Blackout already out of mind? Airline shares regain momentum

Stocks of airlines such as Southwest Airlines (New York Stock Exchange:LUV), Delta Airlines (New York Stock Exchange:DAL) and United Airlines (New York Stock Exchange: UAL) were among the trends, showing resilience and gaining momentum despite a nationwide outage on January 11.

Winter has not been kind to the US airline industry this season. After suffering massive chaos and cancellations in December due to winter storms, airline stocks returned to the spotlight on January 11. This time, a widespread outage at the Federal Aviation Administration (FAA) grounded all domestic flights. The FAA’s air mission reporting system failed, causing flights to be grounded across the country for about 4.5 hours.

However, airline shares proved to have strengthened after last year’s challenges, picking up momentum just after flights resumed. So much so, that the S&P Supercomposite Airline Industry Index rose as much as 1% by the end of the same day, led by United Airlines, Allegiant Travel Company (NASDAQ:ALGT), JetBlue (NASDAQ:JBLU), and Delta Airlines.

Here’s how some of the US airline stocks have fared:

south west

Southwest shares have gained 0.65% since the January 11 incident. Also, after the December mistake, the stock has shown strength since the start of the year, gaining around 15% so far in 2023. Yet the stock continues to lag behind its peers.

Are LUV shares a buy, according to analysts?

LUV shares have a Moderate Buy consensus rating on Wall Street based on seven Buys and four Holds. The $44.45 average price target indicates 20.23% upside potential over the next 12 months.

delta airlines

After trading lower on the day of the outage, DAL shares ended in the green. Since the interruption, the stock has remained relatively stable. Still, the incident hasn’t affected shares, and so far this year, shares have gained nearly 17% after a dismal performance in December.

Is Delta a buy or a sell?

The bulls run for Delta on Wall Street. The stock has a Strong Buy consensus rating, based on 10 Buys and one Hold. The $50.82 average price target also indicates 33.28% upside potential.

united airlines

United Airlines investors seem so excited about the recovery in travel demand that last week’s outage was left in the dark. The stock is up 8% since the incident. Plus, since the start of the year, the stock is up a remarkable 39%.

Is United Airlines a good stock to buy?

The stock has a Moderate Buy consensus rating based on seven Buys, two Holds and one Sell. UAL’s average price target of $56.20 implies 9.1% upside potential.