In the airline sector, the recent days have been nothing short of turbulent as investors grapple with the ripple effects of Boeing’s (NYSE:BA) quality control issues. Additionally, Spirit Airlines’ (NYSE:SAVE) merger with JetBlue (JBLU) continues to face obstacles, casting a pall over the industry. Southwest Airlines’ (NYSE:LUV) looming attendant strike and the release of the quarterly results from American Airlines Group (NASDAQ:AAL), United Airlines (NASDAQ:UAL), Southwest, and Alaska Air Group (NYSE:ALK) further added to the drama. On the bright side, the strong performance of these companies led to a 5% uptick in the U.S. Global Jets ETF (JET).

American Airlines emerged as the highest gainer this week, with its stock price witnessing an 11% surge from the previous week. The upbeat Q4 results, coupled with the fortuitous mix of Boeing and Airbus (EADSY, EADSF) aircraft, contributed to this positive trajectory. Despite Boeing’s woes with the Federal Aviation Administration, American Airlines’ diversified fleet worked in its favor, allowing most of its aircraft to remain operational.

However, while this diversity shields American from the FAA’s sanctions on Boeing, it comes with a cost, as maintaining a fleet of two different aircraft elevates maintenance expenses, leading to a higher-than-average cost per seat mile (CASM) of $17.78, a significant drawback compared to its industry peers.

Conversely, Southwest Airlines enjoys lower maintenance costs, with a CASM of $15.78. However, the airline is reevaluating its strategy of exclusively relying on the Boeing 737 fleet. It has chosen to scale back its MAX 737 deliveries and has omitted the MAX 7 model entirely from its 2024 fleet. Industry analysts caution that the potential jet shortage could compel the carrier to raise fares, a move that could further aggravate passengers already irked by Southwest’s flight disruptions.

The specter of a flight attendant strike looms over Southwest, with the Transport Workers Union Local 556 voting overwhelmingly in favor of a strike authorization this week. Should negotiations fail, the union has slated a “Worldwide Day of Action” for Feb. 13.

Alaska Air, another carrier heavily reliant on Boeing aircraft, has disclosed a projected cost of $150 million in 2024 to offset the impact of the grounding of most of its fleet. Originally forecasting a 3-5% capacity growth for the year, the company now anticipates growth at or below the lower end of this range, due to the grounding of the 737-9 MAX.

The aviation giant Boeing has had a fraught week following the repercussions of a door malfunction during an Alaska Air flight. In light of mounting concerns about the aircraft’s quality, the FAA has halted Boeing’s MAX production expansion, prompting BofA Securities to declare the predicament “untendable.” The bank has slashed its 2024 earnings projection for the company to a mere $0.25 from $2.70 and downgraded its rating to Neutral.

Boeing is poised for an earnings release and a conference call, closely watched by market speculators and experts.

Unfolding the saga of the problematic merger between JetBlue (JBLU) and Spirit Airlines, the former’s persisting, albeit unsuccessful, merger attempts with Spirit have faced stiff resistance from U.S. regulators, who harbor concerns that the union could erode affordable airfares for budget-conscious travelers.

After plummeting by 47% the previous week when a federal judge thwarted the merger, Spirit Airlines witnessed another steep decline on Friday when JetBlue intimated that the merger’s conditions are unlikely to be met by the Jan. 28 termination deadline. This development caused Spirit’s shares to nosedive by an additional 21%, while JetBlue saw a consecutive weekly uptick in its stock.

Looking ahead, Spirit is slated to release its Q4 results on Feb. 8, while JetBlue is set to announce its results on Jan. 30.

Year-to-date stock performances for U.S. airlines are as follows: Delta Air Lines (DAL) -0.63%, Spirit Airlines (SAVE) -55.41%, Southwest Airlines (LUV) +5.23%, United Airlines (UAL) +4.12%, Alaska Air Group (ALK) -5.89%, Hawaiian Holdings (HA) +3.38%, American Airlines (AAL) +11.79%, JetBlue (JBLU) -3.78%, Allegiant Travel (ALGT) -2.06%, Mesa Airlines (MESA) -1.99%, SkyWest (SKYW) +0.94%, Sun Country Airlines (SNCY) -10.17%, and Frontier Group (ULCC) -2.20%.