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(LUV) stock slipped even after it raised unit revenue guidance, as the continued grounding of its Boeing
(BA) 737 Max fleet takes a toll
on capacity and operating costs. Other major airline stocks, such as Delta Air Lines (DAL) and American Airlines (AAL), were mostly flat.XSouthwest Airlines now expects revenue per available seat mile, an industry metric for profitability, to increase 6.5% to 7.5%. This improves on previous guidance for the quarter ending in June to a 5.5% to 7.5% increase.However capacity guidance was lowered, with available seat miles seen falling 3.5% compared to its previous view for a 2%-3% dip. In addition operating costs per available seat mile are expected to rise 11.5% to 12.5%, which is worse than previous guidance for a 10.5%-12.5% increase. Meanwhile fuel efficiency is expected to decrease by 1% to 2%.One factor lowering capacity is the fact that its fleet of 34 Boeing 737 Max aircraft is grounded. The firm is saying they will remain out of action until September at least. It also said in its SEC filing that the "timeline remains uncertain for the MAX aircraft to return to service."The firm has removed roughly 100 daily flights from its schedule out of a total peak-day schedule of more than 4,000 daily flights. It announced last week that it was extending 737 flight cancellations.Southwest Airlines Stock SlipsSouthwest Airlines stock fell 0.4% to close at 51.51 on the stock market today, once again hitting resistance at the 50-day moving average. It has been consolidating for the past 39 weeks, but MarketSmith analysis shows it remains far below a 64.12 buy point. The relative strength line for Southwest Airlines stock is on a downward trend, close to May's multiyear low. Southwest Airlines stock has a so-so IBD Composite Rating of 65.Among other airline stocks, American Airlines climbed 2.1%, Delta Air added 0.6% and United Airlines (UAL) rose 1.4%. Low-cost carrier Spirit Airlines (SAVE) fell 1.8%.Boeing stock lost 1.4% after surging 5.4% on Tuesday, vaulting above its 50- and 200-day lines on the aerospace giant's big 737 Max order at the Paris Air Show.Among ETFs, the SPDR S&P Transportation ETF (XTN) fell 0.1% and the iShares Transportation Average ETF (IYT) gained 0.2%. The U.S. Global Jets ETF (JETS) edged up 0.5%.Boeing 737 Max Return UnclearIt's still not clear when the Boeing 737 Max will return to service. While the company has developed a software fix to the automatic flight-control system, it has yet to submit it to the FAA for certification.Last week Ali Bahrami, the Federal Aviation Administration's associate administrator for aviation, said that while the FAA is "under a lot of pressure," the grounded narrow-body jet will only return to service "when we believe it will be safe."Knowing when the Boeing 737 Max may return to service will help airlines contend with disruption. The FAA has said that there's no time frame to sign off on Boeing's proposed software fix for the jet.YOU WILL ALSO LIKE: Airline Stocks To Buy And Watch: How To Separate Winners From LosersWant Insight On The Hottest Stocks? Get A Week Of Free IBD Leaderboard Access HereGet Free IBD Newsletters: Market Prep | Tech Report | How To InvestIs The Ultimate Warren Buffett Stock A Buy? Here's What Analysis ShowsThe post Southwest Airlines Raises Revenue Target But Grounded Boeing 737 Max Takes Toll appeared first on Investor's Business Daily. Weiter zum vollständigen Artikel bei "Investors Business Daily"
Quelle: Investors Business Daily