Could the US Airways and American merger affect other airline stocks? Or is the sector set to cool after a hot year?
Over the weekend the Supreme Court denied a final stay of its resolution to allow two of the largest airlines in the US, American Airlines and US Airways (LCC), to complete a merger as of this morning. Together, the new airline will be the largest in the world.
This follows a decade-long trend of consolidation in the airline industry. The suit's plaintiffs alleged that the merger would stifle competition, and drive up prices and wait-times for travelers nationwide. But their pleas were unsuccessful and the merger will proceed, albeit slowly.
Airline mergers in particular can take a long time to execute, although customers will be able to redeem miles accrued with both companies starting in January.
The new airline follows in the footsteps of competitors United Continental (UAL), Delta Airlines (DAL), and Southwest Airlines (LUV), who have all completed mergers in the last six years. Together the four companies will control over 80% of the domestic airline market.
Airline stocks have performed incredibly well for the year, and yet still trade at relatively low valuations. Many analysts are still very bullish on the sector, where many stocks have already doubled in price since 2012.
They cite lower oil prices and increasing worldwide travel in an improving economy as two major factors for why these stocks could have even more room to grow. But is your portfolio ready to take off? We compiled a list of airline stocks to consider.
Click on the interactive chart to view market capitalization over time.
Will the new merger affect the airline industry? Use the list below to begin your analysis.
1. Delta Air Lines Inc. (DAL, Earnings, Analysts, Financials): Provides scheduled air transportation for passengers and cargo in the United States and internationally. Market cap at $24.34B, most recent closing price at $28.60.
3. Spirit Airlines, Inc. (SAVE, Earnings, Analysts, Financials): Provides passenger airline service primarily to leisure travelers and travelers visiting friends and relatives. Market cap at $3.24B, most recent closing price at $44.62.
4. United Continental Holdings, Inc. (UAL, Earnings, Analysts, Financials): Engages in the provision of passenger and cargo air transportation services. Market cap at $13.76B, most recent closing price at $38.54.
5. Southwest Airlines Co. (LUV, Earnings, Analysts, Financials): Operates as a passenger airline that provides scheduled air transportation in the United States. Market cap at $12.87B, most recent closing price at $18.31.
(List compiled by James Dennin. Market capitalizations sourced from Zacks Invesment Research, all other data sourced from Finviz.)
Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- Delta Air Lines Inc.(DAL, Chart, Download SEC Filings)
- US Airways Group, Inc.(LCC, Chart, Download SEC Filings)
- Spirit Airlines, Inc.(SAVE, Chart, Download SEC Filings)
- United Continental Holdings, Inc.(UAL, Chart, Download SEC Filings)
- Southwest Airlines Co.(LUV, Chart, Download SEC Filings)
- JetBlue Airways Corporation(JBLU, Chart, Download SEC Filings)
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