Connect and get the inside scoop on Airline Companies

Welcome to Airline Pilot Forums - Connect and get the inside scoop on Airline Companies

If this is your first visit, be sure to check out the FAQ. Join our community today and start interacting with existing members. Registration is fast, simple and absolutely free.


User Tag List

Post Reply
 
Thread Tools Search this Thread
Old 01-05-2021, 02:44 PM   #1  
Gets Weekends Off
Thread Starter
 
docav8tor's Avatar
 
Joined APC: Apr 2019
Posts: 123
Default Ms. Becker's crystal ball

https://finance.yahoo.com/news/these...205740633.html

These 2 big airlines may shock everyone and merge in a bid to survive COVID-19 pandemic: analyst

Brian Sozzi Tue, January 5, 2021, 3:57 PM EST

The Big Four in the airline industry — long known as Delta (DAL), American Airlines (AAL), United Airlines (UAL) and Southwest Airlines (LUV) — may look a little different at some point this year as executives pull the trigger on mergers to consolidate costs as the slog from the depths of the pandemic stretches on.

“We’re expecting M&A to occur. You could see United Airlines buying JetBlue (JBLU). United is going back to JFK [airport] after an absence of a few years and it [JetBlue] has a big presence there,” long-time airline industry analyst Helane Becker of Cowen told Yahoo Finance Live.

Becker has Market perform ratings on both United and JetBlue.

Added Becker, “You can see Allegiant, Frontier and Spirit merge. Those three airlines have a 3% market share, maybe a little more now since they are so domestic. They would be a really terrific competitor to the Big Four because they are so low cost and their so domestic and leisure focused.” Becker rates Allegiant (ALGT) at Market perform and Spirit (SAVE) at Outperform.

Becker said, however, that depressed stock prices make doing a big airline deal now problematic. In other words, because of the toll the pandemic has had on air travel and airline cash flow, the stock prices are crazy low and unattractive in trying to fund a deal.

Shares of the Big Four airlines are down on average 36% over the past year, according to Yahoo Finance Premium data.

Moreover, most airlines lack the cash on the balance sheet to do a splashy deal. Cash is primarily being used to fund the losses being driven by the plunge in demand and high structural costs (see airplane maintenance, unionized employees, etc.). But to Becker’s point, some airline executives with the better balance sheets and stomachs of steel may be the reason they have no choice but to strike now on a target.
An American Airlines Boeing 737 Max jet plane is parked at a maintenance facility in Tulsa, Okla., Wednesday, Dec. 2, 2020. American Airlines took its long-grounded Boeing 737 Max jets out of storage, updating key flight-control software, and flying the planes in preparation for the first flights with paying passengers later this month. (AP Photo/LM Otero)By getting larger, any airline would be better able to spread out costs. And, it would also put itself in a position to be a market share consolidator in the post-pandemic recovery.

To be sure, the outlooks for the airlines this year remain horrible even as vaccines start to flow globally.

The International Air Transport Association (IATA) said last November the airline industry will lose $157 billion in 2020 and 2021. Previously, the IATA had forecast $100 billion in losses for the two-year period. But that number — which was eye-popping when released — may be conservative. Since that forecast, fresh pandemic-related lockdowns have swept the globe amid rising infections and deaths.

Concerns over new strains of the coronavirus have amplified the concerns on travel demand.

According to data from the TSA, December passenger demand declined 62.4% year-over-year, cited by Becker.

“We don’t think any of the big U.S. airlines are in danger of bankruptcy at this juncture,” Becker adds.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

What’s hot from Yahoo Finance:

Watch Yahoo Finance’s live programming on Verizon FIOS channel 604, Apple TV, Amazon Fire TV, Roku, Samsung TV, Pluto TV, and YouTube. Online catch Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, and reddit.
docav8tor is offline  
Old 01-05-2021, 10:06 PM   #2  
Gets Mon-Sun Off
 
TransWorld's Avatar
 
Joined APC: Aug 2016
Position: Up Front
Posts: 2,709
Default

“We don’t think any of the big U.S. airlines are in danger of bankruptcy at this juncture,” Becker adds.


Chapter 7 liquidation and going out of business, I agree. Chapter 11 reorganization and emerging, may happen to one or more carriers.
TransWorld is offline  
Old 01-06-2021, 07:49 AM   #3  
Gets Weekends Off
Thread Starter
 
docav8tor's Avatar
 
Joined APC: Apr 2019
Posts: 123
Default

Quote:
Originally Posted by TransWorld View Post
“We don’t think any of the big U.S. airlines are in danger of bankruptcy at this juncture,” Becker adds.


Chapter 7 liquidation and going out of business, I agree. Chapter 11 reorganization and emerging, may happen to one or more carriers.
I totally agree with you.
docav8tor is offline  
Old 01-06-2021, 09:53 AM   #4  
Gets Weekends Off
 
captive apple's Avatar
 
Joined APC: Jan 2019
Posts: 769
Default

Lots of airlines exited stage left in the Ch.11 process.
captive apple is offline  
 
 
 

 
Post Reply
 



Thread Tools Search this Thread
Search this Thread:

Advanced Search


Related Topics
Thread Thread Starter Forum Replies Last Post
time to flow to AA - quicker in future ? satpak77 Envoy Airlines 38 07-19-2017 02:51 PM
Eight Ball Ceremony is back?! I think fanaticalflyer United 55 10-24-2012 01:04 PM
Crystal Ball of Mergers and Acquisitions Jack Bauer Major 37 04-29-2012 05:44 AM
Look into your crystal ball... UnlimitedAkro Major 25 01-02-2008 12:59 PM
Crystal Ball pilotss Hiring News 4 07-27-2007 02:52 PM


All times are GMT -8. The time now is 11:02 AM.