In the past week, American Airlines’ AAL flight attendants voted to give their union, Association of Professional Flight Attendants (APFA), the power to call a strike if a satisfactory agreement pertaining to their pay is not reached with management.
Meanwhile, Delta Air Lines’ DAL management has decided to start a nonstop service (on a daily basis) between Tokyo International Airport or HND and Honolulu International Airport from Oct 28, 2023. United Airlines UAL expects the upcoming Labor Day weekend to be the busiest one in its history as air travel demand has hit the roof in the post-COVID scenario.
Recap of the Past Week’s Most Important Stories
1. Only a few days after AAL’s pilots, represented by the Allied Pilots Association, approved a four-year deal pertaining to wage increases, the company has landed in a fresh labor crisis. This time, 99.47% of the APFA covered flight attendants voted for a strike in the event of a contract not being agreed upon. In the event of AAL’s management and APFA failing to come to an agreement through federal mediation, the latter can request to be released into a 30-day cooling-off period. Following the expiry of that period, the attendants may commence a strike. Even though flight attendants have voted in favor of a strike, it is highly doubtful whether the same will materialize, as the law makes it extremely difficult.
AAL, currently carrying a Zacks Rank #3 (Hold), was also in the news recently when management warned of higher non-fuel unit costs in third-quarter 2023, due to the deal with pilots. The story was covered in detail in the previous week’s write up.
2. Delta intends to operate flights on the Haneda-Honolulu route by using the Boeing 767-300ER jets, which are equipped with all modern facilities. We remind investors that in 2020, DAL moved its entire Tokyo operations from Narita Airport to Haneda. Per DAL’s managing director and president – Japan, Victor Osumi, “As travel demand gradually recovers in Japan, we decided to add the new Honolulu service to our HND network.”
3. Anticipating an extremely busy Labor Day holiday period, UAL’s management expects nearly 2.8 million passengers to travel by its flights in the Aug 31-Sep 5 period. To meet the anticipated demand swell over the Aug 31-Sep 5 period, AAL aims to operate approximately 32,000 flights during this period. The carrier expects that nearly 3.5 million passengers will travel by its flights in the above timeframe.
Driven by the travel surge, the Transportation Security Administration anticipates screening more than 14 million passengers in the Sep 1-Sep 6 period, despite the likely disruptions caused by tropical storm Idalia. Per TSA administrator David Pekoske, “We anticipate this Labor Day holiday weekend will be busy, with passenger volumes nearly 11% higher than last year, volumes that already exceeded 2019 Labor Day holiday travel volumes.”
The majority of airline stocks traded in the green in the past week. However, the gains were muted in nature. As a result, the NYSE ARCA Airline Index improved marginally over the period to $61.83. Over the course of the past six months, the sector tracker has increased 1.9%.
What’s Next in the Airline Space?
Ryanair Holdings RYAAY is likely to unveil its August traffic report in the coming days. Akin to the past few months, upbeat passenger volume is expected to boost traffic in August for this Irish carrier.
Ryanair Holdings PLC (RYAAY): Free Stock Analysis Report
This article originally appeared on Zacks
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