My Alaska Air

Alaska Air Group, Inc. ANNOUNCER: (NYSE:ALK)

This includes the telecommunications group AT&T (T), Biotech-Kingpin Celgene (CELG) and the German airline Alaska Air Group (ALK). The third and last part of this episode will deal with the polluted Alaska Air Group. An Alaska Air is a small doubt-mark. If this is the case, the forward-looking investments should focus on the perspective of the project group.

Virgin America seems to have prompted senior managers to loose some of their mo-jo. The Alaska Air Group is our last insured portfolio. A number of issues in the process of integrating mergers, increasing pilots' salaries following a controversial award, increasing cost of fuels. Virgin America is not a good target for acquisitions. Our managers are disappointed, and this was evident during the last telephone call.

In fact, Alaska Air is faced with a number of frontline issues. Virgin America had a powerful franchise and sales approach, but it was accompanied by significantly lower operational spreads than Alaska Air. In the first nine month of this year, Alaska's operational profit decreased to 18. Merging issues is that the amalgamation apparently triggered a fares war. What's more, the Commission

Alaska' s top executives, in particular, said that competitors' upward tariffs had fallen sharply. In the third quarter of 2017, RASM as a whole decreased by 6 per cent and the old Virgin America RASM decreased by 7 per cent. In the past, Alaska Air has succeeded in keeping cost under control. Meanwhile, Alaska will not have a unique OS on-line until January 2018. However, it is not until mid-2018 that most of the process will be complete.

So look, I know fusions are tough, but it just seems like what happened here really isn't what you' re used to, that the performance was slovenly, that there was poor controlling of it. Seems like the old kind of Alaska narrative is increasingly superfluous to investment history at the moment, and much of it refers to the expense..........

We are good at cost management. We' re actually good at revenue management, but we concentrated a little on the fusion. The earlier we get to the place where the fusion will take place and we run the carrier, which means we get closer to our employees, our budget and all that gear, the better.

Frankly, a trademark of ours when we go back, we like to have three-year budget goals, whether we divide them across each of our businesses or not, what they do with output and volumes and so on. In my opinion, the mechanism of a major fusion such as Alaska and Virgin America can certainly take 18 month.

It is not clear to this sponsor whether Alaska Air will be pursued to comply with this time limit. Whereas this is only another further ordinary course of action, it is fed into the story "Cost up, Margin down". Overall, the "split the baby" decision may be seen as beneficial to senior managers, but it will still raise overhead.

Chief Financial Officer Brandon Pedersen commented that the deal will set back margin by at least one and a half points. The $140 million mark would lead to an almost 3 point rise in pretax profit for Mexico and a reduction in pre-tax profit of more than 1.5 points. It is expected that the arbitration ruling will be made soon and in the fourth quarter, which is not covered by the fourth quarter costs guidance.

Alaska' s real referendum should costs a little more than 140 million dollars. Therefore, it is likely that it will take a slightly larger crack out of future input VAT spreads. There is a lack of local pilots in terms of quality assurance among managers. Senior staff were missing the signal. In fact, this also nourishes the aforementioned "We have no eye on the ball" fusion reintegration story.

Increasing gasoline expenses continue to weigh on the results. Compared to the previous year, economical fuels per gallon increased by 14% in the third quarter. In fact, this is an industrial issue, not just an Alaska Airlines issue, and the corporation is hedging off aviation fuels by purchasing forward calling. Nevertheless, it is just another building block for higher and lower profits. I' ll be adding my crystals globe as it is overcast, saying the petrol awards will tend towards the north and not towards the south. What is more, I'll be adding my crystals globe as it is overcast.

FAZIT: Alaska Airlines share is low priced according to historic times. Stocks now go for $63, and you can warrant fairly value estimated EPS, Cashflow, EBT or EBITDAR multipliers between $75 and $90. It is possible that a US carrier fusion after virginity has jeopardized the historic ALK share premium.

Neither are profit spreads necessary to revert to pre-merger level in order for ALK investments to benefit from a winning combination. It has a long history of being the operator of a solid carrier. Cost was kept low, the bottom line was solid, client services were excellent and profit/cash flows increased. Whilst margin may be lower, a good combination should lead to higher EBIT and EBITDA.

When you believe that "price follows profit and income ", then a lower profit is not a poor compromise for a higher EPS and operational income. As long as the bottom line continues to be strong and the business healthy, higher revenues and liquid funds should push equities higher. I' m planning to have the stocks regulated, then new operational figures and of course the coming quarter results.