Airline stocks United Airlines and American Airlines report second-quarter financials this week, with analysts expecting booming profits for both air carriers. The reports follow Delta Air Lines' recent Q2 earnings beat and full-year profit guidance increase. UAL and AAL both edged up Monday.

Wall Street predicts quarterly earnings up more than 100% for both United and American Airlines. Delta's financial report on Thursday suggested airline performance was nearing pre-pandemic levels, as air carriers see strong demand for international and domestic air travel.

Delta reported international and domestic sales jumping 61% and 8%, respectively. Delta Chief Executive Ed Bastian declared "consumer demand for air travel remains robust."

Despite the strong financial performance, Delta shares dropped nearly 3% for the week as investors took profits after the earnings report. That marked the stock's first decline in nine weeks. Collectively, the 19 stocks in IBD's Transportation-Airline industry group also slipped for the week -- for only the second time in nine weeks.

Eoin Treacy's view

Demand for travel is still strong over the summer months but the ability of airlines to meet that demand is much more uncertain. Twice in the last month my family have experienced greater than 24 hour delays with American Airlines.

On both occasions there was a problem with the plane and the crew timed out before it was fixed. Rather than cancel the flights they delayed them until the next day. This happened on one domestic and one international flight, and suggests the firm is stretched too thin with crew and parts shortfalls.



All of the primary US airlines have failed to complete base formations. Even Delta is now pulling back from the upper side of its range. Southwest Airlines rallied in June to break a medium-term sequence of lower rally highs but will need to hold the breakout if recovery is to be given the benefit of the doubt.