On Sunday, December 3, Alaska Air (NYSE:ALK) announced that it would move forward with a deal to buy Hawaiian Airlines for $1.9 billion. The deal will see Alaska Air pay $18 per share in cash. It will also take on about $900 million of Hawaiian’s net debt. That brings the total equity value of the deal to $1 billion.
Some top commercial airlines have recovered quickly after the COVID-19 pandemic stirred havoc in the industry. Alaska Air has certainly been a success story in this regard. The company released its third quarter (Q3) fiscal 2023 earnings on October 19. Alaska Air reported GAAP net income of $139 million or $1.08 per share – up from $40 million or $0.31 per share in the third quarter of fiscal 2022. Meanwhile, the company posted $2.8 billion in operating revenues in the third quarter. It also generated $271 million in operating cash flow.
A completion rate refers to the percentage of scheduled arrivals that are not cancelled by a commercial airliner. In Q3 2023, Alaska Air reported that it achieved a total completion rate of 99.7%. That rate led all its peers. Better yet, the airline launched the Mobile Verify program in the third quarter. This allows passengers to securely verify their passports before arriving to the airport for international travel.
Shares of Alaska Air plunged to a 52-week low in late October and early November. However, it has enjoyed a steady climb upwards over the past month. Investors who are hungry for exposure to the burgeoning travel and leisure space might want to consider Alaska Air stock today.
