UAL to DAL: Kalkine explores top Airline stocks to watch in September

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UAL to DAL: Kalkine explores top Airline stocks to watch in September

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 UAL to DAL: Kalkine explores top Airline stocks to watch in September
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Highlights:

  • United Airlines Holdings has a market cap of US$ 12.9 billion.
  • Delta Air Lines’ operating revenue in the June 2022 quarter was US$ 12.3 billion.
  • American Airlines Group registered a revenue of US$ 13.4 billion in Q2 2022. 

The resurgence of the travel industry brings a lot of respite to related sectors like aviation companies. Travel was among the most-hit industries after the onset of the pandemic. The economic slowdown triggered by the Russia-Ukraine war also impacted the industry.

But it has seen steady growth and is fast moving to the pre-pandemic level. This could mean that consumers might be willing to spend on travel, boosting businesses involved in travel.

According to a Statista Report, revenue in the travel and tourism industry is expected to reach US$ 175.4 billion in 2022.

Airline companies like United Airlines Holdings, Inc. (NASDAQ: UAL) have raised their sales and margin outlook citing robust demand for summer travel.  Other airline companies could also benefit from a revival of the travel industry.

Here, we look at five airline stocks picked by Kalkine Media®:

United Airlines Holdings, Inc. (NASDAQ: UAL)

United Airlines is a publicly traded US airline holding company that owns and runs United Airlines, Inc. It has its base in the Willis Tower in Chicago.

The US$ 12.9 billion market cap company's stock rose 19.76 per cent over the past six months. Its share price increased close to 10 per cent in a week.  

In the last 52 weeks, the UAL stock reached its highest price at US$ 54.52 on November 8, 2021, while it tanked to its lowest on March 8, 2022, at US$ 30.54.

In the second quarter of 2022, United Airlines Holdings posted a net income of US $329 million. The adjusted net income in the reported quarter was US$ 471 million.

United Airlines became the first airline to fly non-stop between Washington and Cape Town, South Africa, in July this year and also resumed 24 international routes in the second quarter of 2022.

Delta Air Lines, Inc. (NYSE: DAL)

The legacy carrier Is among the oldest airlines in the world. Delta Air Lines has a market cap of US$ 20.4 billion. Although DAL stocks plunged by over 18 per cent year-over-year, it has seen a growth of 3.23 per cent over the past month. The stock registered QTD (quarter-to-date) returns of 11.88 per cent.

It touched the highest 52-week price of US$ 46.27 on April 21, 2022, while its lowest price in 52 weeks was US$ 28.09 on June 30, 2022.

In its GAAP financial results for the June quarter of 2022, Delta registered an operating revenue of US$ 13.8 billion. The earnings per share (EPS) were US$ 1.15 in the reported quarter. The operating revenue was US$ 12.3 billion in the June quarter.

American Airlines Group Inc. (NASDAQ: AAL)

American Airlines Group Inc. was formed in December 2013 through a merger of AMR Corporation and US Airways Group.

The US$ 9 billion American Airlines Group has the youngest fleet of aircraft among legacy carriers. The AAL stock has gone down by over 25 per cent YTD. But it has soared over seven per cent over the past month.

The company said it achieved a net income of US$ 476 million or US$ 0.68 per diluted share in the second quarter of fiscal 2022.

Despite flying 8.5 per cent less than its capacity, American Airlines claimed to achieve a record Q2 2022 revenue of US$ 13.4 billion.      

The airline reported total available liquidity of US$ 15.6 billion at the end of the second quarter of this year. American Airlines Group is expected to pay close to US$ 15 billion of total debt by 2025.

Market cap of ULCC, ATSG, DAL, AAL, UALSource: ©Kalkine Media®; © Canva via

Air Transport Services Group, Inc (NASDAQ: ATSG)

Air Transport Services Group's US aviation company provides air cargo transportation to domestic and international carriers. Its revenue mostly comes from the ACMI (Aircraft, Crew, Maintenance, and Insurance) services, one of its two main segments, the other being Cargo Aircraft Management.

The US$ 2.1 billion market cap company's stock saw a growth of close to five per cent YoY. It has a P/E ratio of 10.87.  

Air Transport Services announced a 24 per cent increase in revenue in the second quarter of 2022 compared to the year-ago quarter. For the quarter that ended June 2022, its revenue was US$ 510 million.

Compared to the June quarter of 2021, Air Transport Services posted an adjusted EBITDA of US$ 158 million in the June 2022 quarter, an increase of 23 per cent.

Air Transport Services' shares reached their highest price at US$ 34.54 on March 29, 2022, while tanking to a 52-week lowest price at US$ 23.68 on October 19, 2021.

Frontier Group Holdings, Inc. (NASDAQ: ULCC)

Frontier Group Holdings, Inc. is an American aviation company that operates through its subsidiary, Frontier Airlines.

The low-fare airline has a market cap of US$ 2.8 billion. Over the past six months, ULCC stock saw a growth of over 18 per cent.

The company said that its business faced a lot of headwinds while publishing its financial results for the quarter that ended June 30, 2022.

The merger agreement Frontier Airlines had reached with Spirit Airlines got terminated in July this year.

Frontier Airlines reported total assets of US$ 954 million at the end of June 2022, while it was US$ 1,037 in the corresponding quarter a year earlier.

The company earned a total operating revenue of US$ 909 million in the three months ended June 30, 2022, compared to US$ 550 million in the year-ago quarter.

Bottom line

The above-discussed airline companies have done fairly well but investing in the stock market is different in the current scenario. Investors should tread cautiously in picking their stocks as the market is uncertain this year. The bearish trend and the level of volatility in the market have affected investors tremendously. A long-term investment is the only approach to investing during market upheavals, with rising inflation and an impending recession.

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