Airlines Enter Earnings Season Wrestling With Challenges: What to Expect？
The airline industry is still dealing with issues that have plagued it all year, according to Cowen analyst Helane Becker. These include volatile jet fuel prices, supply chain issues causing delays in maintenance and repair, aircraft delivery delays and difficulty hiring and retaining employees, particularly pilots.
We will also be looking for companies to talk about their plans to rein in costs. We are well aware salaries are going up through hourly pay increases and bonuses, and once that genie is out of the bottle, it's hard to put it back in.
Helane Becker said.
The analyst thinks we could see positive surprises from
While the negative surprises from the likes of
Non-network airlines are seeing defections to American, Delta, and United as they aggressively hire both for growth and to replace retiring pilots.
Helane Becker wrote in a note released on Friday.
Catalysts of Airlines Earnings
Hedge against Jet Fuel
Airlines with oil hedges are set to save billions of dollars on their fuel bills this year, the first such gains since the industry was ravaged by the coronavirus pandemic.
Both Southwest Airlines and Air France-KLM said they stand to gain about $1 billion each from their hedging policies, a benefit that will at least partially cushion the companies against higher oil prices.
Travel demand recovery
It's hard to remember what a normal aviation market looks like. Still, we're getting closer to it with each passing week.
Passenger traffic in North America and Latin America in July was just 10% and 11.5% below levels in the same month of 2019 in July, the International Air Transport Association saidin September. In some places, numbers are even healthier. The airports in Cancun and Las Vegas recently posted record passenger numbers.
Source: Marketwatch, Bloomberg
Disclaimer: Past performance can't guarantee future results. Investing involves risk and the potential to lose principal. This article is for information and illustrative purposes only.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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