SkyWest, Inc. (SKYW), Delta Air Lines, Inc. (DAL): Can These Airline Stocks Lift Your Portfolio?

Two key airline industry metrics were also down. PRASM — passenger revenue per available seat mile — for the second quarter decreased 3.3% compared to the comparable quarter of 2012; and RASM — operating revenue per available seat mile — was down 3.1% year-over-year.

On a happier note, JetBlue Airways Corporation (NASDAQ:JBLU) ended the second quarter with a nice stockpile of about $867 million in unrestricted cash and short-term investments.

Most admirable profits

Delta Air Lines, Inc. (NYSE:DAL) is one of the largest airlines in the world, serving 160 million customers annually through flights to 327 destinations in 700 countries. Delta Air Lines, Inc. (NYSE:DAL) was named the world’s most admired airline in Fortune magazine’s rankings. The company was also one of the winners of the Workplace Excellence Award given by The Families and Work Institute and the Society for Human Resource Management. Do all of these good deeds translate into great profits?

Yes. The second quarter of 2013 was spectacular for Delta Air Lines, Inc. (NYSE:DAL) in terms of profitability, with net profit reaching a record $844 million, which was $258 million higher than the same quarter last year. What is particularly impressive about this is that the results came with the air-travel industry still in recovery mode. Delta said traffic increased only 0.5% for the quarter and PRASM was basically unchanged. It did release an update of results for July, which showed PRASM rising 3%.

This company churned out more than $1 billion in free cash flow this year through the end of June. It announced its intentions to return more than $1 billion to shareholders over the next three years through stock buybacks of $500 million and annual dividend payouts of $200 million.

What we learned

JetBlue Airways Corporation (NASDAQ:JBLU) gets points for innovation and trying to expand its customer base to upscale travelers. But let’s see if this brings in more of the high-margin business it is hoping for.  SkyWest, the regional carrier that was able to improve its profitability when industry conditions were still unsettled, gets my vote as a good stock to keep an eye on. But the winner has to be Delta. Terrific results being delivered by a great company. Just keep in mind Delta’s stock is up over 100% in the last year.

Brian Hill has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Can These Airline Stocks Lift Your Portfolio? originally appeared on is written by Brian Hill.

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