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The Zacks Analyst Blog Highlights: Alaska Airlines Group, Delta Airlines, JetBlue Airways, Southwest Airlines and Starbucks

Zacks Equity Research

For Immediate Release
 
Chicago, IL – May 16, 2014 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Alaska Airlines Group Inc. (ALK-Free Report), Delta Airlines Inc. (DAL-Free Report), JetBlue Airways Corp. (JBLU-Free Report), Southwest Airlines Co. (LUV-Free Report) and Starbucks Corporation (SBUX-Free Report).
 
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Here are highlights from Thursday’s Analyst Blog:

Alaskan Airlines Tops Satisfaction Survey

In line with airline customer satisfaction scaling new heights in North America, Alaska Airlines Group Inc. (ALK-Free Report) has topped the 2014 survey conducted by J.D. Power for the seventh consecutive year. The carrier has also earned the leading position in terms of quality and usability of its frequent flier program.

J.D. Power’s 2014 North America Airline Satisfaction Study takes into consideration the response of 11,300 customers, who have flown across the continent in different traditional airlines between March 2013 and March 2014. These customers have ranked airlines on the basis of seven standards, which include fees, reservations, check-ins, aircraft, boarding/baggage and flight crew.

Alaska Airlines scored 737 points on a 1,000 point scale, which is 20 points more than last year and 44 points ahead of the second place occupant, Delta Airlines Inc. (DAL-Free Report). Overall passenger satisfaction from traditional airlines stood at 712, marking a 17 point increase over last year despite more fees for baggage check. Among low cost carriers, JetBlue Airways Corp. (JBLU-Free Report) has emerged as the winner with 789 points followed by Southwest Airlines Co. (LUV-Free Report) and Canada’s WestJet.

Meanwhile, in the loyalty program satisfaction report, the carrier was ranked on the basis of the ease of redeeming miles, account maintenance, reward program terms, ease of earning miles, benefits available and customer service. The report was based on the responses of 3,800 loyalty program members surveyed in March 2014.

The SeaTac-based company has leveraged from a high number of partner carriers and 700 global destinations. Loyal customers can earn and redeem points when they fly with one of Alaska Airlines’ partners or when they stay at one of its partner hotels. Further, the members can use a convenient online calendar to buy one-way award tickets over the net and book multiple airlines in one reservation.

We believe the J.D. Power study reaffirms the confidence that customers hold in the Alaska Airlines brand name despite rising fees and uncomfortable sitting remaining a constant concern for the fliers. It will also help strengthen its goodwill against other traditional carriers in the region.

Alaska Airlines reported better-than-expected earnings of $1.28 per share in the first quarter of 2014 handily beating the Zacks Consensus Estimate of $1.20. The company also recently approved a $650 million share repurchase program to boost its shareholders’ wealth.

Alaska Air currently carries a Zacks Rank #1 (Strong Buy).

Starbucks to Expand in Latin America

Starbucks Corporation (SBUX-Free Report) recently announced its plans to expand its Latin American presence by opening stores in Colombia, Bolivia and Panama this year and early next. Currently, Starbucks operates more than 500 stores in Latin American countries like Chile, Mexico and Argentina.

As announced in August last year, Starbucks will open its first store in Colombia in the capital city of Bogota in mid-summer 2014. The coffee giant plans to open more cafés in the city as well as in other major Colombian cities over the next five years. The Colombian cafés will serve only locally-grown espresso and coffee.

The Colombian cafés will be run by a joint venture between Mexican restaurant company Alsea, and Colcafe, a subsidiary of Grupo Nutresa (a Colombian food processing company). Both Alsea and Colcafe have been Starbucks’ Latin American business partners for the past few years.

Alsea operates more than 500 Starbucks stores across Mexico, Argentina and Chile. Starbucks has been manufacturing/roasting coffee with Colcafe in Colombia since 2008 and also developed its popular VIA Ready Brew. Starbucks has now expanded its manufacturing agreement with Colcafe to roast espresso, drip and packaged coffee to be supplied at the new Colombian stores.

After Colombia, the company will enter the Bolivian market, with the first store planned to be opened later this year. The first Starbucks café will come up in the commercial center of Santa Cruz in partnership with Starbucks’ long-time business partner in the Andean region, Delosi. The partners plan to open another 10 cafés in Bolivia over the next several years.

In Panama, the first store is scheduled to be opened in early 2015 in partnership with Corporación de Franquicias Americanas (:CFA), Starbucks’ long-time Central American business partner. The partners plan to open more than 20 cafés in Panama over the next several years.

Starbucks carries a Zacks Rank #3 (Hold).

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