The Southwest (NYSE: LUV) plan to buy AirTran (NYSE: AAI) for a 60% premium has pushed up the stock prices of all the small carriers. JetBlue (NASDAQ: JBLU) was up less than 6% at $6.29, which is a disappointment because Barron’s did a positive story on the company. Shares in Republic Airways (NASDAQ: RJET) were up 6% to $8.26.
The one company among the small airlines that rose near to its 52-week high in trading was Alaska Air (NYSE: ALK), which moved up 5% to $50.95.
Alaska Air is considered among the finest run carriers in America. It bested all other traditional airlines in recent JD Power customer service research. Alaska Air’s debt is a very modest $1.5 billion. In the June quarter, the company made $59 million on revenue of $976 million. These cornerstones of financial strength have contributed to the Alaska Air share price performance during the last year. The stock is up 80%. JetBlue shares are flat for the same period
One of the company’s great advantages is its strength in the Western US. This is concentrated from the company’s hub in Seattle, up the coast to Alaska and down the coast into Mexico. Alaska Air also serves Hawaii. It competes very little on the crowded routes that run toward the Midwest and up and down the East Coast, parts of the U.S. crowded by large airlines and aggressive competition for customers.
Alaska’s route system and financial strength make it a likely candidate for a buyout. If it gets the kind of premium AirTran did, the stock will move above $75.
Douglas A. McIntyre
Essential Tips for Investing: Sponsored
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.