JetBlue Airways Corporation (NASDAQ: JBLU) has already come out and said that the company prefers or intends to operate alone. JetBlue has grown to serve more than 23 million customers annually, and at the end of 2009 it operated 151 aircraft, serve 60 cities and had revenues of $3.3 billion. The company now serves 61 cities with 650 daily flights. At $6.68, its 52-week trading range is $4.64 to $6.95 and shares were at $5.94 on September 24 before the Southwest-AirTran deal was announced.
US Airways Group, Inc. (NYSE: LCC) is a very mixed fleet with 11 different plane models in the mainline group and 9 different plane models in the express unit. The company has 3,100 flights per day to and from over 200 communities in the U.S.and abroad, employs more than 31,000 aviation professionals worldwide and is a member of the Star Alliance network (as is Continental). With its US Airways Express partners included, the airline serves approximately 80 million passengers. At the end of 2009 it was the fifth largest U.S. carrier measured by domestic revenue passenger miles and at the end of 2009 it operated 349 mainline jets and regional airline units and affiliates operated approximately 236 regional jets and 60 turboprops. At $9.29, its 52-week trading range is $2.82 to $11.40 and the stock was trading at $8.99 a week ago before the Southwest-AirTran deal was announced.
Delta Air Lines Inc. (NYSE: DAL) merged with Northwest Airlines back in 2008, so in theory the company should be a status-neutral play for now. Delta now controls close to three-quarters of the passenger traffic in the Hartsfield-Jackson Atlanta airport. Figures may now be different because of a hub change and because the company has been downsizing its fleet. The company site notes that Delta serves more than 160 million customers to 351 destinations in 64 countries. It also employs more than 75,000 employees and operates a mainline fleet of over 700 aircraft. At $11.83, Delta’s 52-week range is $6.78 to $14.94 and shares were at $11.70 a week ago before the Southwest-AirTran deal.
ExpressJet Holdings, Inc. (NYSE: XJT) and SkyWest, Inc. (NASDAQ: SKYW) have already been given Federal Trade Commission clearance for their pending merger. SkyWest currently serves a total of approximately 225 cities in the United States, Canada, Mexico and the Caribbean, with approximately 2,800 daily departures; ExpressJet Airlines serves 135 scheduled destinations in North America and the Caribbean with approximately 1,400 departures per day. ExpressJet is being acquired for $6.75 per share in cash.
We should have a new public airline coming soon as well, with a focus in the discount carrier sector. Spirit Airlines recently filed its IPO documents with the SEC. The company’s filing was for up to $300 million in stock to be sold, although that can change and the figure is just for filing purposes. Spirit plans to more than double its fleet of airplanes in the coming 5-year period.
The mergers here so far in the airline sector are going to create a consolidation of holdings inside the Claymore/NYSE Arca Airline (NYSE: FAA) as the ETF that tracks the airline sector as a whole. The ETF trades at $37.94 versus a 52-week range of $21.98 to $38.13 and shares were trading at $35.80 a week ago before the Southwest-AirTran deal was announced. Claymore recently changed names to Guggenheim Funds and the new name is Guggenheim Airline ETF under the same “FAA” ticker. Average volume here is still rather low at about 31,000 shares per day and the assets under management are listed on the site as being only $46.892 million.
JON C. OGG