Anybody Wanna Buy An Airline?

Wallstreetone-2

Taking a look at the sad state of affairs the airline sector finds itself in today, one can’t help but wonder if we’re getting to the point where it’s simply ridiculous not to assume that there is at least one, if not more mergers or other types of link-ups just around the corner.

Why?

Because airline stocks are cheap. And, as of today, getting even cheaper. And if airline stocks are getting cheaper, that means market caps are as well.

Glancing at the rundown from today’s trading — at this writing, shares of Southwest Airlines are hovering around $13.00 a share.

Shares of United Airlines? Down a hefty 10% to $36.65. That will put some of those spoils-of-bankruptcy options under water.

Then there is Mesa Air Group. The airline was told yesterday in U.S. Bankruptcy Judge Robert Faris’ courtroom that it has to post a $90 million bond, pending the result of the airline’s appeal of Faris’ recent ruling against the airline in the case involving Hawaiian Airlines.

Last week Faris had told Mesa that the bond could be as high as $98 million, but that was based on the assumption that the appeal would be heard in a U.S. Bankruptcy appellate court. As the case will now be heard in a Federal District Court, the waiting time before a decision in the appeal process will be closer to a year, rather than three.

Hence, the lower figure. However Faris also warned that the bond could be adjusted further, depending upon the result of the District Court’s ruling.

Not the news that shareholders of Mesa wanted to hear. Obviously. Shares here are now trading down about 12% on the day, with the airline’s shares currently trading around $3.45. Yes, $3.45.

At prices like this — I wonder if any of the other regional airline players could be taking a look at Mesa? I mean, consolidation is not necessarily a “major airlines only” possibility.

Delta Air Lines is having a miserable day as well, with shares here down 9% for the day, currently trading at 17.26 a share. Continental? Shares here are down 8% to $25.57.

Yikes.

Ticker: (CAL;NYSE), (DAL:NYSE), (MESA:NASDAQ), (UAUA:NASDAQ), (LUV:NYSE)

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