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.

The indexes continue to mask the damage. The new imploders are the airlines. Today, they were down HUGE again. I got on the airline meltdown about three weeks ago. The bailout is getting closer .

My US Air/America West (LCC) Short is up another 15 percent today. It is making a stand at $6.90 on the way to zero.

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.

In the meantime, they effortlessly drop 10 percent a day, today being no exception.

Every day the market is open is a good day to sell airlines stocks.

I may just short 100 shares of US Air (LCC) just to catch a real zero once and for all. No brainer. Once reorganized it will go to 60 again though.

Disclosure- No Positions

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.

Southwest’s further reward…their arch enemy in Phoenix – America West – gets bailout after bailout, the latest a few years ago and a ‘shit squared’ merger with US Air (also a multiple bailout company) .

If the executives from Southwest were running Google, or any other business in the free world, it would be the greatest company of all time.

The airlines are a short even now, but I will continue to just watch in constant fear of a bailout short squeeze. It’s coming.

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 ?

That’s rhetorical.

I just hate them and avoid the stocks. I write about them often. My hate has blinded me to some disgusting gains for legacy carriers the last few years.

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.

Disclosure – no positions

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.

Let me shower and finish the review tomorrow.

To be continued….

It is intensifying this up cycle in airlines. No industry benefits more from LEVERAGE than the airline industry. Wages, interest rates, fuel, mergers (routes and cost cuts) and now technology (the one always good leverage).

Don’t overthink the airline move. It is real. The airline stocks are en fuego.

Don’t be fooled though. This industry is run by the crazies. The cowboys. The same people crazy enough to want to be President, but don’t want to waste their time getting paid civil servant money. More money has been lost by common shareholders in this industry than by all other industries combined (major league made up fact by me but probably true if I cared to research it and actually get paid for blogging).

I will never get involved. EVER. That is one industry people can get rich and go broke without me. But I do stand in awe of the stock moves.

Yippekayyee!

PS – No American company has been more screwed by the government in the history of capitalism than Southwest Airlines. As every quadrupely reorganized, bankrupted Airline emerges to a new IPO rewarding vulture hedge funds and inept management at the expense of past employees and stupid common shareholders, Southwest continues to have to beat competition that they could have sworn they BEAT!