Allegiant Travel Company
Informed investing requires in-depth research, but a single metric can often get you started. If you’re considering the high-flying world of airline stocks, there’s a metric that can provide quick comparison between the profitability and efficiency of different airlines.
Revenue per available seat miles, or RASM, is a valuable tool -- assuming you know how to use it. Here’s a quick-start guide to the basics -- and the tricks more »
The airline industry has been a disappointing one for investors since the March revenue numbers surfaced significantly below guidance. This has also led the Street to lower its estimates for airline stocks ahead of the earnings season.
If that wasn't enough, fuel prices have caused their share of damage - prices have been declining lately, thus leading to a drop in the revenue of airline players. What remains to be more »
Legendary investor Warren Buffett had warned us against investing in the airline business. He mentioned that the airline industry has brought negative aggregate value for investors since the time of the Wright Brothers. Billionaire Richard Branson also advised: “If you want to be a millionaire, start with a billion dollars and launch a new airline.”
Passenger transportation companies with growth strategies can make for attractive investments when demand is trending favorably. Under the auspices of a growing market for short-haul flights, or those between cities without major airports, there is potential for certain entities to thrive. Take a look at just some of the air transport providers that may benefit from such a situation. The primary risk is that of excess expansion, resulting in overcapacity more »
I have already covered large-cap airline stocks in one of my earlier posts. However, the small-cap stocks still need to be discussed briefly. I clearly mentioned in my previous post that both Barclays and Goldman Sachs are bullish on the airline sector for 2013. They give three reasons for this:
1) Industry revenue expectations remain low and leave room for disappointments, such as higher oil.
2) The industry capacity remains more »
The airline business is competitive, and the history of the industry is littered with the names of those who just couldn't stay in the air, like Braniff, Pan Am and Eastern.
One the other hand, a number of carriers, such as Southwest (NYSE: LUV), JetBlue (NASDAQ: JBLU) and Allegiant (NASDAQ: ALGT) have sprung up since the late '70s, competing on low fares. One carrier, Spirit (NASDAQ: SAVE), in particular more »
Ever since deregulation in the late '70s, one of the strongest areas of growth in the airline industry was in low-cost carriers. Southwest (NYSE: LUV) was one of the first, shuttling customers around the country in an all-economy cabin configuration and serving them only peanuts. JetBlue (NASDAQ: JBLU) made the experience better with in-flight TV screens and transcontinental flights and Spirit (NASDAQ: SAVE) charges bargain-basement fares and runs brash ad more »
The airline industry has been notoriously tricky investing terrain. For one, airlines are victims to volatile jet fuel costs, which have constantly plagued major airlines as United Airlines and Southwest Airlines until recently, when jet fuel prices have started to decline.
Moreover, low customer satisfaction due to problems such as flight delay, lost baggage, and additional costs has been a thorn in the side for several companies such as US more »
(This write-up is an edited and greatly-abbreviated pitch from the SumZero community.)
Spirit Airlines (NASDAQ: SAVE)
Recommended Action: LONG
Current Price: $18.22 Target Price: $30.00
Source: Hedge Fund. Minneapolis, MN.
Spirit Airlines is an ultra low cost airline with the lowest costs and best margins in the U.S. airline industry. The company provides extremely low priced flights to a combination of vacation destinations and secondary more »
JetBlue’s (NASDAQ: JBLU) introduction in early 1999 presented a huge industry shift when compared to the legacy operators like Delta Air Lines (NYSE: DAL) and United (NYSE: UAL). The airline’s low-cost approach was a natural progression from the “value” added strategy used by existing operators at the time (we paid for those meals, but did we really enjoy them?). At the same time, JBLU’s relatively stripped-down operations more »
I am serious, and don't call me Shirley! There is an old adage that goes something like this -- How do you make $1 million on an airline? Start with $1 billion and go from there. With the recent bankruptcy filing of American Airlines (NASDAQ: AAMRQ.PK) investors might be leery of airline stocks, and not without reason. Can you face some unpleasant facts? The slow economy and rising fuel more »