Photo Credit: Tom Mascardo

Travel has always been a necessary luxury for individuals. Though there are different modes of transportation, all industry participants are often grouped together in the broad categories. We will take a look at two travel companies reporting 3Q2015 earnings before the market opens tomorrow.

American Airlines

The airline industry as a whole has been experiencing great treatment. Individuals are proving to pack up their bags and fill up seats and airline companies have been earnings solid profits. Oil prices are continuing to demonstrate volatility and companies are capitalizing on these trends. Given the general uptick, American Airlines (AAL) is also set to show investors some promising numbers. The Estimize consensus is calling for EPS of $2.71 and revenue of $10.8 billion. Wall Street, on the other hand, has concluded EPS of $2.72 and revenue of $10.72 billion.

 

The merger between American and US Airways (LCC) was finalized last week, and it appears that the former US Airways faithful have had no issue. Passenger boarding occurred without incident and the first major hurdle for the new American Airlines was overcome.

PRASM or passenger revenue per available seat mile is expected to stay low until early 2016. Falling numbers have hurt the AAL stock for quite a bit and could prove to be one of the most important metrics when the earnings report is released tomorrow. But lower fuel costs are expected to stay for 2016 and margins will remain strong.

 

In terms of fleet size, American Airlines is the largest by revenue, accumulating roughly $42 billion.

Royal Caribbean

Royal Caribbean (RCL) is an entirely different travel company. While the airline companies have benefited from increased air travel, cruise ship companies are profiting from record highs in Americans cruise-goers. The Estimize consensus is foreseeing EPS of $2.72 and revenue of $2.54 billion and Wall Street analysts are not far off, forecasting EPS of $2.70 and revenue of $2.53 billion.

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