10 Worst Airline Stocks To Buy According to Short Sellers

6. Alaska Air Group, Inc. (NYSE:ALK)

Short Interest as % of Shares Outstanding: 7.14%

Number of Hedge Fund Holders: 30

Alaska Air Group, Inc. (NYSE:ALK) is a Washington-based company that operates a diverse network of airlines through its subsidiaries. It runs through three main segments, Mainline, Regional, and Horizon.

The company provides air transportation services primarily using Boeing jets and serves passengers and cargo across the U.S. and extending to various destinations in Canada, Mexico, Costa Rica, Belize, Guatemala, and the Bahamas.

The company has faced significant challenges recently, especially following the incident involving Flight 1282 in January. A mechanical failure caused by a missing bolt on a door plug resulted in a serious issue for one of its new Boeing 737 MAX 9 aircraft, which led to operational disruptions and increased costs.

CEO Ben Minicucci has acknowledged improvements at Boeing but commented that the anticipated delivery of the 737 MAX 10 jets has been pushed back to mid-2026. The delay adds to the uncertainty regarding fleet expansion and modernization, which are critical for maintaining competitive advantage. It ranks 6th on our list of the worst airline stocks according to short sellers.

Labor relations have also presented hurdles for Alaska Air (NYSE:ALK). In February, flight attendants at the airline voted to authorize a strike mandate for the first time in thirty years.

According to the Association of Flight Attendants, the strike was a reflection of widespread demands from labor unions for increased wages, which coincided with ongoing contract negotiations for many U.S. cabin crew.

In August, a proposed three-year labor agreement, which included a 32% average pay increase and new provisions for boarding pay, was rejected by the flight attendants. The developments highlight the ongoing push for better compensation and working conditions across the airline industry, adding pressure to the company’s operational stability and financial performance.

On a more positive note, Alaska Air (NYSE:ALK) has made significant strides in expanding its market presence through strategic acquisitions. Recently, the company finalized a $1.9 billion purchase of Hawaiian Airlines after securing necessary approvals from the U.S. Department of Transportation.

The acquisition is expected to improve competition and benefit consumers by broadening access to both airlines’ networks. CEO Minicucci emphasized the potential for at least $235 million in annual synergies by the third year following the merger, which could strengthen the company’s financial outlook and operational efficiency. Additionally, the agreement includes commitments to maintain essential routes and uphold consumer protections, which will further enhance its appeal to travelers.