The pandemic has crushed air travel demand, and there's very little that airlines can do about other than to reduce costs and run as efficiently as possible ahead of the eventual recovery - a situation that plays relatively well to Alaska Air's (ALK) strengths where cost control is concerned, though much of Alaska Air's efficiency is still tied to actually flying jets with passengers.
I liked Alaska Air back in August, arguing that this well-run carrier would make it through the downturn in better shape than most and would go into the recovery with a better, more profitable fleet. I still believe that. These shares have outperformed since my last article, rising more than 50% and beating peers (the U.S. Global Jets ETF (JETS)) by about 20% and specific rivals like Delta (DAL) and Southwest (LUV) by about 10% to 15%, while Spirit (SAVE) has done about 15% better.
I continue to like Alaska Air here and think it's worth buying/holding, but investors should note the likelihood of above-average volatility.
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