Three airlines reported earnings today, offering a glimpse into the state of the airline biz. American Airlines, Southwest Airlines, and Alaska Air have the government’s Payroll Support Program (PSP) to thank for their profits, EPS, and revenue beats. ✈️
Southwest boasted the greatest net income of the bunch, generating $446 million (or diluted EPS of $0.73/share) on $4.7 billion in revenue. $LUV was down 1.6% today.
American reported $169 million in net income (or diluted EPS of $0.25/share) on $8.97 billion in revenue. $AAL was up 1.9% today.
Finally, Alaska posted $194 million in net income (or diluted EPS of $1.53/share) on $1.95 billion in revenue. $ALK was down 1.8% today.
The figures represent significant improvements QoQ and YoY for the airlines. It also goes a long way of supporting the ongoing recovery of the broader travel industry. However, they’re not back to their pre-pandemic glory just yet. Nearly every airline still relies on the government’s PSP while clawing back operating revenue and load factor (or the “fullness of the aircraft.”)
In Q3 2021, Southwest’s load factor was 81%. Alaska wasn’t far behind, at 80%. American booked a 78% load factor. For comparison though, most airlines posted load factors just shy of 50% in Q3 2020.
As you’d expect, all the airlines expect marginally higher load factor in Q4 2021, but they’ll be facing down the barrel of higher oil prices, labor shortages, and fears of another COVID surge. 👎
The US Global Jets ETF ($JETS) traded -0.08% today.