SAVE - Airline stocks extend rally to second day after big Frontier-Spirit deal

The airline sector had another strong day after Frontier Airlines (ULCC +4.4%) jolted investors yesterday with a $2.9B to acquire Spirit Airlines (SAVE +1.7%). It is the biggest two-day share price jump for the sector since last November 8. Bank of America does not expect regulatory hurdles with the ULCC-SAVE merger due to the route overlap being on the minimal side. The deal is seen placing a relatively high ceiling on valuation even if does not lead to a wave of consolidation. The takeover price is seen as supportive of airline valuations going higher despite the near-term cost pressure still in the mix and continued pandemic hurdles. Gainers in Tuesday afternoon trading include Sun Country Airlines (SNCY +8.5%), American Airlines Group (AAL +5.8%), Hawaiian Holdings (HA +5.2%), SkyWest (SKYW +4.8%), Delta Air Lines (DAL +4.2%), JetBlue Airways (JBLU +4.3%) and Alaska Air Group (ALK +3.7%). Looking for the right airline

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Airline stocks extend rally to second day after big Frontier-Spirit deal