For Immediate Release
 
Chicago, IL – June 12, 2014 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the United Continental Holdings Inc. (UAL–Free Report), Southwest Airlines Co. (LUV–Free Report), Delta Airlines Inc. (DAL–Free Report), American Airlines Group Inc. (AAL–Free Report) and International Paper Company (IP–Free Report).
 
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Here are highlights from Wednesday’s Analyst Blog:

Airline Stock Roundup

Airline stocks reflected a mixed trend in the past week’s trading sessions. While some stocks reacted positively to the International Air Transport Association (:IATA) data, some stocks recorded a lackluster week.   

Stocks like United Continental Holdings Inc. (UAL–Free Report) and Southwest Airlines Co. (LUV–Free Report) made headlines for gaining altitude in share prices. Delta Airlines Inc. (DAL–Free Report) was also in the limelight for its deal with Airbus.

Recap of Last Week’s Most Important Stories

1. One of the major events past week was the International Air Transport Association’s (:IATA) profit guidance. Last week, IATA announced its 2014 profit outlook for the global airline industry, which has been trimmed down by $700 million from the previous forecast to $18 billion. While IATA chief economist Brian Pearce remains hopeful about the performance of Middle East and North American aviation companies, a slowdown in China’s economy and volatile global trade are key factors that force a conservative outlook on this year’s industry profits.

2. United Continental gained significant momentum on Monday last week driven by IATA’s bullish view on the North American airline industry. The stock gained $2.33 or 5.25% on Jun 2 in NYSE. Notably, the Chicago-based carrier also ended the day substantially higher than the NYSE Composite. (Read More: United Continental Shares Gain Altitude)

3. Another major airline that registered a notable takeoff was Southwest Airlines, which reached a fresh 52-week high of $27.22 last week on Jun 3, before closing the trading session a little lower at $27.20. This reflected a solid return of over 95% in the past 12 months. Moreover, the company’s expected long-term earnings growth rate of 30.8% also makes the stock appear attractive. (Read More:Southwest Airlines Hits 52-Week High Anew)

4. Last week, Delta Airlines announced plans to purchase 15 new jets from Airbus in a deal worth $1.65 billion. The company has ordered 15 narrow bodied A-321 aircraft, with deliveries scheduled 2018 onward. This fleet will replace some of Delta’s less efficient domestic aircraft. (Read More: Delta Extends Airbus Order)

Delta Airlines also reported its traffic for May 2014, which was driven by strong demand in both the domestic and transatlantic markets. Strength in Atlanta, New York and Seattle boosted the carrier’s performance and airline traffic moved up 5.8% year over year to 17.73 billion.

5. Another major news from the past week include American Airlines Group Inc. (AAL–Free Report) subsidiary U.S. Airways’ Codeshare Agreement with Air Berlin PLC Co, which is also a member of Oneworld airline alliance. The new agreement will foster relation between the two air carriers and provide passengers of U.S. Airways better access to Germany and other European destinations.
 
International Papers’ Veritiv to Trade June 18

International Paper Company (IP–Free Report) announced the timing with regard to the upcoming merger of its distribution solutions business, xpedx, with UWW Holdings, Inc. The new publicly-traded company, Veritiv Corporation, to be formed as a result of the merger will begin trading on a ‘when-issued’ basis on New York Stock Exchange (:NYSE) under symbol ‘VRTV WI’ on June 18.

Thereafter, on Jul 2, 2014, the company will commence regular trading under the ticker ‘VRTV.’

The board of directors of International Paper has declared that its shareholders as of Jun 20, 2014, will be entitled to receive 8.16 million shares of Veritiv’s common stock, under a pro rata distribution system. The distribution ratio is estimated to be around 0.0188 shares of Veritiv common stock for each share of International Paper, calculated on the basis of the latter’s common stock currently outstanding. The distribution is subject to certain conditions.

Any fractional shares of Veritiv common stock will be aggregated and sold in the open market, with the resultant proceeds being distributed in cash to relevant shareholders on a pro rata basis.

International Paper had announced the spin-off of its struggling xpedx distribution business in a tax-efficient transaction under a Reverse Morris Trust structure in January. Per the deal, xpedx will merge with UWW Holdings, the parent company of Unisource Worldwide, to form a new entity, Veritiv Corporation. International Paper will receive $400 million in cash and own 51% stake of the new company, and UWW Holdings will own the remaining stake.

Following the completion of the merger, Veritiv will own and operate the combined distribution solutions businesses of xpedx and Unisource. It will provide end-to-end print, packaging facility and logistic solutions to customers, by leveraging its extensive geographic reach, rich product portfolio and differentiated service platform.

North America-based Veritiv’s annual revenues are projected to be in the range of $9 to $10 billion. The merger is expected to generate about $150 million to $225 million in annual net synergies.

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Airline stocks reflected a mixed trend in the past week’s trading sessions. While some stocks reacted positively to the International Air Transport Association (:IATA) data, some stocks recorded a lackluster week.   

Stocks like United Continental Holdings Inc. (UAL) and Southwest Airlines Co. (LUV) made headlines for gaining altitude in share prices. Delta Airlines Inc. (DAL) was also in the limelight for its deal with Airbus.

Recap of Last Week’s Most Important Stories

1.    One of the major events past week was the International Air Transport Association’s (:IATA) profit guidance. Last week, IATA announced its 2014 profit outlook for the global airline industry, which has been trimmed down by $700 million from the previous forecast to $18 billion. While IATA chief economist Brian Pearce remains hopeful about the performance of Middle East and North American aviation companies, a slowdown in China’s economy and volatile global trade are key factors that force a conservative outlook on this year’s industry profits.

2.    United Continental gained significant momentum on Monday last week driven by IATA’s bullish view on the North American airline industry. The stock gained $2.33 or 5.25% on Jun 2 in NYSE. Notably, the Chicago-based carrier also ended the day substantially higher than the NYSE Composite. (Read More: United Continental Shares Gain Altitude)

3.    Another major airline that registered a notable takeoff was Southwest Airlines, which reached a fresh 52-week high of $27.22 last week on Jun 3, before closing the trading session a little lower at $27.20. This reflected a solid return of over 95% in the past 12 months. Moreover, the company’s expected long-term earnings growth rate of 30.8% also makes the stock appear attractive. (Read More:Southwest Airlines Hits 52-Week High Anew)

4.    Last week, Delta Airlines announced plans to purchase 15 new jets from Airbus in a deal worth $1.65 billion. The company has ordered 15 narrow bodied A-321 aircraft, with deliveries scheduled 2018 onward. This fleet will replace some of Delta’s less efficient domestic aircraft. (Read More: Delta Extends Airbus Order)

Delta Airlines also reported its traffic for May 2014, which was driven by strong demand in both the domestic and transatlantic markets. Strength in Atlanta, New York and Seattle boosted the carrier’s performance and airline traffic moved up 5.8% year over year to 17.73 billion.

5.    Another major news from the past week include American Airlines Group Inc. (AAL) subsidiary U.S. Airways’ Codeshare Agreement with Air Berlin PLC Co, which is also a  member of Oneworld airline alliance. The new agreement will foster relation between the two air carriers and provide passengers of U.S. Airways better access to Germany and other European destinations. 

Performance

The following table shows the price movement of the major airline players over the past 5 trading days and during the last 6 months:

Over the trailing 5 trading days, most of the airline stocks exhibited mixed stock price movements. 

Top gainers include GOL Linhas (GOL), JetBlue Airways (JBLU) and American Airlines Group Inc. (AAL) with growth of 7.7%, 3.5% and 2.0% respectively. On the flip side, the biggest losers were Hawaiian Holdings, Inc (HA), Delta Air Lines and Alaska Air Group, Inc. (ALK) with stocks down 0.7%, 0.6% and 0.5%, respectively.

In terms of performance over the past 6 months, most of the stocks have fared reasonably well with the exception of Copa Holdings, which dropped 7.5% over the period. The biggest gainers in the 6-month span were Spirit Airlines, Inc. (SAVE) and Hawaiian Holdings, sporting growth of 115.5% and 82.3%, respectively.

What’s Next in the Airline Biz?

So far this week, major carriers like United Continental and Southwest Airlines have posted their May 2014 operational performance results. Both airline companies recorded growth in their traffic results.

Further, just couple of months after initially hinting at plans to sell LiveTV, JetBlue has divested its in-flight entertainment subsidiary to French defence electronics company Thales Group for a cash consideration of $399 million

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RAPID CITY, S.D. (AP) – Delta Airlines has begun offering a weekly nonstop flight between Rapid City and Atlanta.

The Rapid City Journal reports (http://bit.ly/1idHc7d ) the new flight comes after the Rapid City Regional Airport spent $19 million renovating the facility.

Atlanta is the world’s busiest airport offering direct service to 207 destinations including 61 international locations in 43 countries.

Ray Carpenter is the board president of Rapid City’s airport. Carpenter says Delta’s new flight will allow passengers in the area to have access to the southeastern United States and will provide 80 additional destinations across the domestic and international flight community.

The airport in western South Dakota offers nonstop service to eight more cities: Salt Lake City, Minneapolis, Denver, Chicago, Dallas, Houston, Las Vegas and Phoenix.

Information from: Rapid City Journal, http://www.rapidcityjournal.com

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Posted: Sunday, June 8, 2014 4:45 pm
|


Updated: 8:00 pm, Sun Jun 8, 2014.

Delta Airlines debuts Atlanta to Rapid City flight

Associated Press |

0 comments

RAPID CITY, S.D. (AP) — Delta Airlines has begun offering a weekly nonstop flight between Rapid City and Atlanta.

The Rapid City Journal reports (http://bit.ly/1idHc7d ) the new flight comes after the Rapid City Regional Airport spent $19 million renovating the facility.

Atlanta is the world’s busiest airport offering direct service to 207 destinations including 61 international locations in 43 countries.

Ray Carpenter is the board president of Rapid City’s airport. Carpenter says Delta’s new flight will allow passengers in the area to have access to the southeastern United States and will provide 80 additional destinations across the domestic and international flight community.

The airport in western South Dakota offers nonstop service to eight more cities: Salt Lake City, Minneapolis, Denver, Chicago, Dallas, Houston, Las Vegas and Phoenix.

___

Information from: Rapid City Journal, http://www.rapidcityjournal.com

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Sunday, June 8, 2014 4:45 pm.

MONCTON, N.B. – As Elaine Gray emerged from the sombre, dimly lit auditorium where three slain Mounties lay in flag-draped coffins, the Moncton woman dabbed her …

As Delta Airlines Flight 4675 from Atlanta taxied down the tarmac at Rapid City Regional Airport on Saturday, two fire trucks sprayed water to form an arch over the aircraft.

The water salute marked the opening of a new route that connects Rapid City to the world’s busiest airport and beyond. 

The arrival of the first non-stop flight from Atlanta’s Hartsfield-Jackson Atlanta International Airport to Rapid City at 11:15 a.m. is a milestone in the growth of Rapid’s City’s airport. 

It took years of hard work and cost $19 million to modernize the Rapid City Regional Airport, but the investment paid off, said Ray Carpenter, president of the Rapid City Regional Airport Board.

Gaining direct access to Atlanta, the largest hub of Delta Airlines, and a city with a population of 5.5 million, is a huge coup, he said.

“This option of nonstop service into Atlanta will allow access to the Southeastern United States and will provide 80 additional destinations across the domestic flight community, as well as the international flight community,” Carpenter said.

Delta will offer weekly flights every Saturday between Atlanta and Rapid City throughout the summer.

Hartsfield-Jackson offers direct service to 207 destinations, including 61 international destinations in 43 countries, according to a news release.

Michelle Lintz, executive director of the Rapid City Convention Visitors Bureau, said she was thrilled when she learned the flight was scheduled, noting the positive impact it will have on tourism.

“Anything that makes it easier for people to get to the Black Hills is great for everyone,” she said.

The Rapid City Regional Airport now offers nonstop service to nine cities: Salt Lake City, Minneapolis-St. Paul, Denver, Chicago, Dallas, Houston, Las Vegas, Phoenix and now Atlanta.

Several airport and city officials were on hand to greet about 60 passengers once they stepped into the airport.

The warm reception, which featured a table of cookies and lemonade was a pleasant surprise. But for 21-year-old Alabama resident Sinrra Swalve, it was icing on the cake. The best part about the flight was simply its existence.

Swalve said came to the Black Hills to visit her relatives who live in the area. As she planned the trip, her relatives repeatedly told her there was no flight from Atlanta to Rapid City.

“My grandpa kept telling me to keep checking the flight cause he was sure it had to stop over somewhere,” she said. “They were double and triple checking that it existed.”

The direct connection doesn’t only benefit people coming to the Black Hills, it makes it easier for local residents to visit the Southeast.

Just ask Jennifer Julian, 35, who moved to Rapid City seven years ago from Charlotte, N.C. She has frequently visited her family in the Myrtle Beach, S.C., area since the move and became quite familiar with the inconveniences of flying from the Midwest to the Southeast.

“It used to be such a pain to fly there from here,” she said. “I’d have to go from here to Minneapolis, then to Atlanta, then to Raleigh and do it all over again on the way back.”

But when Julian returned to Rapid City from her trip to North Carolina on Saturday, she was ecstatic that she was able to skip the stop in Minnesota.  

“That one less plane trip is such a huge difference, especially when I’m flying with my son,” she said motioning to her 4-year-old son, Losan Lockhart.

She is hopeful that within time, the flight will be offered year-round, not just seasonally.

In an effort to enrich customer experience, Delta Airlines Inc. (DAL) has upgraded its Economy Comfort seating in all transcontinental flights operating from New York’s John F. Kennedy Airport to Los Angeles, San Francisco and Seattle.   

Delta Economy Comfort passengers will now receive a complementary pillow and blanket on their seats, when they board their flight. On boarding, they will also receive sleeping kits, which will include eye shades and ear plugs.   

The frills do not just end there. Passengers will also get free Luvo snack wraps and a complementary bottle of water during the journey. Additionally, Luvo frozen yogurt bars will be given to passengers as a mid-flight snack except in flights that will leave the west coast after 9 pm.

Economy Comfort fliers on Delta’s transcontinental routes already receive early boarding privileges and seats with extra legroom along with complementary beer, wine and spirits.

According to the U.S. Bureau of Transportation Statistics, New York–Los Angeles is the highest revenue generating domestic route. Traditional carriers continue to invest in customer comfort within this lucrative route, particularly in the high-end business class segment.

Delta has ensured that it does not fall behind in this regard. The carrier has constantly invested in air and on ground to enhance its customers’ flying experience. Atlanta-based Delta already provides lie-flat seats for its business elite customers for flights operating between New York and Los Angeles and will soon introduce a fleet of three new Boeing 757’s to expand customer comfort within all flights on the same route.  

Delta continues to fight competition from American Airlines Group Inc. (AAL) and United Continental Holdings Inc. (UAL) to expand market share within the route. Reportedly, JetBlue Airways Corp. (JBLU) is also set to start premium transcontinental service from June 2014, thus heightening the competition.  

We believe this is a strategic move by Delta to lure more customers so that despite keeping fares unchanged, the company is able to garner additional revenues from these routes. Notably, the company’s May 2014 operational performance was quite impressive owing to strength in the transatlantic markets, which paves the way for incremental opportunities within these regions going forward.

Delta currently carries a Zacks Rank #1 (Strong Buy).

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MENOMONIE, Wis. (KMSP) –

He spent decades piloting everything from F-16s to commercial jets for Delta Airlines. Through it all, he maintained an spotless safety record until a maneuver at a Wisconsin air show went terribly wrong.

Bill Cowden, 47, of Menomonie, Wis., began flying in 1986. He started with F-16s in the U.S. Air Force and eventually flew aerobatic planes to tap into that thrill of flying military jets. Now, his friends are mourning his death after he died in the cockpit of a stunt plane.

“Only a day after the accident — it’s hard to think about why we would want to continue to perform at airshows,” announcer Jeff Overby admitted.

Overby told Fox 9 News he couldn’t believe his eyes on Sunday afternoon. He was watching his friend of 7 years perform aerial maneuvers in his YAK-55M Russian one-seater when things suddenly took a tragic turn.

“It appeared from the ground that Bill took several turns coming down, which was typical of his move — but then there was some period of recovery — but it looked like the ground was much closer than what he’d normally anticipated.”

Cowden’s plane crashed near the Green Circle Trail in a wooded area 1,000 feet east of the Stevens Point Municipal Airport runway. It’s still a shock to the man who knew Cowden as an extremely capable pilot.

“He’s been performing airshows for near 10 years,” Overby said. “He’s a very capable pilot with over 10,000 commercial flight hours.”

As a retired Air Force pilot, Cowden also had 15,000 hours of F-16 time under his belt. He leaves behind a wife and an 8-year-old son, Gunner.

Although Overby and others are aware of the risks of flying, he says the loss may make some think twice about returning.

“Right now, there would be some reluctance to get back in the cockpit immediately,” he acknowledged. “I’m certain with all pilots, there’s a certain characteristic or attitude that allows us to handle these things.”

Cowden was a first officer with Delta Airlines and served as an MSP-based pilot for 14 years — but even his 25 years couldn’t keep him clear of the dangers that come with taking to the skies.

“It looked like things were performing and engines were running smoothly,” Overby said. “Ran out of altitude.”

In accordance with its fleet renewal strategy, Delta Airlines Inc. (DAL) has once again favoured European aircraft manufacturer Airbus over the latter’s arch rival The Boeing Co. (BA). This time the carrier has announced plans to purchase 15 new jets from Airbus in a deal worth $1.65 billion.

The company has ordered 15 narrow bodied A-321 aircraft, with deliveries scheduled 2018 onward. This fleet will replace some of Delta’s less efficient domestic aircraft.

The single isle A-321 will have 192 seats, including 20 First Class seats and 23 extra-legroom seats. The aircraft will feature CFM56 engines and will have in-flight entertainment like Wi-Fi services, and live satellite TV and on-demand options.

This comes as the second order from Delta for Airbus jets within a span of nine months, demonstrating the premier passenger carrier’s recent inclination toward the European vendor. In Sep 2013, Delta had ordered 10 A330-300 wide body jets and 30 narrow body A321 aircraft from Airbus worth $5.6 billion, to be delivered between 2015 and 2017.  

Post the latest Airbus requisition, Delta will have 45 firm orders for A-321 jets along with its existing 126 narrow-bodied jets, which includes 57 A-319’s and 69 A-320’s. The first of the 45 A-321 jets is expected to arrive in early 2016. Notably, Delta has the most diversified fleet among all the other U.S. carriers with more than 750 aircraft manufactured by Airbus and Boeing.

The A-321, which is a stretched version of the well-accepted A-320, is much in demand among carriers as it offers more seats with a relatively small increase in fuel cost. This aircraft suits the need of popular U.S. carriers like Delta which witnesses fast seat fill-up on its domestic flights.

In an attempt to enhance its fleet structure, amenities, products and technological base, Delta aims to invest $2.0–$2.5 billion annually, till 2018. The latest transaction is part of this capital investment plan.

According to Delta, the new airplanes will help enhance customer comfort in addition to boosting its shareholders’ returns. We believe the attractiveness of carriers toward these jets lies in the extra revenue-generating opportunity that they offer against a minimal rise in expenses. In our opinion, the latest addition of aircraft from Airbus will allow Delta to improve its bottom line, going forward.

Delta currently sports a Zacks Rank #1 (Strong Buy). Other well-placed stocks worth considering within this sector include American Airlines Group Inc. (AAL) and Southwest Airlines Co. (LUV). Both the stocks currently carry the same rank as Delta.

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