The travel industry seemed just a few days ago to be on the cusp of renewal, with the Transportation Security Administration (TSA) screening nearly 2.5 million people during the Thanksgiving season. The TSA’s screening number was the highest since February 15, 2020. However, airlines are now scrambling to navigate a fast-degrading travel outlook amid deep concerns over the COVID-19 omicron variant.
In addition, the Biden administration has plans to restrict travel from South Africa and seven other countries for non-U.S. citizens. This is expected to cause negative repercussions aplenty in the coming months.
Delta Air Lines, Inc. (DAL)
DAL in Atlanta, Ga., provides scheduled air transportation for passengers and cargo internationally. The company has two segments, Airline and Refinery, and operates with a fleet of approximately 1,100 aircraft.
At the end of the September quarter of 2021, the company had $27.8 billion in total debt and finance lease obligations, with adjusted net debt of $19.3 billion. This might take a toll on DAL’s currently weak financials in the near term.
DAL’s adjusted operating revenue was $8.28 billion for the third quarter ended September 30, 2021, compared to $12.51 billion in the previous period. Its adjusted net income decreased 87.1% from the prior period to $194 million. Furthermore, its adjusted EPS came in at $0.30, compared to $2.33 in the year-ago period.
Analysts expect DAL’s EPS to remain negative in its fiscal year 2021. Also, its EPS is estimated to decrease 23.7% per annum for the next five years. And the stock has lost 7.4% in price over the past month to close the last trading session at $36.24.
DAL’s POWR Ratings reflect its poor prospects. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
The stock has a D grade for Momentum and Stability. Click here to access the additional POWR Ratings for DAL (Growth, Value, Sentiment, and Quality). DAL is ranked #14 of 32 stocks in the F-rated Airlines industry.
Ryanair Holdings plc (RYAAY)
Headquartered in Swords, Ireland, RYAAY and its subsidiaries provide scheduled-passenger airline services in Ireland, the United Kingdom, Italy, Spain, Germany, and other European countries.
RYAAY’s total current liabilities came in at €3.73 billion ($4.23 billion) for the period ended September 30, 2021, compared to €3.53 billion ($3.99 billion) for the period ended March 31, 2021. Its Total non-current liabilities were €5.41 billion ($6.12 billion), compared to €4.15 billion ($4.71 billion) for the same period. Furthermore, its restricted cash was €22.7 million ($25.71 million), compared to €34.1 million ($38.63 million), also for the same period.
Analysts expect RYAAY’s EPS to remain negative in its fiscal 2022. Over the past month, the stock has declined 13.6% in price to close the last trading session at $98.12.
RYAAY’s POWR Ratings reflect its poor prospects. The stock has a D grade for Value and Momentum.
United Airlines Holdings, Inc. (UAL)
Chicago-based UAL, through its subsidiaries, provides air transportation services in North America, Asia, Europe, Africa, the Pacific, the Middle East, and Latin America. The company transports people and cargo through its mainline and regional fleets.
UAL’s total current liabilities came in at $16.93 billion for the period ended September 30, 2021, compared to $12.72 billion for the period ended December 31, 2020. Its Total liabilities and stockholders’ equity was $69.29 billion, compared to $59.55 billion for the same period. And its total operating expense increased 63.6% year-over-year to $6.71 billion.
Analysts expect UAL’s EPS to remain negative in its fiscal year 2021. Also, its EPS is expected to decrease at the rate of 129.1% per annum for the next five years. Over the past month, the stock has declined 7.8% in price to close the last trading session at $42.54.
UAL’s POWR Ratings are consistent with this bleak outlook. The stock has an F grade for Stability and a D grade for Momentum and Sentiment.
Azul S.A. (AZUL)
Headquartered in Barueri, Brazil, AZUL and its subsidiaries provide passenger and cargo air transportation services. As of December 31, 2020, it operated 700 daily departures to 112 destinations.
AZUL’s net loss came in at R$2.24 billion ($400 million) for its fiscal 2021 third quarter, compared to R$1.07 billion ($190 million) of net income in the previous quarter. Its other operating expenses increased 33.3% sequentially to R$384 million ($68.59 million). Also, its loss per share was R$5.53, compared to an R$2.65 EPS in the prior quarter before.
AZUL’s EPS is expected to remain negative in its fiscal 2021 and 2022. Its EPS is expected to decrease 203.3% in the current year and 117.9% per annum for the next five years. Also, the stock has declined by more than 4% in the past month to close the last trading session at $12.70.
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DAL shares were trading at $35.85 per share on Tuesday afternoon, down $0.39 (-1.08%). Year-to-date, DAL has declined -10.84%, versus a 23.95% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...
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