From Nasdaq: 2024-09-19 10:45:00

Alaska Air Group (ALK) completes its acquisition of Hawaiian Airlines for $1 billion, making it the fifth-largest U.S. airline by revenues. The deal was cleared by the Department of Transportation (DOT) with certain conditions, including protecting loyalty programs and maintaining key routes. ALK will now handle cargo transportation for Amazon (AMZN).

ALK raises Q3 earnings guidance on upbeat summer travel demand, with revenues expected to increase by 2%. The company has a Value Score of A and is trading at a discount compared to the industry. However, escalating labor costs are a concern, impacting the bottom line. The stock’s volatility may not be suitable for all investors.

Peter Ingram steps down as Hawaiian Airlines CEO, replaced by Joe Sprague from ALK. The carrier aims to obtain a single operating certificate from the FAA. Alaska Airlines and Hawaiian Airlines will operate as separate brands until then. ALK’s stock has gained double-digits in the past month, outperforming the industry.

While the acquisition of Hawaiian Airlines is a positive for ALK, rising labor costs and volatility are headwinds. Investors are advised to monitor developments closely before investing and those holding should stay put. ALK is currently ranked #3 (Hold) by Zacks. For more insights, download the 5 Stocks Set to Double report from Zacks Investment Research.



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