Published on 13 Mar 2024 on Zacks via Yahoo Finance

Airline Stock Roundup: LUV Expects Loss in Q1, DAL Sees Boeing Delivery Delay

Production delays at Boeing BA are hurting the fleet-related plans of airlines in the United States. This was echoed by airline heavyweights at the JPMorgan investor event. As a result of the crisis engulfing the plane manufacturer, airlines are being forced to cut their flight schedules. To this end, Southwest Airlines’ LUV management stated that it was advised by Boeing to expect 46 737-8 jets in 2024 compared with the earlier stated 79 737 MAX jets, which included 58 MAX 8 planes.Delta Air Lines DAL does not expect the Boeing 737 Max 10 planes to be delivered before 2027. Previously, DAL anticipated the planes to get delivered from 2025 onward. American Airlines AAL increased its fuel cost per gallon projection for first-quarter 2024. Copa Holdings’ CPA February traffic report was impressive, driven by an upbeat air-travel demand.Read the last Airline Roundup here.

Recap of the Recent & Most Important Stories

1. Southwest Airlines’ management expects first-quarter 2024 available seat miles to improve 11% from the year-ago reported figure (the previous anticipation was for a 10% increase). Economic fuel costs per gallon are likely to be $2.95-$3 (earlier expectation was $2.7-$2.8). LUV expects cost per available seat miles, excluding fuel, oil and profit-sharing expenses, and special items, to increase 6% in the first quarter from the comparable period in 2023. Interest expenses are anticipated to be $65 million in the first quarter. LUV expects first-quarter 2024 revenue per available seat mile or RASM to be either flat or increase up to 2%. The earlier expectation was for a 2.5-4.5% increase. The reduced expectation is primarily due to higher-than-expected completion factors in February and March. Lower-than-expected close-in leisure passenger volume is also likely to hurt RASM. The company expects to incur a net loss in first-quarter 2024.