The video featured TikTok user Nat (@kozorae). “I want to talk about my most recent American Airlines experience, specifically regarding their policy or lack of policy regarding safety for passengers of all sizes,” she started the video. First, she made it clear she’s not fatphobic. “I want to preface this by saying I am not fatphobic nor do I glamorize obesity,” she added. “I think people can live or do whatever they want with their body as long as it doesn’t harm other people.”Next, the content creator painted the scene. She and her boyfriend had an 11-hour flight from Tokyo Narita Airport to LAX. When Nat and her boyfriend boarded the airplane, they noticed a plus-size passenger in the aisle seat. “As we approached our seats, we noticed that there was an obese person sitting in the aisle,” she said. “It’s clear that their body was in the middle of the aisle. So, people had to squeeze by them and no matter how much they squeezed to the side, they were just touching their body.”In addition, others offered suggestions.
“If this has taught me one thing it’s to speak up immediately. Your comfort matters too,” one user commented.
“PLEASE make a claim with the airline for any medical bills related to the pain from this experience,” a second urged.
“There is no way I would have been able to tolerate that situation. You should write to American Airlines and explain your experience,” a third recommend.American Airlines’ AAL high operating expenses challenge its financial stability, straining the company’s bottom line. American Airlines is grappling with a host of intricate hurdles, a scenario we believe has significantly diminished its attractiveness as an investment opportunity.
Let’s delve deeper.
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for the June quarter earnings has been revised 17% downward in the past 90 days. For the current year, the consensus mark for earnings has moved 27.4% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.Image Source: Zacks Investment Research
Bearish Industry Rank: The industry to which AAL belongs currently has a Zacks Industry Rank of 186 (out of 250). Such an unfavorable rank places it in the bottom 26% of Zacks Industries.Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.Other Headwinds: The northward movement in operating expenses is hurting American Airlines’bottom line, challenging its financial stability. In the first quarter of 2024, total operating expenses rose by 7% year over year to $12.6 billion. The surge in operating expenses was primarily caused by an increase in labor costs and fuel expenses. Wages and benefits rose by 17.8% in the same time.
The ongoing production cuts adopted by major oil-producing nations and geopolitical tensions are pushing up fuel costs. Management expects fuel prices between $2.70 and $2.80 per gallon for the second quarter of 2024. Our estimate is currently pegged at $2.76 per gallon.
Moreover, weak liquidity further enhances the challenges to AAL’s financial health as the company exited the first quarter of 2024 with a current ratio (a measure of liquidity) of 0.58. A current ratio of less than 1 is not desirable as it implies that it has insufficient capital to pay off its short-term debt.SkyWest currently sports a Zacks Rank #1 (Strong Buy) and has an expected earnings growth rate of 787% for the current year. You can see the complete list of today’s Zacks #1 Rank stocks here.
SKYW has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 128%. Shares of SkyWest have jumped 101.7% in the past year.KEX has a Zacks Rank #2 (Buy) at present. Kirby has an expected earnings growth rate of 42.5% for the current year.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 10.3%. Shares of Kirby have climbed 59.8% in the past year.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.