Zacks Industry Outlook Highlights: Delta Air Lines, Boeing, Embraer, United Continental Holdings and Ryanair Holdings PR Newswire CHICAGO, Aug. 8, 2013 CHICAGO, Aug. 8, 2013 /PRNewswire/ --Today, Zacks Equity Research discusses the U.S. Airlines, including Delta Air Lines (NYSE:DAL-Free Report), The Boeing Company (NYSE:BA-Free Report), Embraer SA (NYSE:ERJ-Free Report), United Continental Holdings Inc. (NYSE:UAL-Free Report) and Ryanair Holdings plc (Nasdaq:RYAAY-Free Report). (Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO) Industry: Airlines Link: http://www.zacks.com/commentary/28469/airline-industry-stock-outlook---aug-2013 If pricing remains stable despite an uncertain macroeconomic outlook, the carriers will likely experience better profitability. The Association projects fuel cost of $214 billion in 2013, accounting for 31% of the overall operating costs. Most of the air carriers at large are scrapping flights in many small and unprofitable airports in order to reduce their cost burden that has increased 55% over the period 2006–2013. The companies are also replacing old and depleted airplanes with new and upgraded ones. Though initially expensive, new and improved aircraft are more fuel efficient than the existing ones and will help in lowering operating and maintenance costs. Leading passenger carrier Delta Air Lines (NYSE:DAL-Free Report) disclosed plans to shrink operations at the Memphis, TN hub due to low financial gains. This initiative falls under Delta's strategy to trim its operating expenses and achieve the targeted $1 billion in cost savings over the next few years. Over the next 20 years, global airlines are expected to invest nearly $4 trillion to $5 trillion for fleet development. For this, the airlines are banking on top aircraft manufacturers such as The Boeing Company (NYSE: BA - Free Report ), Embraer SA (NYSE: ERJ - Free Report ) and Airbus. Over the long run, the carriers aim to replace their old narrow-body jets -- A320's/B757-200/300 -- with advanced narrow-body airplanes such as A320 Neo and the B737 Max, for better service and demand-supply equilibrium. In May, United Continental Holdings Inc. (NYSE: UAL - Free Report ) agreed to buy 30 Embraer 175 regional jets. The deal, estimated at about $4 billion, also has the option of 40 additional purchases. Additionally, the airline placed a purchase order for 35 jets with Airbus for an undisclosed amount. Per the agreement, Airbus will convert United's existing order of 25 A350-900s into A350-1000s as well as deliver 10 new A350-1000s starting 2018. Ryanair Holdings plc (Nasdaq:RYAAY-Free Report) inked a deal with Boeing to buy 175 new Next Generation 737-800 airplanes for approximately $15.6 billion. 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Zacks Industry Outlook Highlights: Delta Air Lines, Boeing, Embraer, United Continental Holdings and Ryanair Holdings
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