Alaska Air Group (ALK) Arm To Share Codes With Fiji Airways

In a customer-friendly move, Alaska Air Group Inc.’s (NYSE:ALK) subsidiary — Alaska Airlines — entered into a bilateral codeshare agreement with Fiji Airways — Fiji's national carrier. Per the deal, Fiji Airways can place its "FJ" code on Alaska Airlines operated flights from San Francisco to two popular destinations in the United States — Seattle and Portland.

Additionally, the contract provides extended and seamless connectivity between flights of the two carriers. In fact, by inking this deal, Alaska Airlines and Fiji Airways have expanded their partnership. Already the carriers have an existing frequent flyer partnership, under which members of Alaska Airlines' Mileage Plan scheme earn and redeem miles on "FJ" flight numbers.

Alaska Air Group, Inc. Price

Alaska Air Group, Inc. Price | Alaska Air Group, Inc. Quote

Notably, a codeshare deal allows sharing of flights, which implies that a passenger has the free will to avail any flight operated by either of the companies under the agreement, irrespective of the flight number.

The latest agreement should find favor among Alaska Airlines’ passengers and comes at a time when the carrier is struggling with capacity issues. In fact, Alaska Air Group is not the only carrier which is facing capacity relate issues. Evidently, shares of United Continental Holdings, Inc. (NYSE:UAL) have also declined significantly, even after reporting better-than-expected results in the fourth quarter on issues related to capacity.

On the fourth-quarter conference call, the company stated that it will continue to expand capacity in a bid to maintain market share at major airport hubs to deal with competition from discount carriers like Spirit Airlines, Inc. (NYSE:SAVE) . For 2018, United Continental’s capacity growth is projected between 4% and 6% year over year. The metric is anticipated to grow in 2019 as well as 2020.

Zacks Rank & Key Pick

Alaska Air Group has a Zacks Rank #3 (Hold). A better-ranked stock in the Zacks Airline industry is Southwest Airlines Co. (NYSE:LUV) carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Southwest Airlines have gained more than 10% in the last six months.

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