Wednesday, March 18, 2015

American Airlines Takes Off

There are some changes happening in the S&P 500 at the end of this week, as Allergan - best known as the manufacturer of Botox - is being acquired by the Irish pharmaceutical giant Actavis. Allergan will be replaced in the index by the American Airlines Group.

Until Friday, the only airlines in the S&P will be Delta and Southwest. United Continental, despite representing the merger of two of the most prominent airlines in the nation, is not in the index. Neither was American, despite the fact that it was the result of the December 2013 merger of American with USAir.

The addition is a sign of how American has come roaring back after flirting with bankruptcy a few short years ago. In November 2011, the airline's stock price dropped down all the way to about 4.  By the time of the merger with USAir, two years later, it had bounced up to about 20. Now it's over 50 - an increase of more than 1000 percent.


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