A day after JetBlue Airways announced a positive outlook, its peers American Airlines and Southwest Airlines have followed suit. The two airlines are raising their guidance for the end of 2024 due to improving pricing and revenue environments.
American Airlines expects fourth-quarter TRASM (total revenue per available seat mile) to be flat to up 1% compared to 2023, thanks in part to a new loyalty credit card deal that will benefit the company. Southwest is also optimistic, projecting unit revenues to increase 5.5-7.0% on a year-over-year basis, with capacity down approximately 4%.
These announcements come after years of struggling, including American Airlines’ self-inflicted mess and Southwest’s recent settlement with a hedge fund investor. However, the trend has shifted in favor of these airlines, with United Airlines and JetBlue Airways also seeing increases in their shares.
The positive news has sent shockwaves on Wall Street, with American Airlines up 16%, Southwest up 4%, United Airlines up 5%, and Delta Air Lines also rising. The improvements in pricing and revenue environments are driving the optimism, as airlines adjust to a more resilient travel demand and implement cost-cutting measures to increase profits.
Source: https://finance.yahoo.com/news/airline-stocks-off-american-southwest-183600256.html