JetBlue Airways Corp. has offered to buy Spirit in an all-cash transaction for $33 a share, totaling $3.6 billion, the Wall Street Journal reported on Tuesday.
U.S. airline stocks have been in high demand recently as Delta Air Lines, United Airlines, and Southwest Airlines all raised their revenue expectations last month, maintaining previous statements that demand is robust coming out of a period of minimized travel due to the pandemic.
This is the second deal that Spirit has fielded in recent months. Frontier Group Holdings Inc. had announced a proposal to buy Spirit for $2.9 billion in cash and stock in February.
Relative to Wall Street analysts’ median 2025 forecasts, the Frontier bid values Spirit at less than 10 times earnings – below the pre-Covid average of 11.8 – whereas JetBlue would be paying more than 13 times earnings, according to the Wall Street Journal.
There are several ETFs to consider when looking to add exposure to the resounding travel industry. Three popular options are the ALPS Global Travel Beneficiaries ETF (JRNY), the SonicShares Airlines, Hotels, Cruis Lines ETF (TRYP), and the Defiance Hotel Airline and Cruise ETF (CRUZ).
JRNY is the most diversified of the three funds, investing in global equities spanning all market caps, offering access to a broad global travel ecosystem and other travel beneficiaries to provide holistic exposure to secular tailwinds in global travel.
JRNY tracks the S-Network Global Travel Index, which is designed to identify exchange-traded stocks of companies that are materially engaged in the global travel industry, according to ALPS.
Relevant companies include airlines, hotels, casinos, and cruise lines, companies that support those industries such as booking and rental agencies, and companies that stand to benefit from the overall global travel industry such as luxury retail and leisure activities, according to ALPS.
In addition to traditional travel-related businesses such as airlines, booking, and rental agencies, cruise lines, and hotels, JRNY’s artificial intelligence-driven screening process identifies additional companies that may benefit from the global travel ecosystem, providing a holistic and more diversified exposure to the secular tailwinds in global travel, according to ALPS.
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