Although Alaska Airlines (ALK) is best known these days as one of Boeing’s (BA) collateral victims due to the “door plug” incident, it is still a functioning airline. And it has embarked on expansionary moves with a plan to buy Hawaiian Holdings (HA), whose review period has been extended. Shareholders did not take the news well, and shares lost nearly 2% on Wednesday afternoon.
Both Alaska Air and Hawaiian Holdings agreed to extend the Justice Department’s review deadline by one day, after already requesting a one-day extension last month. Originally, the review deadline was set to end on August 14, but after the first extension, it was pushed back to August 15. It is now August 16.
Both airlines said they have “…worked cooperatively with the Department of Justice and intend to continue to do so,” and the slight extension of the review period suggests the deal is likely to go through. And that could be great news for Alaska Airlines, which would then have control of over half the market for flights to Hawaii. Since Hawaii is a major tourist destination, this should give Alaska Airlines some momentum.
Innovation leader
Alaska Airlines isn’t exactly a leader in the airline industry, but it has often worked to put itself in a better position through innovation. It was the first airline to use GPS systems to control aircraft and was the first national carrier to offer online ticket sales back in 1995. To help with this, it recently invested in JetZero, the developer of the blended wing-body (BWB) aircraft. A BWB aircraft can fly higher, which reduces drag and improves fuel economy.
Meanwhile, the company is also working to improve the overall experience. It has introduced a new menu for first class passengers, effective August 28, featuring dishes designed by Mister Jiu chef Brandon Jew. The menu will include “breakfast congee” as well as lunch and dinner options such as “braised duck leg” and “roasted black cod.”
Is Alaska Airlines a good stock to buy now?
As for Wall Street, analysts have issued a consensus recommendation for ALK stock based on eight buy recommendations and one hold recommendation over the past three months, as shown in the chart below. After a 23.1% loss in the past year, ALK’s average price target of $53.22 per share implies an upside potential of 52.54%.
View more ALK analyst ratings
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