CPA’s Q4 Earnings Outperformance, UAL, JBLU in Focus

In the past week, Copa Holdings CPA reported better-than-expected earnings per share for fourth-quarter 2021 as air-travel demand improves in Latin America. On the non-earnings front, JetBlue Airways JBLU was the primary news maker when it decided to expand its fleet by ordering more Airbus A220s.

United Airlines UAL announced that it intends to expand its Cape Town service from seasonal to year-round in June. With air-travel demand improving in the United States, Allegiant Travel Company ALGT carried 72.1% more passengers in January 2022 than a year ago. Reflecting Brazil’s improved air-travel demand scenario, Azul’s AZUL consolidated traffic for January 2022 rose in double digits year over year.

Recap of the Latest Top Stories

1. Copa Holdings’ fourth-quarter earnings (excluding 71 cents from non-recurring items) of $1.98 per share beat the Zacks Consensus Estimate of $1.15. In the year-ago quarter, CPA had incurred a loss of $2 per share due to coronavirus-led depressed air-travel demand. Quarterly revenues of $575 million also outperformed the Zacks Consensus Estimate of $546.2 million. Due to the impact of the Omicron variant on capacity, load factor, yields and higher fuel prices, CPA, currently carrying a Zacks Rank #3 (Hold), expects its operating margin in the range of 3-6% for first-quarter 2022.

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

2. In a bid to modernize and expand its fleet, JetBlue inked a firm order with Airbus, which will permit the former to exercise its option to add 30 more Airbus A220-300 aircraft to its order book. These jets are not only fuel efficient but will also enhance the air-travel experience of passengers. Currently, JBLU operates eight A220s. Expressing his delight, Robin Hayes, JetBlue’s CEO said “With 30 additional A220s on order, we’re in a position to accelerate our fleet modernization plans to deliver stronger cost performance and support our focus city network strategy.” By ordering 30 more A220s, JBLU will be able to accelerate the retirement of its Embraer E190 fleet.

3. In line with the efforts to expand its Cape Town service, United Airlines plans to launch a year-round operation of three nonstop flights per week between New York/Newark and Cape Town International Airport. The service is expected to begin Jun 5, 2022. United Airlines will operate the route on a 787-9 Dreamliner aircraft, which features 48 lie-flat United Polaris business class seats, 21 United Premium Plus seats and 39 seats in Economy Plus. All seats are equipped with seatback on-demand entertainment to enhance customers’ travel experience.

4. Upbeat air-travel demand is boosting Azul’s traffic. AZUL’s consolidated traffic for January 2022 rose 19.5% year over year. To match the buoyancy in demand, AZUL is expanding its capacity. In January, its capacity increased 12.3% year over year.

With traffic growth outpacing the capacity expansion, load factor (% of seats filled by passengers) increased 5.1 percentage points to 83.8%. Upbeat traffic in the airline’s domestic markets is leading to the rosy scenario on a consolidated basis. In January, domestic traffic and capacity improved 11.6% and 4.8%, respectively. Improvement in international traffic is also aiding the overall scenario.

5. At Allegiant, scheduled traffic for January 2022 surged 77.8% from the January 2021 levels. Capacity for scheduled service expanded 47.6% from the January 2021 reading. With the traffic surge outweighing capacity expansion, the load factor (% of seats filled by passengers) in January expanded 11.7 points to 69.1% from the year-ago period’s levels. Allegiant was also recently in news when it reported impressive fourth-quarter 2021 results owing to the bullish air-travel demand scenario in the United States. Allegiant’s earnings performance was reported in detail in the previous week’s write up.


The following table shows the price movement of the 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 almost all airline stocks have traded in the green over the past week, leading the NYSE ARCA Airline Index to increase 4.9% to $89.73. Over the past six months, the NYSE ARCA Airline Index has been almost flat.

What’s Next in the Airline Space?

With the earnings season over, stay tuned for the regular news updates in this space.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

United Airlines Holdings Inc (UAL) : Free Stock Analysis Report

JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report

Copa Holdings, S.A. (CPA) : Free Stock Analysis Report

Allegiant Travel Company (ALGT) : Free Stock Analysis Report

AZUL (AZUL) : Free Stock Analysis Report

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Zacks Investment Research

Jinggo B Danuarta

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