Airline Stocks About to Take Off: SAVE, RJET

It’s nearly impossible to discuss any positive news about the airline industry without inadvertently invoking flight-related metaphors. Nevertheless, recent earnings reports have inspired quite a few well-deserved nods of accomplishment.

The Airline Transportation sector of the Zacks Industry Rank list gained 84 positions last week; with several new earnings reports beating expectations. This is a large category of 25 companies, which now holds a rank of #92 out of 260 sectors. This is a boost of +84 positions over just one week. With positive earnings revisions outpacing negative 44 to 13, airlines are now averaging positive Earnings per Share (EPS) surprises of +27%.

There are a number of factors affecting this turnaround: reduced labor costs, increased consumer spending (dollar per mile), fewer flight cancellations, increased carrying capacity and the simple fact that people are just flying more this year compared to last. Combined, this means good news for an industry which has hurt more than most over the past decade.  (more)

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