Out Fox The $treet

Small-Cap Insight Historically, the airlines have been horrible operators and Hawaiian Holdings ( HA ) probably topped the list. In reality, the issue in paradise might have been a prime example of the industry issue times two. For a long time, it was cool to own an airline and probably double so to fly to the beautiful Hawaiian Islands. Even today in the midst of a dramatic turnaround, the airline lists receding industry capacity in Hawaii as a major benefit. The opposite was probably true of fellow West Coast competitor Alaska Air Group ( ALK ) that historically has the better operations. Did the lack of desire to fly to the cold confines of Alaska provide a natural competition eliminator that provided a significant advantage over any management skill? Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

At the end of last week, Alaska Air Group , ( NYSE: ALK     ) jumped on speculation that Delta Air Lines ( NYSE: DAL     ) was interested in buying the airline. Investors should not buy the stock based on these rumors; instead, the shares of Alaska are attractive based on the company's strong fundamentals and value proposition. While the stock popped due to the actions of typical momentum investors jumping in and hoping for a quick buck, the long-term investor should ignore the hype. After the regulatory issues surrounding the American Airlines Group merger, it appears highly unlikely that the regulators would allow another merger involving the three major legacy airlines consolidating the industry. Read the full article here . Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

The shocking announcement that the Department of Justice filed a lawsuit to block the merger of American Airlines and US Airways (NYSE: LCC ) caused most of the airlines to drop. While the blocking of the merger could have a significant impact on American Airlines, it could create opportunities for the smaller airlines to either be bought out in smaller consolidation deals or gain from the interruption and potential cutbacks at more » Disclosure: Long LCC. Please review the disclaimer page for more details. 

All of the benefits of consolidation undertaken by the major airlines to create three behemoths could unravel if new competitive threats enter the market. After decades of losses, new airlines entering the industry don’t appear as likely a threat as some of the established, more regional players aggressively expanding to fill the voids created by the mergers. Enter Spirit Airlines (NASDAQ: SAVE ) as possibly the biggest threat to the more » Disclosure: No positions mentioned. Please review the disclaimer page for more details.