Tag Archives: Southwest Airlines Co

Southwest, Tesla, Las Vegas Sands

A Southwest Airlines Co. Boeing 737 passenger jet pushes back from a gate at Midway International Airport (MDW) in Chicago, Illinois.

Luke Sharrett | Bloomberg | Getty Images

Check out the companies making the biggest moves premarket:

Southwest — The airline dropped 2.1% after reporting a $220 million loss for the fourth quarter after the holiday meltdown cost the company millions in expenses and drove up expenses.

Comcast — The media company reported fourth-quarter earnings that beat Wall Street’s expectations, with earnings per share coming in at 82 cents, adjusted, versus the 77 cents expected from analysts surveyed by Refinitiv. Revenue was $30.55 billion compared to the $30.32 expected. Shares, however, were down less than 1% in the premarket.

Tesla — The electric-vehicle maker soared 7% after reporting record revenue and an earnings beat. CEO Elon Musk said Tesla might be able to produce 2 million cars this year.

Las Vegas Sands — Shares of the hotel and casino operator rose about 4% despite the company posting weaker-than-expected financial results for the most recent quarter. Wall Street analysts cited upbeat comments about its reopening in Macao on the company earnings call for their positive outlook on the stock.

Levi Strauss — Shares of the denim maker popped 6% premarket on a better-than-expected quarterly report. Levi Strauss topped analysts’ revenue estimates and beat earnings projections by 5 cents a share.

Blackstone — Blackstone shares dipped less than 1% after the asset manager reported mixed earnings results. Total segment revenues fell short of expectations, while distributable earnings beat estimates by 12 cents a share.

Chevron — The energy giant jumped more than 3% in premarket after the company announced a $75 billion stock buyback program and a dividend hike to $1.51 from $1.42 per share. The buyback program will become effective on April 1.

Dow — The chemicals giant posted fourth-quarter earnings, revenue and adjusted EBITDA that missed analyst expectations before the bell Thursday, sending the stock down more than 3% in premarket trading.

IBM — Shares of IBM shed 2.7% after the company reported quarterly results Wednesday that generally exceeded Wall Street’s expectations but included an announcement that the firm will cut 3,900 jobs. IBM reported adjusted earnings per share of $3.60 per share on $16.69 billion in revenue where analysts expected $3.60 per share and $16.4 billion in revenue, per Refinitiv.

American Airlines — The airline gained 1.5% after its fourth-quarter profits beat Wall Street’s expectations, thanks to strong holiday demand and high fares.

Seagate Technology — The data storage company jumped more than 8% in premarket trading after reporting earnings and revenue for the last quarter that beat expectations.

Pfizer — The pharma giant was downgraded by UBS on Thursday, which said Pfizer’s Covid franchise estimates need to come down and its pipeline is too premature. Pfizer was up less than 1% in the premarket.

— CNBC’s Carmen Reinicke, Yun Li, Samantha Subin, Tanaya Macheel and Michael Bloom contributed reporting.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

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Delta plans to offer free Wi-Fi starting Feb. 1

The passenger cabin on a Delta Boeing 737-900ER is shown while landing in Salt Lake City, Utah.

Mike Blake | Reuters

Delta Air Lines will offer travelers Wi-Fi for free starting Feb. 1, CEO Ed Bastian said Thursday.

Most U.S. flights will introduce the service next month, but it will become available on more each week, Bastian said during a presentation at the Consumer Electronics Show in Las Vegas.

Delta’s plan to make Wi-Fi free, after years of studying the possibility, comes as airlines compete for customers in the travel rebound following the pandemic slump nearly three years ago.

“It’s free. There’s no fine print,” Bastian said Thursday. “We have invested over $1 billion to create this.”

Travelers will access the free internet service by logging in with their Delta SkyMiles frequent flyer account information, Bastian added.

Delta last March said it was outfitting more of its planes with fast Wi-Fi from Viasat and made it available for a $5 flat fee. The carrier already offers free messaging.

Most airlines charge for Wi-Fi: United Airlines charges $8 for members of its frequent flyer program and $10 to other customers, and Southwest Airlines charges $8. It’s free on JetBlue, which has some corporate sponsorships for the service, and Hawaiian Airlines is planning to offer free internet with SpaceX’s Starlink this year.

Some airline executives have been hesitant to roll out the free service until the service becomes more reliable.

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Shaw Communications, Li Auto, Southwest and others

Check out the companies making headlines before the bell:

Shaw Communications (SJR) – Canada’s Competition Tribunal dismissed an attempt by the country’s competition watchdog to block the $26 billion acquisition of the telecom company by rival Rogers Communications (RCI). Shaw surged 10.1% in the premarket, while Rogers gained 0.4%.

Li Auto (LI) – Li Auto said it expected to deliver more than 20,000 of its electric vehicles this month, higher than the 14,087 the China-based EV maker delivered in December 2021.

Southwest Airlines (LUV) – Southwest said it planned to return to a regular flight schedule Friday and promised to reimburse customers for any reasonable expenses they incurred due to the airline canceling thousands of flights over the past week.

Tesla (TSLA) – Tesla is down 1% in the premarket after posting its first back-to-back gains since November 22 to 23. Tesla has not risen three days in a row since a four-day win streak from October 25 to 28. The stock is still down 65% for 2022.

Audacy (AUD) – Audacy stock rallied 9.7% in the premarket after the small-cap radio station operator said it will auction off the radio.com internet domain with a reported minimum bid of $2.5 million.

Mesa Air Group (MESA) – The regional air carrier reported a bigger-than-expected quarterly loss and revenue that fell short of analyst estimates. Mesa shares fell 3% in premarket trading.

Enovix (ENVX) – The lithium-ion battery manufacturer appointed Raj Talluri as its chief executive officer, effective January 18. Talluri was senior vice president and general manager of Micron Technology‘s (MU) mobile business unit. Enovix jumped 5.1% in premarket action.

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Tesla, AMC, Southwest and others

Check out the companies making headlines before the bell:

Tesla (TSLA) – Tesla gained 1.6% in the premarket in a volatile session, following a seven-day losing streak and declines in ten of the past eleven sessions. Baird reduced its price target on Tesla to $252 per share from $316, but continues to rate the stock outperform.

AMC Entertainment (AMC) – AMC Entertainment rose 1.2% in premarket trading after CEO Adam Aron asked the movie theater chain’s board to freeze his salary. He also urged other top AMC executives to do the same.

Southwest Airlines (LUV) – Southwest Airlines fell 1.3% in premarket action as it continues to cancel flights in its struggle to return to a normal schedule. Southwest has canceled thousands of flights over the past week, following a severe winter storm, and is limiting bookings over the next few days.

Nvidia (NVDA), Micron Technology (MU) – These and other semiconductor stocks remain on watch as investors focus on an oversupply of chips. That is in sharp contrast to the global shortage during the pandemic, when demand was surging.

Apple (AAPL) – Apple is marginally higher in the premarket following its Tuesday close, which was the lowest since June 2021. Apple fell during the past three days and in eight of the past nine trading sessions.

Lyft (LYFT) – The ride-hailing company’s stock remains on watch after closing lower than $10 per share for the first time since going public in 2019. It rebounded by 1.1% in premarket trading.

Generac (GNRC) – The power equipment maker’s stock was rated buy in new coverage at Janney Montgomery Scott with a price target of $160, implying a 76% upside from current levels. Generac is the worst performer in the S&P 500 for 2022 with a 74.1% decline.

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Airlines cancel 17,000 flights due to severe winter weather but disruptions ease

Aircraft are deiced at General Mitchell International Airport in Milwaukee

Reuters

Flight cancellations eased further on Monday but disruptions from severe winter weather across the U.S. lingered at the tail end of Christmas weekend.

Airlines have canceled more than 17,000 U.S. flights since Wednesday, according to FlightAware, as storms brought snow, ice, high winds and bitter cold around the country, derailing air travel from coast to coast. Those conditions slowed down ground crews as they faced severe conditions at airports.

Carriers are likely to detail the costs of the disruptions when they report results next month, if not earlier.

Southwest Airlines was especially hit hard by the winter storms over the holiday travel period, along with other issues including unexpected fog in San Diego and staffing shortages at a fuel vendor in Denver, the carrier’s chief operating officer told staff.

Southwest had been canceling many flights proactively in an effort to stabilize its operation, COO Andrew Watterson said. From Wednesday through Saturday, about a quarter of Southwest’s flights were canceled, and two-thirds were delayed, according to FlightAware data.

The airline apologized to employees for the chaos, which left many struggling to get a hold of crew scheduling services, making it harder to get reassignments or make other changes, or get hotel rooms. Southwest also offered flight attendants working over the holiday extra pay.

“Part of what we’re suffering is a lack of tools,” Southwest CEO Bob Jordan said in a message to staff on Sunday. “We’ve talked an awful lot about modernizing the operation, and the need to do that. And Crew Scheduling is one of the places that we need to invest in. We need to be able to produce solutions faster.”

Airlines often cancel flights proactively during bad weather to avoid having planes, crews and customers out of place, problems that can make recovery from a storm more difficult.

Carriers also planned smaller schedules for Christmas Eve and Christmas Day compared with the days leading up to the holidays, making it harder for them to rebook travelers on other flights, and bookings had spiked.

Passengers check in at the Delta counter at Detroit Metro Airport in Romulus, Michigan, on December 22, 2022. 

Jeff Kowalsky | AFP | Getty Images

On Monday, more than 1,700 flights were canceled and 2,200 more were delayed, down from nearly 3,200 canceled flights and 7,700 delayed U.S. flights on Sunday.

Delta Air Lines, American Airlines, United Airlines, JetBlue Airways and Alaska Airlines were among the other carriers affected by the weather.

An American Airlines spokeswoman said the “vast majority of our customers affected by cancellations were able to be reaccommodated.”

Delta is “seeing steady recovery in our operations, and expect the improvements to continue over the next several hours,” a spokesman said Monday.

Passengers also faced delayed luggage, however.

Bill Weaver, 41, said he, his wife and five children drove from Wichita, Kansas to Dallas Fort Worth International Airport for a Friday flight to Cancun after their connecting flight into the American Airlines hub was canceled. The American Airlines flight to Cancun arrived on time but their luggage didn’t get to in Cancun until Monday, and hadn’t made it to their hotel by mid-morning, so they had to spend hundreds of dollars to buy clothing and other essentials at their hotel.

Weaver, who works in software sales, said he used to travel frequently.

“I’m used to missing bags and things happen but this is by far the worst I’ve ever seen,” he said.

Extreme cold and high winds slowed ground operations at dozens of airports. More than half of U.S.-based airlines’ flights arrived late from Thursday through Saturday, with delays averaging 81 minutes, according to FlightAware.

“Temperatures have fallen so low that our equipment and infrastructure have been impacted, from frozen lav systems and fuel hoses to broken tow bars,” said United Airlines message to pilots on Saturday. “Pilots have encountered frozen locks when trying to re-enter the jet bridge after conducting walk arounds.”

The FAA said it had to evacuate its tower at United hub Newark Liberty International Airport in New Jersey because of a leak on Saturday.

JetBlue, meantime, offered flight attendants triple pay to pick up trips on Christmas Eve due to staffing shortages.

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Carvana, MongoDB, TripAdvisor, Toll Brothers and more

A mascot of TripAdvisor is seen at its display at a trade fair.

Axel Schmidt | Reuters

Check out the companies making headlines in midday trading.

Carvana — Shares of the online car dealership fell more than 32% after Carvana’s largest creditors signed an agreement to negotiate together with the company. Bankruptcy concerns around Carvana have grown since the company reported disappointing third-quarter results last month. The pact between the creditors was first reported by Bloomberg.

MongoDB — The database platform surged almost 22% following the company’s quarterly results. Mongo posted better-than-expected revenue for the most recent quarter and issued upbeat fourth-quarter revenue guidance, according to Refinitiv.

State Street Shares of the asset manager jumped more than 8% after the company announced a new buyback plan. The company said it now intends to buy back up to of $1.5 billion of its common stock in the fourth quarter of 2022, $500 million more than the amount announced previously.

Online travel — Online travel stocks dropped after Wolfe Research downgraded the sector to market underweight from market weight, citing trouble ahead on the likelihood of a recession. The firm named a worse outlook for names such as Booking Holdings, Airbnb, TripAdvisor and Expedia. Shares of TripAdvisor and Expedia were down more than 6%. Booking Holdings fell more than 4%, and Airbnb shed 3%.

Stitch Fix — Shares gained 3%, bouncing back from an earlier dip during pre-market trading. On Tuesday, the company posted quarterly results that fell short of analysts’ expectations, according to FactSet. Stitch Fix also trimmed its full-year forecast.

Toll Brothers — Shares of the luxury homebuilder rose 7% after the company reported quarterly results. Toll Brothers posted home sales revenue that was better than Wall Street expectations, according to Refinitiv.

Dave & Buster’s Entertainment Dave and Buster’s stock shed more than 4% despite the company posting solid quarterly revenue on Tuesday. The entertainment company also provided an update on the fourth quarter, noting that through the first five weeks of the period, pro forma combined walk-in comparable store sales declined 2.4% versus the comparable period in 2021. However, those sales have increased 15.7% over the same period in 2019.

SolarEdge Technologies — The solar stock gained 3.6% after Bank of America upgraded it to a buy from neutral. The firm said the stock could gain more than 20% as its outlook improved.

Campbell Soup — Shares rose more than 5% after Campbell Soup topped forecasts on the top and bottom lines in its latest earnings report. The food producer cited “inflation-driven pricing, brand strength and continued supply recovery” for its recent results.

Chinese tech stocks — Shares of U.S. listed China stocks declined even as Beijing announced it will lift some Covid restrictions. JD.com and Baidu were each lower by more than 2%.

Airlines — Airline stocks fell as a group during midday trading. Shares of Southwest Airlines declined nearly 4%, while American Airlines slid 4.3%. Shares of Delta Air Lines, Alaska Air Group and United Airlines each slipped more than 3%.

Lowe’s Companies — Shares added more than 3% after Lowe’s affirmed its full-year guidance, and announced a new $15 billion share repurchase program. The home improvement retailer is hosting its annual analyst and investor conference on Wednesday.

— CNBC’s Alex Harring, Yun Li, Tanaya Macheel, Jesse Pound and Samantha Subin contributed reporting

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Delta gets closer to labor deal with pilots, union says

Pilots talk after exiting a Delta Airlines flight at the Ronald Reagan National Airport on July 22, 2020 in Arlington, Virginia.

Michael A. McCoy | Getty Images

Delta Air Lines is getting closer to a labor deal with pilots, their union said, marking a big improvement in a relationship that turned icy during years-long negotiations.

A preliminary deal this year would clear a major hurdle for Delta. Other carriers, including rivals United and American have also failed to reach new labor agreements. Contract talks were derailed during the pandemic as travel demand plunged and carriers booked record losses.

Airlines are now profitable again but negotiations have remained difficult throughout the industry. Delta, American, United, FedEx and Southwest pilots have picketed in recent months to demand better pay and schedules. Passenger airline pilots complained about poor quality of life from frequent flight changes and grueling schedules.

“While it is unclear exactly what the catalyst was for management’s movement toward our asks this past week, it was decisively the most productive week of negotiations” since talks opened more than three years ago, the Air Line Pilots Association said in a memo to Delta aviators on Monday.

Last month, Delta pilots voted overwhelmingly to authorize a potential strike if contract talks don’t lead to an agreement.

Some major issues are still pending, like compensation and retirement packages, the union said, but it was upbeat.

The union said it is “entirely possible” that a full agreement in principle may be reached at an upcoming session. But it said that will require management “to continue to show the motivation that resulted in progress this past week.”

Delta declined to comment.

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How JetBlue’s takeover of Spirit could change air travel

Passengers wait in line at the Spirit Airlines check-in counter at Orlando International Airport.

Paul Hennessy | LightRocket | Getty Images

Spirit Airlines relented this week and agreed to sell itself to JetBlue Airways for $3.8 billion, hours after breaking off a merger agreement with Frontier Airlines that failed to win enough shareholder support.

The new deal would mean big changes for travelers if it passes regulatory hurdles.

JetBlue has earned a reputation for passenger comforts like relatively generous legroom, seatback screens, live television, free Wi-Fi, and complimentary snacks like Cheez-Its and Stellar vegan butter pretzel braids. It also offers business class, with lie-flat seats.

Spirit, by contrast, has become a punchline for its bare-bones service. The cabins in its bright yellow planes are more cramped, and passengers have to pay extra for “optional services” like carry-on luggage and getting to pick a seat.

“It’s historic. This is the first time anyone wanted Spirit Airlines,” quipped “The Late Show” host Stephen Colbert about the deal on Thursday.

Still, Spirit has expanded rapidly and profitably by offering cheap tickets to vacation hotspots that can sometimes run less than a trip to the movies or a few burgers. The airline’s “Big Front Seat,” however, does offer 36 inches of legroom for a surcharge of up to $250.

As the two distinct airlines push ahead with their plans to combine, here’s what passengers can expect:

What are JetBlue’s plans for Spirit?

JetBlue wants to get bigger, and Spirit has the planes and pilots to help it do that. The New York-based carrier plans to retrofit Spirit’s planes in JetBlue’s style, ripping out the packed-in seats for a roomier layout with more amenities.

Combined, the airlines would become the country’s fifth-largest carrier, behind American, Delta, United and Southwest. Both have a big presence in Florida and each has expanded into Central and South America as well as the Caribbean in recent years. JetBlue last year started flying to London.

The two carriers will continue to operate as separate airlines until after the deal closes, which is subject to regulatory approval. Afterward, passengers might be confused if they’re flying in Spirit planes that haven’t been retrofitted yet.

JetBlue has some experience with such situations through its alliance with American in the Northeast, which allows the carriers to sell seats on each others’ planes. Last year, JetBlue revamped its website to better highlight the differences in onboard features like business class seats or free Wi-Fi.

Despite comedians’ digs, Spirit has improved its reliability in recent years — and is faring better than JetBlue by some measures.

JetBlue came in last among 10 airlines in on-time arrivals this year through May, while Spirit ranked seventh, according to the Transportation Department’s latest available data.

So far this year, a third of JetBlue’s flights were delayed and 4% have been canceled, according to flight tracker FlightAware. By comparison, slightly more than a quarter of Spirit’s flights have arrived late and 2.7% have been canceled.

JetBlue’s CEO Robin Hayes says improving reliability is a priority. The carrier has scaled back growth plans, saying it did not want to overextend its crews and other resources.

“A bigger JetBlue that is late is not a better JetBlue,” said Henry Harteveldt, a former airline executive and founder of Atmosphere Research Group, a travel-industry consulting firm.

Is this the end of cheap fares?

The Biden administration has vowed to take a tough stance on both consolidation and inflation, so the disappearance of an ultra low-cost airline could be a tough sell.

“Spirit might not be an elegant experience, but they are cheap,” said William Kovacic, a professor at the George Washington School of Law and a former chair of the Federal Trade Commission. “If they disappear as an independent enterprise … is that going to remove a source of downward pressure on price?”

But JetBlue’s Hayes says the airline needs to grow quickly and better compete with big airlines that control more than three-quarters of the U.S. market. Hayes argues a bigger JetBlue would mean more relatively lower fares to more destinations.

Like some of the airline giants, JetBlue has already added certain low fares that mimic carriers like Spirit. Those tickets also don’t come with seat assignments or other perks that were once standard with a coach fare.

But JetBlue’s business model of offering more comforts costs more than Spirit’s, meaning it likely won’t offer as many of the rock bottom fares that Spirit does.

Frontier Airlines, meanwhile, is already saying it’s happy to take on a bigger share of the ultra-low-cost market after its Spirit deal fell apart. Shortly after the airlines announced the end of their agreement, Frontier projected it would grow 30% next year and started a fare sale with 1 million seats going for $19 apiece.

The airline will become the largest discount carrier in the U.S. if Spirit is ultimately acquired. Others include Allegiant and Sun Country.

“That just gives us a huge amount of breathing room for growth,” said Frontier CEO Barry Biffle. “That’s why this is such a windfall for our employees and our shareholders.”

When is this happening?

Not immediately. JetBlue and Spirit expect the deal won’t get regulatory approval until late 2023 or early 2024, then close in the first half of 2024.

Integrating airlines is a lengthy and costly process. For example, United and Continental flight attendants didn’t even fly together until eight years after those airlines merged in 2010.

Retrofitting planes can take years too, and JetBlue wouldn’t be able to start that process with Spirit’s fleet until at least 2025. But the airline notes it recently outfitted more than 100 of its Airbus planes with new interiors.

“We’ve got a lot of recent experience in how to do it,” said Hayes.

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JetBlue agrees to buy Spirit in $3.8 billion deal to create 5th-largest U.S. airline

LaGuardia International Airport Terminal A for JetBlue and Spirit Airlines in New York.

Leslie Josephs | CNBC

JetBlue Airways reached a deal to buy Spirit Airlines, hours after the discount carrier scrapped plans to merge with Frontier Airlines.

JetBlue said it will pay $33.50 a share in cash for Spirit in a $3.8 billion deal.

A JetBlue acquisition of Spirit would create the country’s fifth-largest carrier, and if approved by regulators, would leave Frontier as the largest discount carrier in the U.S.

JetBlue’s surprise, all-cash bid for Spirit in April had thrown Spirit’s plan to combine with fellow discounter Frontier into question. For months, Frontier and JetBlue competed for Spirit, each sweetening their offers, until the original merger plan fell apart earlier Wednesday, clearing the way for JetBlue.

Spirit said it planned to continue talks to sell itself to JetBlue after ending the Frontier agreement.

JetBlue executives have argued for months that buying Miramar, Florida-based Spirit would help it compete with large carriers like American, Delta, United and Southwest, which control most of the U.S. market, and fast-track its growth by giving it access to more Airbus jetliners and pilots, both of which are in short supply.

New York-based JetBlue wants to refurbish Spirit’s planes in JetBlue style, featuring seatback screens and more legroom.

Spirit previously rebuffed JetBlue’s bids and said such a deal wasn’t likely to be approved by regulators, in part because JetBlue’s alliance with American, which the Justice Department sued to block last year.

The deal faces a high hurdle for regulatory approval.

Spirit shares were up more than 4% in premarket trading after the deal was announced, while JetBlue was up 0.5%.

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United Airlines pilots to get raises of more than 14% in new contract

Boeing 777ER United Airlines. Aircraft to Fiumicino Leonardo da Vinci Airport.

Massimo Insabato | Mondadori Portfolio | Getty Images

The union representing United Airlines pilots has approved a tentative deal that would give the aviators pay raises of more than 14%, making it the first major U.S. carrier to reach a deal since the start of the Covid-19 pandemic and setting the bar for the rest of the industry.

The agreement comes as the airline and others grapple with a shortage of pilots, which some carriers say have forced them to trim flight schedules.

Under the agreement approved Friday, pilots would get more than 14.5% in pay increases within 18 months, according to the Air Line Pilots Association, which represents about 14,000 United pilots. The two-year agreement also includes eight weeks of paid maternity leave, a first for the carrier’s pilots. United said women comprise about 7% of its pilot ranks.

The agreement sets the tone for negotiations between unions and other large U.S. carriers, including Delta Air Lines, American Airlines and Southwest Airlines, as labor groups seek quality-of-life improvements after two years of the pandemic. Some pilots say airlines have created grueling schedules to capitalize on a rebound in travel that has left them fatigued, and some have recently picketed to protest conditions.

Flight attendants and other work groups at major carriers are also in contract talks.

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