As they say in real estate…NICE House…Shitty Neighborhood.
We all know I hate the airline industry. There are just too many touch points with employees and customers. It’s a bottomless pit for common shareholders and not an industry I recommend.
BUT, I love and respect Southwest Airlines for their ability to survive without government support and employee strikes.
Today on Wallstrip, we take a look at Southwest Airlines (LUV) . As their competitor’s need a new round of government support or mergers to save them, Southwest should be entitled to profit. They likely won’t an continue to face unfair competition in the air.
Yesterday a few airlines announced that they will start charging for a second bag…$25. That will only be another disaster. Why should I pay extra for skis, a hockey stick or a golf bag while a 400 pound person with 1 bag is not penalized at all. It’s reverse discrimination.
Weight is weight and if you want to do a weight tax, put a freaking scale in front of the check in desk and weigh us all.
Add a weight guesser in the ticket line to add to the carnival act that is airline check in.
The closest to bankruptcy today is Mesa airlines. We had Jon on Wallstrip over a year ago with the stock near $8. Today is at 50 cents and a market cap of $13 million. For the price of an average townhome in Manhattan’s West Village, you could ow a battered airline.
There were a few airline bankruptcies this week that got me pulling up tickers. All turds.
We are one disaster away from another massive airline bailout ‘crisis’ and other than the airline industry itself, the market could care less. All media eyes are focused on the Bear Stearn’s hearings, but forgets the bazillions the government pissed away after 9/11 saving unsavable businesses and useless executives. NO PAYBACK on those crappy loans.
I am always amazed that our piece of shit Airlines can keep planes in the sky. The same crew of cowboy (they call themselves that)/criminal executives has no incentive to make money.
They have everyone to point fingers at to deflect childlike operating prowess. Unions, Wages, Fuel, Maintenance, Terrorism….
If you are a common shareholder you are being raped.
I am first to be thankful that we are free to fly. It is one of our greatest freedoms, but we need a real plan. Obviously, nationalizing won’t work.
The prices of flying are completely ridiculous. Because it is one of our greatest freedoms, not priviledges, the price should truly reflect the freedom. If anywhere close to true competition existed, ticket prices would be much higher and we would have cheap/workable video conferencing. We would lose Vegas, but let’s face it…Vegas is lame.
Alaska Airlines (ALK) has been around since 1983 and the best I can say about them is they have not needed bailouts. Well….congrats and suck my ass. Next to Southwest, they are the cream of the crop. Isn’t that special.
Part of the problem is that Southwest Airlines (LUV) does not get rewarded for having $4 billion in the bank. That’s right…$4 freaking billion.
If Capitalism was even closely at work in the airline industry, Southwest executives would not only be running the countries airlines, but also the government. Southwest hedged oil years ago. The reward is that only 20 percent of their market cap has eroded since hedging.
There are certain toxic industries. The biggest, baddest most toxic is the airline industry.
You just need to avoid it.
Those with unions are big fat ones you can’t miss. Those that rely on transporting fat, cheap, mean people are others. Those that rely on good weather are another.
The airlines have the triple whammy and OIL.
If you own airlines, you deserve to lose your money or you trade on inside information.
I like JetBlue. Peter Lynch says to buy companies you like. You think ?
We love to hate them. Bad service, delays, peanuts, mile high club (ya right), unions, corruption, no livestock (unless its Aeroflot), no internet, no email, no sushi, oil shocks, terrorism.
I have been friends with Jon Ornstein, CEO of Mesa Airlines, for years here in Phoenix. He knows the airline business as well as anyone in the world. My partner in Biltmore Ventures Adam Bruss (Morris Callahan the other) is a pilot that I trust implicitly (though I got to stay on the ground for this episode ). Since Wallstrip was in Phoenix and so many legacy carriers have been acting like growth stocks, I felt that the airline industry was a topic worth discussing.
I love this show. I still hate airlines and their stocks (save Jon and Mesa). The legacy carriers will screw this up in the end.
Yes, jobs have been saved with the government bailouts and the recent reorgs. Also, Jon mentions (I am in disbelief) that the emergency loans have been paid back, but Southwest and the other hub carriers have been penalized for winning. They have to keep competing with companies that they beat.
Running an airline seems almost as crazy as running for President. Trading the stocks is not my cup of tea.
It was the gas that killed their near perfect review from me.
Not the price of gas, but the gas from the 300 pounder that sat across the aisle from me. This animal must have had 6 pounds of salami before boarding the flight (with a skim milk chaser and some raw eggs). It was a constant pounding that has tainted my almost perfect experience. My poor wife moved to a middle seat next to the bathroom to get fresh air.
). Since Wallstrip was in Phoenix and so many legacy carriers have been acting like growth stocks, I felt that the airline industry was a topic worth discussing. 
