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
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.