Tuesday, July 12, 2016

Your fix to long TSA lines

Traveling by plane this summer? Better get to the airport at least three hours before your flight takes off. At least that’s what officials at O’Hare, Denver International, and many other airports recommend.

Who is to blame?

You can fault the TSA, the airlines, and the passengers who refuse to pay to check their luggage so they drag it through the security points with them. Solutions have been proposed, such as adding more TSA agents and eliminating baggage fees. But with terrorism on the rise … nothing is going to help much with this summer’s vacation.

Regardless of where you aim your misery while snaking along the roped pathway to get through security, there’s not a whole lot you can do about it. Yet there is a way turn this lemon into lemonade and make that long wait more bearable.

Let’s talk two airlines that I recently flew on a trip to San Jose, Costa Rica … 

Spirit Airlines (SAVE)

This south Florida based airline operates throughout North America, Central America, South America, and the Caribbean. Its ultra-low-cost business model offers low, unbundled fares that let you pay only for options you choose, such as bags, advance seat assignments, snacks, and drinks.

Over the past five years, annual EPS has grown 10% and revenue increased 22%.

First quarter 2016 results were solid: Revenue was $538 million, an increase of 9.5% from a year earlier. EPS was $1.01, up from $0.96 in 2015. 

"Our greatest competitive strength is our relative cost advantage.  We are focused on getting better all the time and doing so while maintaining, or improving upon, our relative cost advantage," said Ted Christie, Spirit's Chief Financial Officer.

Chart source: TD Ameritrade

Although Spirit leads the pack when it comes to customer gripes, the outlook for this super-discounter looks bright.

Its new CEO says he’s been focused on reliability since his first day on the job six months ago. On-time showing improved to 73.8% in April.

SAVE was recently upgraded to outperform from neutral at Credit Suisse. And Spirit was chosen by the DOT as one of the eight carriers that will be able to fly Cuba once the details are finalized. 

JetBlue (JBLU)

JetBlue Airways provides air transportation services for 93 destinations in 28 states in the U.S., DC, Puerto Rico, the U.S. Virgin Islands, and 19 countries in the Caribbean and Latin America.

Over the past five years, annual EPS has grown 44% and revenue increased 11%.

Revenue for the first quarter was $1.6 billion, up from $1.5 billion in 2015. Earnings were $0.59, up from $0.40 the prior year. 

Chart source: TD Ameritrade

“Our disciplined growth strategy continues to yield strong performance. We posted record first quarter results with higher margins than most of our competitors. These results would not have been possible without the amazing efforts of our 18,000 crewmembers. They truly are our biggest competitive advantage,” said Robin Hayes, JetBlue’s President and CEO.

JetBlue was also selected to service the U.S. to Cuba route.   


Air traffic is up 12% since 2011, fuel prices remain low, and consumers have more money to spend. With a record 231 million Americans taking to the skies this summer, airline stocks are poised to surge. So now could be a good time to pick up a few shares.

And knowing that you have the opportunity to profit from each passenger in those long airport security lines might make your wait a bit more bearable.  

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