WATCH LIST
Airlines recently went through a string of consolidation with the most recent purchase of Westjet Airlines (WJA-T) and the acquisition proposal of Transat (TRZ.A-T) by Air Canada (AC-T).
The airline industry has recently received extensive press with the Boeing 737 Max crash and subsequent grounding of crafts. There are also concerns over the cost competition brought about by low-cost carriers. Furthermore, they can be vulnerable to oil price and geopolitical events.
CNBC was reporting a few weeks ago (in April) that analysts predicted Airline stocks could still rally another 20% this year.
In the long-term, analysts expect millennials who value experience to help bolster the airline industry.
🛫 Airlines
Canadian Stocks
Westjet Airlines (WJA-T)
Onex put a bid in to acquire the carrier, and regulators should approve the deal. They have been coming out with better numbers and guidance in the last quarter.
stockchase.com Air Canada (AC-T)
The largest airline in Canada. A well run company. They are in exclusive talks to buy Air Transat since May of this year. They experienced some problems with the Boeing 737 issue.
stockchase.com Chorus Aviation Inc (CHR-T)
They operate Air Canada Jazz. The new agreement with them will run for 17 years. They pay a good dividend and are doing very well with a big profit margin.
stockchase.com Transat .A. T. Inc (TRZ.A-T)
Transat is in exclusive acquisition talks with Air Canada and the outlook is very positive.
stockchase.com Canada Jetlines Ltd (JET-X)
A Canadian ultra low-cost airline out of Vancouver that is just getting off the ground. They recently announced that they successfully launched their system for ticket sales.
stockchase.com US Stocks
Southwest Airlines (LUV-N)
The world’s largest low-cost carrier. They pay a good dividend. They are moving into more longer range flights and moving out of their traditional shorter range flights.
stockchase.com American Airlines Group (AAL-Q)
Price competition has been tough for American Airlines and the stock price has been volatile. They recently extended their 737 MAX fllight cancellation period.
stockchase.com Spirit Airlines Inc. (SAVE-N)
An ultra-low-cost carrier from Florida. They are 7th in the commercial airline sector in the US. Low fuel costs have improved the bottom line significantly. They are anticipating a capacity growth of 13% in 2019, year-to-year.
stockchase.com Delta Air Lines Inc (DAL-N)
The company is doing well and ordering premium economy seats that will boost revenue. They have good free cash flow too. The company intends to continue buying back shares and raising dividends.
stockchase.com United Continental Holdings (UAL-N)
An airline holding company that owns and operates United Airlines. Their earnings are growing and revenues per available seat mile is also up 4.3% since last year.
stockchase.com Boeing (BA-N)
Stock prices have been struggling since the 737 Max crash. They are trading at 23x forward earning which is considered quite expensive. However, they are in a duopoly and demand for transport is strong. It will not go up in the short-term but worth holding.
stockchase.com JetBlue Airways Corp. (JBLU-Q)
An American low-cost carrier and the 6th largest in the US. The company hopes to double earnings by 2020. They are in the final stages of their program to cut costs in maintenance and airline staff.
stockchase.com Skywest Inc (SKYW-Q)
A holding company that operates SkyWest Airlines and ExpressJet. Their cash outlook is great and are considered undervalued right now.
stockchase.com Airbus (EADSY-OTC)
A European aerospace corporation. They have a backlog of orders and China seems to favor Airbus over Boeing. They bought the CSeries program from Bombardier last year that should create more lightweight planes.
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