While these days, Alaska Airlines (ALK) might be best known as one of Boeing’s (BA) collateral victims thanks to the “door plug” incident, it is still a functioning airline. And it has made a move to expand, with a plan to buy Hawaiian Holdings (HA), which had its review period extended. Shareholders did not take the news well, and shares were down nearly 2% in Wednesday afternoon’s trading.
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Both Alaska Air and Hawaiian Holdings agreed to extend a Department of Justice review period one extra day, after allowing one extra day last month. Originally, the review period was to conclude on August 14, but after the first extension, that moved to August 15. Now, it is August 16.
Both carriers noted that they have been “…working cooperatively with the DOJ and expect to continue to do so,” and the modest increases in review period time suggest that the deal is likely to go through. And that could be great news for Alaska Airlines, which would then have over half the market for flights to Hawaii under its control. With Hawaii being a major tourist destination, that should put some life in Alaska Airlines’ bottom line.
Innovation Leader
Alaska Airlines is not exactly a leader in the airline space, but it has often worked to innovate itself into a better position. It was the first to use global positioning systems (GPS) to guide aircraft, and it was the first domestic carrier to offer online ticket sales way back in 1995. In aid of that, it’s recently put investment into JetZero, creator of the blended-wing-body (BWB) aircraft. A BWB aircraft can fly higher, which cuts wind resistance and improves fuel use.
Meanwhile, it is also working on improving the overall experience. It rolled out a new menu for first-class passengers, which will take effect on August 28 and feature cuisine designed by Mister Jiu chef Brandon Jew. The menu will include “breakfast congee,” as well as lunch and dinner options with “braised duck leg” and “roasted black cod,” among others.
Is Alaska Airlines a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on ALK stock based on eight Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 23.1% loss in its share price over the past year, the average ALK price target of $53.22 per share implies 52.54% upside potential.
