KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Airline stocks have been soaring this earnings season, with investors watching closely as Southwest (LUV) and American Airlines (AAL) report. These results will be key to confirming whether the airline sector's comeback has real lift—or is just turbulence ahead.
Sector Overview:
The U.S. Global Jets ETF is up ~10% in July, showing renewed optimism.
Still, airline stocks lag the broader S&P 500, which is up 7% YTD.
Delta (DAL) and United (UAL) already delivered strong earnings, boosting confidence. Now, all eyes are on LUV and AAL to validate the recovery narrative.
Southwest Airlines (LUV)
Stock YTD: +10% in 2025
Q2 Earnings:
EPS: $0.43 (missed estimate of $0.51)
Revenue: $7.2B (slightly below $7.3B est.)
Key Change: Charging for checked baggage (a historic shift after 54 years)
May cause market share loss in some cities
Expected to boost ancillary revenue and reduce costs
Upcoming Policy: Assigned seating begins Jan 2026
Outlook: No full-year guidance due to macro uncertainty; analysts expect FY EPS: $1.07
Investor Note: Despite the earnings miss, after-hours stock rose 1.5%, showing investor tolerance for short-term pain if long-term gains are visible.
American Airlines (AAL)
Stock YTD: -28% (one of the worst in the sector)
But up 15% in the past month
Q2 Expectations:
EPS: $0.78 expected
Company guidance: $0.50 to $1.00
No 2025 outlook due to earlier demand uncertainty
UBS: Raised price target to $12 (from $9) but still implies slight downside
Analyst rating: Neutral
Analyst view: “Stability has returned, but demand must stay strong to sustain gains.”
Investor Note: For AAL’s recovery to hold altitude, it must show demand resilience in the second half of the year.
Analyst Takeaway:
Momentum is back in airlines, but sustainability depends on guidance and demand clarity.
Southwest is adjusting its model for profitability, while American needs to prove that recent momentum isn’t a fluke.
Macro uncertainty and cost control remain risks across the board.
Bottom Line:Short-term enthusiasm is real, but Q2 results from LUV and AAL will set the tone for whether this rally is a liftoff or just another bounce. Stay tactical—especially around guidance and demand commentary.
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