In the recent past, two significant deals involving consolidation in the US domestic airline business were reported. A final agreement to buy Spirit Airlines, Inc. (NYSE:SAVE) for a cash consideration of $33.50 per share, or an aggregate equity value of $3.8 billion, was announced by JetBlue Airways Corporation (NASDAQ:JBLU) in July 2022. The transaction has been the subject of a federal court trial and is being closely examined by the U.S. Department of Justice. We anticipate hearing the verdict in the coming days.
On December 3, the airline sector saw the announcement of yet another significant merger and acquisition. Hawaiian Holdings, Inc. (NASDAQ:HA), the largest and most established airline in Hawaii, would be acquired by Alaska Air Group, Inc. (NYSE:ALK) in exchange for cash, with an estimated enterprise value of $1.9 billion.
With travel limitations causing severe demand destruction, the COVID-19 epidemic presented one of the worst times for the airline sector globally. Notwithstanding stormy seas, the sector has ultimately recovered from the pandemic’s loss of demand, with the most recent IATA data estimating that it is now about 107% of its pre-COVID level. The sector as a whole lost around $180 billion in total between 2020 and 2022, but with $896 billion in sales, it is expected to turn a $23.3 billion profit in 2023.
Travel demand is predicted to rise higher in 2024, according to the International Air Transport Association (IATA), with revenues expected to rise at a record 7.6% annual rate to $964 billion, 15% more than the pre-covid peak level in 2019. Numerous factors are anticipated to contribute to this expansion, including the increasing demand for travel and a notable increase in the number of flights estimated to be available in 2024—40.1 million—compared to 36.8 million this year.
Air Transport Services Group, Inc. (NASDAQ:ATSG) announced its third-quarter 2023 financial results on November 6. It brought in $523 million in total sales and $17 million in net profit. For the quarter, it produced a normalised EPS of $0.32, missing the average expectation by $0.17.
Seven billionaires held shares in Air Transport Services Group, Inc. (NASDAQ:ATSG) as of Q3 2023, with a total market value of $39 million. However, 19 hedge funds, who held $106 million worth of shares, were also among its stockholders.
Through its two main operational companies, Copa Airlines and Wingo, Copa Holdings, S.A. (NYSE:CPA), located in Panama City, offers airline passenger and cargo services across Latin America. In Colombia and other cities in the area, Wingo uses a low-cost business strategy, whereas Copa Airlines is based in the Republic of Panama.
Copa Holdings, S.A. (NYSE:CPA) announced its Q3 2023 financial results on November 15. Its net income climbed by 61% year over year to $187 million, while its sales grew by 7% to $868 million. Its $4.39 normalised EPS beat consensus projections by $0.57. A fresh $200 million share repurchase programme was also approved by the company’s board of directors.
Based in Chicago, Illinois Leading carrier of passengers and freight, United Airlines Holdings, Inc. (NYSE:UAL) serves destinations in North America as well as Asia, Europe, Africa, the Pacific, the Middle East, and Latin America. Along with the US Postal Service, it offers freight and mail services to commercial enterprises, freight forwarders, and logistic companies.
United Airlines Holdings, Inc. (NYSE:UAL) and the Houston Airport System announced on November 15 that they will be investing in United’s Terminal B Transformation Programme at George Bush Intercontinental Airport (IAH), the airline’s hub. The programme includes building 40 additional gates for both domestic and international travel; the airline is projected to invest $1.9 billion, while the City of Houston is slated to finance $624 of the project.
A final agreement to buy Spirit Airlines, Inc. (NYSE:SAVE) for a cash consideration of $33.50 per share, or an aggregate equity value of $3.8 billion, was announced by JetBlue Airways Corporation (NASDAQ:JBLU) in July 2022. Ever since, the business has been making excuses to appease the regulatory bodies. It has agreed to sell all of the target company’s assets at Boston Logan International Airport and Newark Liberty International Airport to Allegiant (NASDAQ:ALGT), and all of the target company’s holdings at New York’s LaGuardia Airport to Frontier Group assets, Inc. (NASDAQ:ULCC).