Summer Stocks: Will Airline Stocks be Flying High?

Vacationers who wish to travel long distances still use trains and automobiles, but planes are still the preferred mode of travel. If the price of oil drops, the airlines’ profit margin can increase significantly, depending on if and how much fuel hedging they have done. Fortunately, there are a lot of United States based airlines to choose from.

AMR Corporation (AMR), which owns American Airlines, has flights all over North America, the Caribbean, Latin America, Europe, and Asia. The stock has a price to earnings ratio of 18, a price earnings to growth ratio of 0.41, and a price to sales ratio of 0.29.

Continental Airlines, Inc. (CAL) serves the United State, Europe, Canada, Mexico, Central America, South America, the Caribbean, Beijing, Delhi, Hong Kong, Tel Aviv, and Tokyo. The P/E is 8.9, the PEG is 0.58, and the P/S is 0.25.

Delta Air Lines Inc. [new shares] (DAL), which just came out of bankruptcy, has flights to 99 countries around the world. The forward P/E is 12.6, the PEG is 1.55, and the P/S is 0.22.

Northwest Airlines Corp. (NWA) hubs in Detroit, Minneapolis/St. Paul, Memphis, Tokyo, and Amsterdam, and serves 160 countries. The stock has a forward P/E of 10.2, a PEG of 1.36, and a PS of 0.16.

UAL Corporation (UAUA) owns United Air Lines, with hubs in Los Angeles, San Francisco, Denver, Chicago, and Washington, D.C. It flies to 157 different countries. The P/E is 53, the PEG is 0.98, and the P/S is 0.23.

US Airways Group, Inc. (LCC) has flights in the United States, Canada, the Caribbean, Latin America, and Europe. The P/E is 9, the PEG is 1.25, and the P/S is 0.23. Trivia Question: What does the LCC stock ticker symbol stand for?

AirTran Holdings Inc. (AAI) serves the eastern United States, from its hub in Atlanta, Georgia. The stock’s P/E is 40, the PEG is 1, and the P/S is 0.53.

Alaska Air Group Inc. (ALK) owns both Alaska Air and Horizon Air, and serves Alaska, the western U.S., Canada, and Mexico. The P/E is 70, the PEG is 0.77, and the P/S is 0.34.

Allegiant Travel Company (ALGT) provides scheduled flights moderate size locations to Las Vegas, Nevada and Orlando, Florida. The P/E is 50, the PEG is 1.34, and the P/S is 2.4.

ExpressJet Holdings Inc. (XJT) owns Continental Express and serves North America, Mexico, and the Caribbean. The P/E is 14.4, the PEG is 0.68, and the P/S is 0.19.

Frontier Airlines Holdings, Inc. (FRNT) is based in Denver, Colorado and flies across the U.S., and to Canada and Mexico. The stock has a forward P/E of 29. a PEG of 9.8 and a P/S of .18.

Great Lakes Aviation Ltd. (GLUX.OB) serves nine states. The P/E is 2.02 and the P/S is 0.37. This is an extremely low capitalization stock and should be considered extremely speculative.

Hawaiian Holdings Inc. (HA) owns Hawaiian Airlines, with flights between Hawaii and California, Nevada, Oregon, Washington, Alaska, Australia, American Samoa, and Tahiti. Earnings have been negative and the P/S is 0.20. This is another very low cap stock that should also be considered extremely speculative.

JetBlue Airways Corp. (JBLU) has flights to 21 states, Puerto Rico, Mexico, and the Caribbean. The stock has a high P/E of 221, a PEG of 3.67, and a P/s of 0.80.

MAIR Holdings Inc. (MAIR), which owns Big Sky Transportation, has flights to Montana, Colorado, Idaho, Illinois, Oregon, Wyoming, and Wisconsin. Earnings have been negative and the P/S is 5.74. Another low cap speculative stock.

Mesa Air Group Inc. (MESA) flies throughout the United States, Canada, Mexico, and the Bahamas. The P/E is 169, the PEG is 1.2, and the P/S is 0.16.

Midwest Air Group Inc. (MEH) has flights around the Midwest and to Toronto, Canada. The P/E is 16.5 and the P/s is 0.54.

Pinnacle Airlines Corp. (PNCL) provides airline capacity to Northwest Airlines, Continental, United, and US Airways. The P/E is 5.7 and the P/S is 0.52.

Republic Airways Holdings Inc. (RJET) has flights in the U.S., Canada, Mexico, and the U.S. Virgin Islands. The P/E is 11.3, a PEG of 0.78, and a P/S of 0.75.

SkyWest Inc. (SKYW) is a Utah based company which has flights to destinations in the United States, Canada, Mexico, and the Caribbean. The P/E is 11.9, a PEG of 0.86, and a P/S of 0.56. It even pays a small dividend of 0.4%.

Southwest Airlines Co. (LUV) is the only other dividend paying U.S. airline, with a yield of 1%. The stock has been paying dividends since 1980. The P/E is 22.8, the PEG is 1.57, and the P/S is 1.25.

Author owns LCC, AAI, XJT, GLUX.OB, HA, PNCL, and LUV, all of which have been owned for years. Many of the stocks on this list have very small caps under $300 million and therefore should be considered extremely speculative. These are not recommended as investments.