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Aerospace-related stocks have enjoyed investors' favor so far this year. iShares DJ Transportation Average ETF (NYSEARCA:IYT) has rallied 13%, while the S&P 500 has rallied only 9%. However, the ETF has declined by 6% in the last two days due to a worse-than-expected performance in March from Delta Air Lines (NYSE:DAL). The traffic report has dragged other major and regional airlines. For example, the price-per-share of United Continental Airlines (NYSE:UAL) declined by 10%, Southwest Airlines (NYSE:LUV) declined by 8%, and Alaska Airlines (NYSE:ALK) declined by 11%, Figure 1. However, Alaska Airlines, a regional airline that has received little attention, released its March traffic report two days after Delta's. A comparison between the reports should provide an overall picture on the performance of the airlines for the first quarter of 2013.

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Figure 1. Performance of UAL (green), LUV (yellow), ALK, (red), DAL (blue).

According to Delta Air Lines March traffic report, the company oversaw a decline in "traffic results" for the first quarter on a year-over-year basis. Its Revenue Passenger Mile (RPM) decreased by 0.6% from $43.3 billion in 2012 to $43.0 billion in 2013 on a year-over-year basis for the first quarter. The largest decline in RPM came from regional flights, which decreased by 10% from $5.6 billion to $5.0 billion. On a monthly-traffic basis, the RPM increased by a modest 0.1% for March. However, in the same month, the regional flights' RPM decreased by 10.4%. Yet, the company increased its load factor from 79.7% in the first quarter of 2012 to 81.2% in 2013 for the same period.

On the other hand, Alaska Airlines increased its revenue passenger mile. According to its March traffic report, the company increased its 1st Quarter RPM from $5.6 billion in 2012 to $6.2 billion in 2013, for a 9.5% increase. In addition, the passenger load did not change from 2012 to 2013 on a quarter-over-quarter basis. Further, the company increased its RPM for the March period, from $2.06 billion in 2012 to 2.27 billion in 2013, representing a 10.1% increase.

Overall, Alaska Airlines reported an increase of 10% in its RPM on a quarter-over-quarter basis, while Delta Air Lines suffered a decline in its RPM by 0.6%. The improvement in Alaska's RPM reflects a strong business model. For this reason, and others described here, Alaska Airlines would be a top choice for the long markets. Further, the recent pullback of Alaska Airlines' price-per-share may prove an excellent buying opportunity.

Source: Does Alaska Airlines Deserve This Pullback?