In the past week, Southwest Airlines LUV announced plans to reduce its workforce to match the lower capacity partly due to delivery delays from Boeing BA. Driven by upbeat air-travel demand, Copa Holdings CPA reported a year-over-year uptick in traffic for November.

Spirit Airlines SAVE, in a filing with the Securities and Exchange Commission, informed of its inability to file a quarterly earnings report by its due date without “unreasonable effort or expense.” The stock has plunged lately, with bankruptcy looming reportedly after talks regarding a merger with Frontier Airlines halted. Frontier Airlines is owned by Frontier Group ULCC.

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Recap of the Recent Most Important Stories

1 Southwest Airlines decided to offer buyouts to workers at 18 airports across the United States in a bid to match its workforce with the reduced capacity. Deliver delays due to production issues at Boeing are being cited as a reason for lower capacity. The airport workers being offered buyouts include ramp agents, customer service agents, cargo workers and operations agents. Apart from the voluntary separation packages, the Dallas-based carrier is also offering an "employee time off" program in January that allows the concerned workers to take unpaid time off and return to their jobs later.

LUV currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

2. Riding on the buoyant air travel demand scenario, total traffic (measured by revenue passenger miles) at Copa Holdings increased 6.5% year over year in October. Capacity (measured by available seat miles) increased 6.6%, highlighting the rosy scenario with respect to operational expansion. CPA's September load factor (percentage of seats filled with passengers) was a solid 87.4%, reflecting operational efficiency in managing increased capacity while sustaining passenger loads.

3. With its stock nosediving, Spirit Airlines, in a filing with the SEC, has informed that it cannot file the third-quarter 2024 earnings report . The ailing ultra-low-cost carrier has been dealt a blow by the halt in merger-related talks with Frontier. Spirit is still in talks with creditors to explore ways of improving liquidity.

Performance

The following table shows the price movement of the major airline players over the past week and during the last six months.

 

Image Source: Zacks Investment Research

 

The NYSE ARCA Airline Index decreased 4.5% to $68.6 in the past week, as most stocks in the table above traded in the red. Over the past six months, the NYSE ARCA Airline Index has risen 7.3%.