June 12--Alaska Air Group's board of directors announced Thursday it will double the number of its shares July 9.
Under the plan, existing shareholders in the SeaTac-based airline company will receive one additional share for every share they own on July 9. That will increase the airline holding company's total number of shares from the existing 68 million or so to more than 136 million.
The stock split will be the second in the airline company's history. It last split its stock in 2012. The extra stock distribution typically cuts the price of the existing stock by half.
Wall Street greeted the news less than enthusiastically. At midday Thursday, Alaska Air Group's stock had declined by some four percent.
Companies typically split their stocks to make shares more affordable to investors and to stimulate more buying activity.
In the last five years, Alaska Air Group's stock, taking into account the previous split, have increased to five times their beginning value.
In trading Thursday, Alaska Air Group's stock was hovering around $93 a share. The company's stock peaked earlier this year at nearly $101 a share.
While the air group's financial results have been stellar in recent years, some investors have become anxious about the threat of new competition from Delta Air Lines at Alaska's Sea-Tac hub. Alaska Air Group owns Alaska Airlines and Horizon Air.
Delta in recent months has announced dozens of new daily flights in direct competition with Alaska's flights on many of the local airline's most frequently traveled routes.
Between Alaska Airlines and Horizon Air, the two control more than 50 percent of the passenger traffic at Sea-Tac. Delta is second in market share at Sea-Tac with a 12 percent share.
Delta says it is adding new domestic flights from Sea-Tac to feed its flock of new international flights from the airport. Delta now flies non-stop from Sea-Tac to Tokyo's two airports, to Hong Kong, Shanghai, Seoul, Beijing, London, Amsterdam and Paris.
The airline also plans new flights to Los Cabos and Puerto Vallarta in Mexico and to Vancouver and Calgary in Canada.
Copyright 2014 - The News Tribune (Tacoma, Wash.)