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Airline Stock Roundup: GOL & ALGT Report Q1 Loss Amid Coronavirus Woes

Maharathi Basu
·4-min read

In the past week, Gol Linhas Aereas Inteligentes GOL and Allegiant Travel Company ALGT incurred losses for first-quarter 2021. Results were hurt by the huge plummet in passenger revenues. Also, air-travel remained weak on a year-over-year basis. Further, heavyweights like American Airlines AAL and Southwest Airlines LUV reported first-quarter loss due to dwindling passenger revenues as mentioned in the previous week’s write up.

Additionally, SkyWest SKYW underperformed estimates in the March quarter despite reporting earnings, unlike the above two carriers. SkyWest’s results were affected by a significant cut in the number of scheduled flights as a result of the pandemic.

Recap of the Past Week’s Most Important Stories

1. SkyWest, currently carrying a Zacks Rank #3 (Hold), reported first-quarter 2021 earnings of 71 cents per share, missing the Zacks Consensus Estimate of 89 cents. The bottom line, however, jumped 20.3% year over year owing to significant reduction in operating expenses. Meanwhile, quarterly revenues of $534.6 million fell shy of the Zacks Consensus Estimate of $539 million.

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2. Allegiant incurred first-quarter 2021 loss (excluding $4 from non-recurring items) of $3.58 per share, wider than the Zacks Consensus Estimate of a loss of $3.17. Results were hurt by coronavirus-induced weakness in air-travel demand. However, sentiments were bullish in the year-ago quarter when the company delivered earnings of $2.05 per share.

Moreover, operating revenues of $279.1 million plunged 31.8% year over year and also missed the Zacks Consensus Estimate of $284.3 million. This downside was due to 32.3% fall in passenger revenues. However, owing to improving air-travel demand in the United States, the carrier expects capacity (measured in available seat miles or ASMs) in second-quarter 2021 to expand from the number reported in second-quarter 2019. For the second quarter, ASM (for scheduled service as well as total system) is expected to increase between 2% and 6% from the second-quarter 2019 reported figures.

3. Gol Linhas incurred a loss (excluding $1.63 from non-recurring items) of 89 cents per share in the first quarter of 2021, wider than the Zacks Consensus Estimate of a loss of 74 cents. However, in the year-ago period, the company had reported earnings of 20 cents.

Net operating revenues of $286.8 million missed the Zacks Consensus Estimate of $300.9 million. Moreover, the top line plunged approximately 60% year over year with passenger revenues (accounting for 90.3% of total revenues) plummeting 51.8% year over year due to suppressed air-travel demand amid coronavirus concerns. Cargo and other revenues also declined 26.7%.

4. Reflecting better air-travel demand, Ryanair Holdings’ RYAAY April traffic grew 24% year over year to 1 million guests. On a rolling-annual basis, total traffic at Ryanair dived 79% to 28.5 million. The carrier’s load factor (% of seats filled by passengers) in the month was 67%.

5. Delta Air Lines DAL became the first U.S. airline to resume services to Iceland. The carrier re-started operating nonstop flights from New York-JFK to Iceland’s capital Reykjavik. Delta is flying only vaccinated tourists to Iceland. The airline also aims to introduce a flight from Boston on May 20. Moreover, resumption of nonstop Minneapolis flights are expected May 27 onward.

Performance

The following table shows the price movement of major airline players over the past week and during the last 6 months.

The table above shows that all airline stocks, barring Hawaiian Holdings HA, traded in the red in the past week, inducing the NYSE ARCA Airline Index dip 1.8% to $103.78. Over the course of the past six months, the NYSE ARCA Airline Index has appreciated 44.6%.

What's Next in the Airline Space?

With the earnings season being over, stay tuned for usual news updates in the space.

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Southwest Airlines Co. (LUV) : Free Stock Analysis Report

Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report

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

Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report

American Airlines Group Inc. (AAL) : Free Stock Analysis Report

Allegiant Travel Company (ALGT) : Free Stock Analysis Report

SkyWest, Inc. (SKYW) : Free Stock Analysis Report

Hawaiian Holdings, Inc. (HA) : Free Stock Analysis Report

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