American Airlines shares jumped 7%. It will connect airplanes to Starlink

Shares of air carrier American Airlines rose by 7% in trading on Ma 26. The company announced that it will equip more than 500 airplanes with Starlink satellite internet system by Elon Musk's SpaceX.

American Airlines stock jumped 7% after the airline said it will install Starlink systems on about 500 Airbus planes, including A321neo jetliners. It will start connecting them starting next year. Back in March, the carrier was considering both Starlink and Amazon's Leo system as a supplier, CNBC reported.

At the same time, the air carrier has no plans to change Internet suppliers for Boeing airplanes, a representative of American told the channel. At present, Viasat and Panasonic solutions are used on these airplanes, CNBC notes.

In January, American launched free Wi-Fi for members of its loyalty program.

Major air carriers are actively modernizing the Internet on board in an attempt to attract more solvent passengers. Slow and expensive Wi-Fi systems are gradually being replaced by faster satellite services, CNBC points out. Delta, for example, said in March that it will use Amazon Leo on 500 planes starting in 2028. United, Southwest Airlines, AirFrance and British Airways have chosen Starlink.

SpaceX's division, which includes Starlink, brought in $11.39 billion last year, accounting for 61% of the company's total revenue, according to an IPO filing with regulators. Elon Musk's space giant is set to list on the Nasdaq exchange in June. The listing could be the largest in history.

Since the beginning of the year, American Airlines shares have fallen in price by 4%. By comparison, Delta's quotes rose by 12.7% over the same period, while United's value decreased by 6%.

The average target price of American's shares is $15, which means a potential upside of 8% from the last close of trading on Ma. 22. The Wall Street consensus is moderately positive: of the 26 analysts tracking the company, 12 recommend buying its securities, 12 take a wait-and-see stance and two advise selling. A month ago, analysts were more optimistic: the air carrier had 15 bullish ratings and only one bearish rating.

This article was AI-translated and verified by a human editor