![]() ![]() ![]() Management at major airlines is changing. More diverse revenue streams, as an increased emphasis on carrying cargo on less-full international routes propped up sales the company's credit-card deal with American Express generated more royalties and contained costs from fuel as the company turned to buying more used planes in its long-running fleet upgrade to increase fuel efficiency, even paying cash for more planes to contain financing costs. On its earnings conference call, executives cited a long list of drivers. Yet the company made a $216 million pretax profit on $9.15 billion of sales, excluding more than $1 billion in temporary government assistance. The delta variant hurt all airlines' traffic in the third quarter, causing Delta Air Lines' load factor to come in at 80%, eight points below its pre-Covid level. ![]() With careful management, airlines can make a profit if load factors remain relatively stable, Scarola said.Ī Delta spokesman said the company won't comment on its plans or guidance, but pointed to the company's third quarter as evidence of how it would manage through any omicron downturn. That would put the behavior of airlines stocks in line with what has been learned about the economy and market since the pandemic began: the economy learns to deal with each successive wave better, and the stock market rebounds quicker from scares. "People have gotten used to the idea that you might not be protected from the virus, but you won't get extremely sick," Scarola said. "Certainly there will be an impact from omicron, but it won't be as severe or last as long as last week's selloff implies," said CFRA Research analyst Colin Scarola, who says he has been telling clients to buy the dip. Meanwhile, capital markets have shown that they will stand behind carriers, lending them money or even buying more stock, and Delta and other carriers have worked to reduce costs, and benefitted from federal aid designed to limit layoffs and keep airlines afloat. Recent data, though not peer-reviewed, has shown that omicron may evade vaccine protection to a greater extent than delta even if it does not cause serious disease, and Pfizer CEO Albert Bourla said on CNBC on Wednesday morning that a booster shot may help. First and most important, passengers are not bailing on air travel this time, though there are international travel restrictions back in place and the eventual impact of omicron remains to be judged by the full weight of scientific evidence still being collected. carrier, airline stocks are up, though still at share price levels below where they were a month ago.Īnalysts point to several factors that make this flurry of Covid fears not like others, caused first by the initial pandemic wave in March of last year and as recently as the delta variant market scare over the summer. After a correction in the NYSE Arca Airline Index, highlighted by a 25% drop for Delta, the most valuable U.S. Now stocks of leading carriers like Delta Air Lines are bouncing back from a brief flurry of near-panic caused by the arrival of a new strain of Covid-19, the omicron variant, which was first detected in South Africa and has now been noted in 50 countries and 19 U.S. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit ![]()
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