Alaska Air Rides on Higher Ticket Sales & Low Fuel Costs

By Zacks Investment ResearchStock MarketsSep 30, 2020 01:16AM ET

www.investing.com/analysis/alaska-air-rides-on-higher-ticket-sales--low-fuel-costs-200539469

Alaska Air Rides on Higher Ticket Sales & Low Fuel Costs

By Zacks Investment Research | Sep 30, 2020 01:16AM ET

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Alaska Air (NYSE:ALK) Group ALK is being aided by better ticket sales as air-travel demand, especially on the leisure front, picks up. Owing to this tailwind, the carrier's August cash burn of roughly $80 million was lower than the July reading.

Following the improvement in leisure-travel demand, Alaska Air decided to launch five routes for the winter travel period. Starting Dec 17, 2020, the airline will begin a daily nonstop service connecting Los Angeles, CA with Cancun, Mexico and Reno, NV. Additionally, the carrier will add nonstop daily flights between Palm Springs, CA and Boise, ID; Reno, NV as well as San Jose, CA on the same date.

The current scenario of moderate fuel costs is an added positive during these coronavirus-ravaged times. Evidently, fuel prices declined 19.5% year over year in the first half of 2020. Low fuel costs are also likely to be reflected in the bottom line when the company releases third-quarter results.

Alaska Air's strategic move to operate some of its passenger planes as cargo freighters is also praiseworthy. Moreover, the safety-oriented measures recently announced by the company are aimed at attracting passengers. In August, the carrier decided to make travel almost entirely touch-free in a bid to draw in more customers. Additionally, it decided to block the middle seats through Nov 30, 2020 to maintain physical distancing and ensure passenger safety. Also, for all new tickets purchased through Dec 31, 2020, passengers can enjoy the airline’s flexible travel policy.

Owing to these upsides, shares of Alaska Air have gained 2.7% in the past three months.

Zacks Rank & Other Stocks to Consider

Alaska Air currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Investors interested in the Zacks Transportation sector may also consider some other top-ranked stocks like Old Dominion Freight (NASDAQ:ODFL) Line ODFL, FedEx Corporation (NYSE:FDX) FDX and Atlas Air (NASDAQ:AAWW) Worldwide Holdings AAWW, which flaunt the same Zacks Rank as Alaska Air.

Shares of Old Dominion Freight, FedEx and Atlas (NYSE:ATCO) Air have gained more than 9%, 61% and 39% each over the past three months.

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FedEx Corporation (FDX): Free Stock Analysis Report

Old Dominion Freight Line, Inc. (ODFL): Free Stock Analysis Report

Alaska Air Group, Inc. (ALK): Free Stock Analysis Report

Atlas Air Worldwide Holdings (AAWW): Free Stock Analysis Report

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Alaska Air Rides on Higher Ticket Sales & Low Fuel Costs

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