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Writer's pictureIshfaaq Peerally

Why I'm BUYING this AIRLINE STOCK


I looked at the airlines a few weeks and I said that I'm buying Alaska Air Group $ALK . The airlines already got a bailout from the US government. It is a good time to look again at these airlines, and especially at Alaska Airlines. Bailouts are never a good things for companies and especially for shareholders. This is not just free money that the government is giving away out of goodwill. They need to repay these, sometimes in terms of cash and sometimes equity. Each of the airlines got different deals. For American Airlines $AAL , the government has the option to buy 3% of the company. For Alaska Air Group, the government has the option to buy 0.6% of the company. Alaska Air Group got a $1 billion bailout to pay salaries. They are not allowed to repurchase shares and pay dividends until September 2021. The management cannot increase their compensation until 2022. These are reasonable. They are asking an additional loan from the government. The number one reason why I invested in Alaska Air Group is because of the great management. The CEO is an expert in the industry and took the decision to cut his salary to zero in this crisis. Whenever you're investing in a company, make sure that they have a great management. Alaska Air Group also has a great balance sheet with $1.5 billion in cash and cash equivalents and other marketable securities. Instead of buying back shares like their competitors, they were saving for a rainy day. They acquired Virgin America in 2016. Along with Southwest Airlines $LUV they are the only company with an investment grade credit rating. When things get back to normal, the business of Alaska Airlines will return to normal before competitors since they fly mostly in the US with little international exposure. For several consecutive years, Alaska Airlines has been rated the best airline in America. If customers are happy, it brings more revenues to the business, along with the great management and great balance sheet, Alaska Air Group has the formula for success. Watch the full video on YouTube and Subscribe: https://www.youtube.com/watch?v=_iqKNLF-eoM&list=UUPO3uUyoXSaFWG-Ldq1mqEQ Here's the full analysis of the airlines: https://ishfaaqpeerally.teachable.com/courses/662813/lectures/14996960

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