Opening Salvo AS vs DL

[ImbracableCrunk]

I hear Alaska is going to unveil a marketing plan soon: "Alaska: We're not Delta."

Seriously though, I hope AS thinks that SEA-SLC turn was worth all this.

 

[Old School 737]

I hear Alaska is going to unveil a marketing plan soon: "Alaska: We're not Delta."

Seriously though, I hope AS thinks that SEA-SLC turn was worth all this.

I don't think that is what delta is worried/pissed about !! But ...on another note how much debt does delta have ... Yea they made money but ..

 

[BILL LUMBERG]

Debt?
Below 10B....going to be below 7B by end of fiscal 2014.

When all the capital investments are over (terminals, new interiors, refineries, lounges, tablets, airplanes) they'll be targeting the debt load and dividends.

Pretty soon there will be enough cash in the bank to weather the next downturn and the next PWA.

 

[General Lee]

I don't think that is what delta is worried/pissed about !! But ...on another note how much debt does delta have ... Yea they made money but ..

Here we go again. In 2008 DL had $17 Billion in debt, which is now below $10 Billion (which was the initial target to save $500 million per year in interest alone). The revenue generation has been so huge, that management has now set a new target for $7 billion. That is amazing. Even good ole Kramer on CNBC has been touting DL. I bet your management is watching too.


Bye Bye---General Lee

 

[Mea25000]

We have about a 13% cost savings over DAL with our mainline flying.. When they use an RJ which is really all they have committed its about twice that. RA is not happy with AS but he is going to get hammered on the West Coast fighting 181 seat aircraft with 76 seat RJ's.


Why Alaska Air Can't Stop Climbing
By Michael Lewis | More Articles | Save For Later
October 28, 2013 | Comments (0)

ALKAlaska Air G
CAPS Rating 2/5 Stars
$72.78 $0.58 (0.80%)

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Warren Buffett may tout airlines as a great way to torch your investment capital, but there are exceptions. One great performer recently is Alaska Air Group (NYSE: ALK ) . The regional player has been steadily expanding its route coverage while simultaneously bumping up passenger revenue per available seat mile, or PRASM, which is a key measure of unit profitability. In its just-ended quarter, the company again surpassed analyst expectations and provided further evidence that management's plans to steadily and profitably expand the business are effective, to say the least. Even better for investors, the stock still has plenty of room to run.

Quarter recap
For the fiscal third quarter, Alaska Air hauled in an adjusted profit of $157 million, or $2.21 per share. Included in the generally accepted accounting principles (nonadjusted) number was a $120 million noncash revenue item. The Seattle-based carrier beat analyst expectations of $2.14 per share and posted a nice gain over the prior year's $2.09 per share. Through the first nine months of the year, the airline has generated $425 million in free cash flow.

The company continues to pay down debt, most recently bringing its debt-to-market cap ratio down by 7%, to 47%. On a net debt basis, the company is essentially liability-free. Its return on invested capital held steady at roughly 13%. The carrier's pre-tax earnings margin was 18.4%. And although PRASM has been a great rallying point over several quarters, total PRASM remained flat this time because of increased competitive pressure in some core routes. The figure should trend positive over the long term.

In previous quarters, management had expressed some concern with its Hawaii flights not maintaining capacity. That problem has since been fixed.

An industry ratings service cited Alaska Air as the most on-time airline of any domestic carrier, the most fuel-efficient of any domestic carrier, and No. 1 in customer service. If it all sounds great -- it was. This past three-month period marked Alaska Air's best quarter in operational history, according to management. It's the 18th month in a row that the company achieved a positive bottom line -- a striking number for the ever-volatile airline industry.

How high will it fly?
All of the great news surrounding Alaska Air, with the exception of competitive encroachment, bodes well for the company going forward. With an immaculate balance sheet and strong cash flow, Alaska Air can easily grow its routes, buy new planes as needed (it bought eight in the past 12 months -- in cash), and still find some left over to give back to shareholders in the form of a dividend or buyback.

Perhaps more than anything else, management has proved to be expert capital allocators. This is crucial for any business, but particularly so in the tight-margin, ultracompetitive airline business.

At 11 times forward earnings, an EV/EBITDA of under five times, and a price/earnings-to-growth ratio of 0.89, this company looks to be one of the best investments in the space. Forget the legacy carriers and the media-friendly mergers-and-acquisitions activity; Alaska Air is a highflier for any portfolio.

 

[General Lee]

We have about a 13% cost savings over DAL with our mainline flying.. When they use an RJ which is really all they have committed its about twice that. RA is not happy with AS but he is going to get hammered on the West Coast fighting 181 seat aircraft with 76 seat RJ's.


Why Alaska Air Can't Stop Climbing
By Michael Lewis | More Articles | Save For Later
October 28, 2013 | Comments (0)

ALKAlaska Air G
CAPS Rating 2/5 Stars
$72.78 $0.58 (0.80%)

+ Watch ALK
on My Watchlist
Watch stocks you care about
The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...
Click Here Now
Warren Buffett may tout airlines as a great way to torch your investment capital, but there are exceptions. One great performer recently is Alaska Air Group (NYSE: ALK ) . The regional player has been steadily expanding its route coverage while simultaneously bumping up passenger revenue per available seat mile, or PRASM, which is a key measure of unit profitability. In its just-ended quarter, the company again surpassed analyst expectations and provided further evidence that management's plans to steadily and profitably expand the business are effective, to say the least. Even better for investors, the stock still has plenty of room to run.

Quarter recap
For the fiscal third quarter, Alaska Air hauled in an adjusted profit of $157 million, or $2.21 per share. Included in the generally accepted accounting principles (nonadjusted) number was a $120 million noncash revenue item. The Seattle-based carrier beat analyst expectations of $2.14 per share and posted a nice gain over the prior year's $2.09 per share. Through the first nine months of the year, the airline has generated $425 million in free cash flow.

The company continues to pay down debt, most recently bringing its debt-to-market cap ratio down by 7%, to 47%. On a net debt basis, the company is essentially liability-free. Its return on invested capital held steady at roughly 13%. The carrier's pre-tax earnings margin was 18.4%. And although PRASM has been a great rallying point over several quarters, total PRASM remained flat this time because of increased competitive pressure in some core routes. The figure should trend positive over the long term.

In previous quarters, management had expressed some concern with its Hawaii flights not maintaining capacity. That problem has since been fixed.

An industry ratings service cited Alaska Air as the most on-time airline of any domestic carrier, the most fuel-efficient of any domestic carrier, and No. 1 in customer service. If it all sounds great -- it was. This past three-month period marked Alaska Air's best quarter in operational history, according to management. It's the 18th month in a row that the company achieved a positive bottom line -- a striking number for the ever-volatile airline industry.

How high will it fly?
All of the great news surrounding Alaska Air, with the exception of competitive encroachment, bodes well for the company going forward. With an immaculate balance sheet and strong cash flow, Alaska Air can easily grow its routes, buy new planes as needed (it bought eight in the past 12 months -- in cash), and still find some left over to give back to shareholders in the form of a dividend or buyback.

Perhaps more than anything else, management has proved to be expert capital allocators. This is crucial for any business, but particularly so in the tight-margin, ultracompetitive airline business.

At 11 times forward earnings, an EV/EBITDA of under five times, and a price/earnings-to-growth ratio of 0.89, this company looks to be one of the best investments in the space. Forget the legacy carriers and the media-friendly mergers-and-acquisitions activity; Alaska Air is a highflier for any portfolio.

Kramer at CNBC put DL at the top of the list, even over AK, and spent a few minutes on why DL was the top. It's called revenue generation. The debt pay down is in full effect, and having a $1.37 billion QUARTER should mean something is going well. That also means they can afford to try new things, and that can't be good for the rest. But, if you're not concerned, maybe your management isn't either. Okay then.......


Bye Bye---General Lee

 

[BILL LUMBERG]

Easy GL...

We lost 2 BILLION (Dr. Evil's voice) in a quarter once. It can happen again.

 

[moochild11]

Ok general..we are all very concerned..happy now?

 

[moochild11]

I guess when us air American goes through you'll be running scared..being they'll be bigger and all

 

[Mea25000]

I didn't realize the great Kramer had spoken. With his track record I guess us Alaskan pilots should just pack it in. DAL is without question now the biggest, brightest, and best. There will be no questioning your utter domination from now on. I am so sorry I missed that lightning round.