UAL - Airline stocks ripped big gains in the first half - can the rallies extend?
2023-07-03 09:01:12 ET
The airline sector starts the second half of the year with investors looking for the recent hot streak in share prices to extend. Notably, airline companies have seen leisure and corporate demand hold better than anticipated, and have benefited from some moderation in jet fuel costs. Ahead of the Q2 earnings season, Delta Air Lines ( DAL ) issued a sizzling guidance update that sparked a late June rally across the sector.
While travel hit record levels for the busy 4th of July holiday weekend, delays and cancellations have created some negative headlines and passenger dissatisfaction. Those developments could increase the focus on booking trends, which have been mixed over the last month. Bank of America reported that bookings rebounded after the Juneteenth holiday, with system net sales up 4.0% vs. the level seen in 2019 for the week ending June 25. Volumes similarly accelerated sequentially, while pricing decelerated. However, on average over the past two weeks, system net sales declined 4.4% vs. 2019, a deceleration from the prior two weeks at -2.6%. "Outside of holiday-related volatility, we have noticed that all channels have followed a generally consistent downward trend since May, warned BofA.
Airline sector scorecard: SkyWest ( SKYW ) had the best gain for the first half of the year, with a 147% rally. Allegiant Travel ( ALGT ) jetted up 86%, while United Airlines ( NASDAQ: UAL ) and Delta Air Lines ( DAL ) were both up about 45% for the six-month period. American Airlines Group ( AAL ) +41% YTD, JetBlue ( JBLU ) +37%, and Alaska Air Group ( ALK ) +23% all impressed as well. As a sector catch-all, the U.S. Global Jets ETF ( JETS ) generated a 26% return for the first half to top broad stock market averages.
More on airline stocks:
- Global airline industry profits are strengthening despite economic turbulence
- JETS ETF Stuck On The Tarmac, Reiterate Hold Amid Mixed Macro Factors
- Seeking Alpha Quant Ratings across the airline sector
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Airline stocks ripped big gains in the first half - can the rallies extend?