The past week saw California-based low-cost carrier Virgin America (VA - Snapshot Report) churning out impressive financial numbers for the third quarter of 2015, with both earnings and revenues exceeding expectations.

On the traffic front, airline behemoth Delta Air Lines, Inc. (DAL - Analyst Report) reported impressive traffic data for October on the back of substantial international capacity reduction. However, Alaska Air Group (ALK - Analyst Report), unlike Delta, reported a decrease in its October load factor (% of seats filled with passengers), as capacity growth outpaced the rise in air traffic for the month.

On the price front, the NYSE ARCA Airline index climbed 2.7% to $93.75 over the past week on the back of weak oil prices.

(Read the last Airline Stock Roundup for Oct 28, 2015).

Recap of the Past Week’s Most Important Stories

1. As has been the case with carriers who have already reported their third quarter financial numbers, low fuel costs aided Virgin America’s quarterly results as well. The low-cost carrier, which went public in Nov 2014, reported earnings of $1.64 per share outpacing the Zacks Consensus Estimate by 7 cents.

Operating revenues came in at $410.9 million, surpassing the Zacks Consensus Estimate of $406 million and the year-ago figure by 1.3% (read more: Virgin America Q3 Earnings, Revenues Top on Low Fuel Cost).

2. Delta is living up to its forecast to reduce international capacity in the fourth quarter of 2015. On the third quarter conference call, the carrier stated that it will cut its international capacity in the fourth quarter by 4.5% with major reductions in Japan, Brazil, Russia, and the Middle East. A 4% cut in its international capacity to match the weak demand aided the carrier’s October traffic results.

Airline traffic, measured in revenue passenger miles, went up 3.5% year over year on a consolidated basis. Consolidated capacity or available seat miles (ASMs) declined 0.2% on the international capacity cuts. Load factor on a consolidated basis was up 310 basis points (bps) to 86.9%. The company registered a completion factor of 100%, with 92.1% of its flights on schedule.

Delta further stated that its passenger unit revenue (PRASM: a measure of unit revenue) for the month, on a consolidated basis, declined merely 1% year over year due to foreign exchange pressure. The marginal fall in PRASM was encouraging given that the metric has witnessed significant declines in the past few months.

Moreover, according to media reports, Delta, which will apparently exit the Airlines for America Trade Association next year, will stop flying to Dubai from Atlanta effective early next year, due to excessive competition from Middle East carriers.

3. Alaska Air Group, the parent company of Alaska Airlines, reported 12% growth in its October air traffic on a 12.9% rise in capacity. Load factor fell 70 bps to 82.3%, courtesy a greater rise in capacity compared with air traffic.

Moreover, Alaska Airlines, which is constantly making efforts to expand its operations, announced that it has started flying to Costa Rica. Costa Rica, a favorite tourist spot, is the first international destination for the carrier in 24 years (read more: Alaska Airlines Adds Routes, Targets International Expansion).

4. In keeping with its expansion initiatives, Dallas-based low-cost carrier Southwest Airlines (LUV - Analyst Report) stated that it will launch ten new non-stop routes in 2016.According to media reports, the carrier intends to stop operating certain flights like the ones between Dayton International Airport and Baltimore, Denver and Orlando (read more: Southwest Airlines Unveils 10 New Routes, Eyes Spring Travel).

Performance

The following table shows the price movement of the major airline players over the past week and during the last 6 months. 

With the third quarter earnings season almost over, it is not surprising that the price movement of major airline stocks remained muted over the past five trading days. Per the above chart, price movement of airline stocks in the last six months exhibited a mixed trend with Latin American carrier GOL Linhas (GOL - Analyst Report) declining the most in the period.

What's Next in the Airline Biz?

We expect October traffic updates from carriers like American Airlines Group (AAL - Analyst Report) in the coming days. Meanwhile, investor focus will also remain on the third quarter earnings report of Republic Airways Holdings Inc. (RJET - Snapshot Report).