our 10-Q for the quarterly period ended March 31, 2018. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of December 4, 2018, and which we have no current intention to update.

    Non-GAAP Reconciliations

    Delta sometimes uses information ("non-GAAP financial measures") that is derived from the Consolidated Financial Statements, but that is not presented in accordance with accounting principles generally accepted in the U.S. ("GAAP"). Under the U.S. Securities and Exchange Commission rules, non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results.

    We do not reconcile forward looking non-GAAP financial measures because mark-to-market ("MTM") adjustments and settlements will not be known until the end of the period and could be significant.

    Monthly Traffic Results

    Year to Date Traffic Results

    Nov 2018

    Nov 2017


    Nov 2018

    Nov 2017


    RPMs (000):















    Latin America





















    Total System







    ASMs (000):















    Latin America





















    Total System







    Load Factor:




    0.6 Pts



    (0.3) Pts




    (0.1) Pts



    0.2 Pts

    Latin America



    (1.4) Pts



    (1.1) Pts




    2.2 Pts



    1.1 Pts




    (3.1) Pts



    (0.2) Pts

    Total System



    0.4 Pts



    (0.1) Pts

    Mainline Completion Factor



    (0.13) Pts

    Mainline On-time Performance



    (10.5) Pts

    (preliminary DOT A14)

    Passengers Boarded







    Cargo Ton Miles (000):







    View original content to download multimedia:

    SOURCE Delta Air Lines(DAL)

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    From: Sam12/4/2018 11:54:13 AM
       of 1110
    Sharp drops across transportation sector
    Dec. 4, 2018 11:46 AM ET|By: Clark Schultz, SA News Editor

    Broad selling in the transportation sector is being taken by some market watchers as a leading indication of weakening investor sentiment on stocks as a whole.

    While FedEx ( FDX -5.8%), UPS ( UPS -6.2%) and trucking stocks were hit by biting analyst commentary this morning (Amazon Air impact, intermodal pricing) - railroad and airline stocks are also seeing some selling pressure.

    Notable decliners include American Airlines Group ( AAL -4.8%), Delta Air Lines ( DAL -4.2%), United Continental ( UAL -3.4%), Mesa Air ( MESA -4.1%), Southwest Airlines ( LUV -2.5%), Allegiant Travel ( ALGT -3%), Greenbrier ( GBX -2.8%), FreightCar America ( RAIL -2.6%), Genesee & Wyoming ( GWR -2.4%), Canadian Pacific ( CP -2.5%), Trinity Industries ( TRN -1.8%), Ryder ( R -5.1%), Avis Budget ( CAR -3.5%) and Landstar System ( LSTR -4.5%). In the trucking sector, some names such as Knight-Swift Transportation ( KNX -8.3%), Werner Enterprises ( WERN -4.7%), Old Dominion Freight ( ODFL -4.1%) and Schneider National ( SNDR -6.9%) have extended on their early declines.

    It's not a surprise give the widespread sector weakness that the iShares Transportation Average (BATS: IYT) is down 3.15% on the day.

    Previously: UBS sees pricing headwind for trucking sector (Dec. 4)

    Previously: UPS and FedEx slide on Amazon Air anxiety (Dec. 4)

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    From: Sam12/6/2018 12:18:09 AM
       of 1110

    Wall Street Journal Abstracts December 05, 2018 12:01:00 AM ET

    Delta Air Lines Inc adds to investor concerns about airline industry's ability to manage recent decline in oil prices as it warned key revenue metric would fall short of prior expectations, leading to 5.3% decline in its shares over last ten sessions;

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    From: Sam12/7/2018 2:21:26 PM
       of 1110
    Airline stocks suffer broad selloff as economic growth, oil price concerns prompt sector downgrade
    MARKETWATCH 2:19 PM ET 12/7/2018

    Symbol Last Price Change
    33.805 -3.135 (-8.49%)
    55.91 -2.17 (-3.74%)
    17.86 -0.99 (-5.25%)
    51.63 -1.97 (-3.68%)
    88.34 -4.69 (-5.04%)
    QUOTES AS OF 02:20:08 PM ET 12/07/2018

    Airline stocks were knocked lower Friday, with the sector on track to suffer the biggest one-day loss in nearly 3 years, as the recent drop in oil prices and concerns over a slowing economy acted as a one-two punch for the group. The NYSE Arca Airline Index slid 5.1% toward a fourth-straight decline. Friday's loss was headed for the biggest one-day loss since Feb. 26, 2016. Crude futures surged 2.4% Friday, as OPEC and its allies reached a deal (http:// to cut production, but has declined 22% over the past three months. Lower oil prices lowers fuel costs for air carriers, but it also leads to undisciplined capacity growth that could hurt unit revenue performance. Analyst Hunter Keay at Wolfe Research downgraded the airline sector, saying that while a recession and lower oil are both "toxic" for air carriers, " we trust airlines to react better to a recession that we trust them NOT to behave poorly with lower oil prices." Among the sector's more active components, shares of American Airlines Group Inc.(AAL) plunged 9.1%, Delta Air Lines Inc.(DAL) dropped 4.3%, JetBlue Airways Corp.(JBLU) tumbled 5.8% Southwest Airlines Co.(LUV) lost 4.1% and United Continental Holdings Inc.(UAL) shed 5.4%. The airline index has lost 6.0% over the past three months, while the Dow Jones Industrial Average has declined 5.8%.

    -Tomi Kilgore; 415-439-6400;

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    From: Sam12/7/2018 3:55:17 PM
       of 1110
    Airlines in broad selloff; Wolfe Research sees cloudy skies ahead for sector
    Dec. 7, 2018 3:29 PM ET|About: American Airlines Group (AAL)|By: Carl Surran, SA News Editor

    Airline stocks are plunging, with the sector on track to suffer its biggest one-day loss since February 2016, slammed by the recent weakness in oil prices and concerns over a slowing economy.

    Wolfe Research downgrades the airline sector to Underweight from Overweight, saying that while a recession and lower oil are both "toxic" for air carriers, "we trust airlines to react better to a recession than we trust them not to behave poorly with lower oil prices."

    While the airlines have made changes to better position themselves in downturns, the industry’s poor track record looms large, Wolfe's Hunter Keay says, adding that while investors can hope that the next recession will allow carriers to prove they’ve learned lessons, the best place to watch is from the sidelines.

    Among individual names, Keay cuts American Airlines ( AAL -9%), Hawaiian Holdings ( HA -9.4%) and Spirit Airlines ( SAVE -8.3%) to Peer Perform from Outperform, and JetBlue ( JBLU -5.6%) and WestJet ( OTC:WJAFF -3%) to Underperform from Peer Perform.

    But Keay reiterates his Outperform rating on Delta Air Lines ( DAL -3.8%) and upgrades Southwest Airlines ( LUV -4.1%) to Outperform from Peer Perform; he likes DAL’s variable cost structure and strong balance sheet and margins, and he thinks LUV's track record means the stock is one of the better airlines to invest in during a downturn.


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    From: Sam12/12/2018 6:09:32 PM
       of 1110
    United Airlines CEO doubles down on growth strategy as stock rides tailwind
    REUTERS 6:06 PM ET 12/12/2018

    Symbol Last Price Change
    34.35 +0.25 (+0.73%)
    56.27 +0.38 (+0.68%)
    89.63 +1.49 (+1.69%)
    50.9 -0.18 (-0.35%)
    QUOTES AS OF 04:00:00 PM ET 12/12/2018

    By Tracy Rucinski

    CHICAGO (Reuters) - With many rival airlines scaling back plans to add travel routes and seats in a bid to protect margins, Oscar Munoz is taking United Airlines in a different direction.

    The No. 3 U.S. air carrier is forging ahead with a strategy to boost its flight network by another 4 percent to 6 percent next year after an estimated 5 percent network growth in 2018, Munoz, CEO of United Airlines since 2015, said on Wednesday.

    The growth plan has allowed United to claw back market share in a competitive U.S. airline sector and boost its profitability. Traditionally capacity growth in the airline business has come at a cost to yields because it can drive down fares.

    So far, United has bucked the industry trend, increasing unit revenues - a closely watched metric that compares airlines' sales to available seat miles - at a faster pace than rivals American Airlines(AAL) and Delta Air Lines(DAL) .

    When the airline unveiled an aggressive plan to add capacity in the middle of a price war with low cost carriers in January, the stock of parent company United Continental Holdings(UAL) fell 7 percent.

    But United investors have more than reversed course, sending its shares up about 30 percent so far this year against a roughly 2 percent drop on the S&P 500.

    United has overhauled its hubs in Chicago, Houston, Denver, Newark, New Jersey, Washington, D.C., Los Angeles and San Francisco with 220 new flights and better coast-to-coast connecting options.

    (For graphic on U.S. domestic market share, see:

    Munoz offered new details to his growth strategy on Wednesday, saying United will add flights to New Delhi, Toronto and Melbourne from San Francisco to tap higher-paying international routes.

    "The strategy is working," Munoz told journalists.

    The expansion comes after United revamped its home base - Chicago O'Hare Airport - in a way that allows passengers to make easier connections when traveling to the two U.S. coasts and cities in between.

    A similar overhaul at Denver, its fastest growing and most profitable hub despite heavy competition from low-cost carriers Southwest Airlines(LUV) and Frontier Airlines, will be launched in February. San Francisco is now set for its largest international route expansion, subject to government approval.

    Much of United's domestic expansion so far has targeted a portion of the market share lost when the airline cut 1,200 flights following its post-bankruptcy merger with Continental Airlines in 2010.

    "It's not predicated on anything other than where does it make sense for us to fly. Where are the customers? Do we have the right aircraft, and in essence, can you make money?" Munoz told Reuters in an interview. "We're not chasing that 1,200."

    The growth plans and investor optimism have allowed Munoz to put the passenger and animal scandals of 2017 in the rear view mirror, and focus on improving relations with its own passengers and labor force.

    To turn around its image, Munoz has provided "compassion" training to employees and empowered flight attendants and gate agents to resolve passenger complaints on the spot with travel credits or vouchers.

    "United's No. 1 challenge is to avoid any more notable public relations disasters. Customers, investors and Twitter users will not forgive as easily the next time," Jim Corridore, equity analyst at CFRA in New York.

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    From: Sam1/3/2019 9:39:53 AM
       of 1110
    Delta's stock drops after providing Q4 guidance, December operating metrics
    MARKETWATCH 9:38 AM ET 1/3/2019

    Symbol Last Price Change
    46.87 -3.22 (-6.43%)
    QUOTES AS OF 09:38:39 AM ET 01/03/2019

    Shares of Delta Air Lines Inc.(DAL) dropped 5.5% in morning trade, after the air carrier reported December metrics and provided a fourth-quarter profit outlook. The company said it expects adjusted earnings per share of $1.25 to $1.30, compared with a previous EPS guidance range of $1.10 to $1.30 and the FactSet consensus of $1.28. Delta also revised its guidance for pre-tax margin to 10% to 11% from 9% to 11% and its outlook for costs per available seat mile to down about 0.5% from flat to down about 1%. Fuel price per gallon is expected to be $2.38 to $2.43, down from previous guidance of $2.47 to $2.52. For December, load factor was flat at 84.2%, as traffic rose 5.4% to 17.63 billion revenue passenger miles and capacity increased 5.4% to 20.94 billion available seat miles. The stock has shed 12.8% over the past three months, while the Dow Jones Transportation Average has tumbled 20,0% and the Dow Jones Industrial Average has lost 14.3%.

    -Tomi Kilgore; 415-439-6400;

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    To: Sam who wrote (807)1/3/2019 9:59:28 AM
    From: Paul Senior
       of 1110
    Guidance doesn't look like it should lead to such a drop in DAL's price. I'll up my DAL position a little, and also add a little to my AAL position.

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    To: Paul Senior who wrote (808)1/3/2019 1:48:07 PM
    From: Sam
       of 1110
    I agree with you, Paul. But man, Mr. Market sure doesn't! He is in a selling mood today! And airlines are not an exception!

    Delta guidance crushes airline sector
    Jan. 3, 2019 10:34 AM ET|By: Clark Schultz, SA News Editor

    Airline stocks are reeling after a preannouncement by Delta Air Lines ( DAL -9.2%) of Q4 results included a +3% unit revenue reading vs. +3% to +5% prior guidance. Investors are locked in on the PRASM tally, despite Q4 total revenue that came in ahead of consensus estimates and an EPS range ($1.25-$1.30) that was close the the $1.28 consensus mark. Delta also guided for a pre-tax margin rate of 10% to 11% from 9% to 11% prior.

    Notable decliners off the Delta update include American Airlines Group ( AAL -9.7%), Mesa Air ( MESA -8.7%), Spirit Airlines ( SAVE -8.4%), United Continental ( UAL -6.3%), Alaska Air ( ALK -6.5%), SkyWest ( SKYW -4.7%), JetBlue ( JBLU -3.9%), Southwest Airlines ( LUV -4.9%) and Allegiant Travel ( ALGT -4.5%).

    Related ETF: JETS.

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