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Why Are Airlines Better Investments Than
They Used to Be?
By www.ProfitableInvestingTips.com
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
The old saying is that if you want to
be a millionaire, start out as a
billionaire and buy an airline! But,
what happened?
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
None other than Warren Buffett, who
called airlines a death trap for
investors, has poured $10 billion into
the four major airlines in the last
couple of years.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
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Before We Continue…
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
Why are airlines better investments
than they used to be?
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
Business Insider says that Buffett’s
investment is everything you need
to know about the airline industry.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
Over the past decade, the landscape
of the airline industry in the US has
changed greatly.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
All four airlines have reported record
profits, over the past two years,
buoyed post-financial crisis capacity
discipline, depressed labor costs, and
cheap oil.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
There are also fewer competitors in
the domestic market to contend with.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
In the year 2000, the sky was filled
with names such as America West,
US Airways, TWA, AirTran,
Continental, ATA, and Northwest
Airlines.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
By 2016, all of these brands had
disappeared by being merged into or
acquired by the Big Four.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
The remaining big four U.S. airlines
are these.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
American
United
Southwest
Delta
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
It should be noted that Buffett is
investing roughly equal amounts in
these four carriers.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
That would seem to be consistent with
his stated philosophy of buying stocks
for the long haul and only buying
stocks when he has a clear idea of
how the company makes money and
will continue to do so for the
foreseeable future.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
Airlines are better investments than
they used to be because fuel costs
are down along with other costs of
doing business such as salaries.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
And the desperate game of
underbidding to try to claw back
passengers for rivals has pretty much
gone away as the guys who were
doing this have been absorbed into
the remaining big four.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
How Long Will the Good
Times Last?
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
Is there still time for you to invest in
US airline stocks or has the
opportunity passed you buy?
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
CNBC notes that aviation stocks are
soaring but investors should be
careful.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
Investors have reason to be bullish
right now on air travel
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
but domestic commercial airlines’
recent soar has some experts
questioning whether there is still
enough meat on the bone to get in
now and still achieve above-average
returns.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
Several favorable market conditions
continue to make airlines a good
value stock: low fuel prices, low seat
capacity and consolidation.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
“It already had a great run, so there is
always a question of ‘How much is
left?'” said Jerry Braakman, chief
investment officer for First American
Trust, which oversees $1.1 billion in
assets.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
The company bought stake in Delta
for $10.41 a share in 2012.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
Last year it sold the last of its Delta
stock for about $40 per share,
believing the recovering airline had hit
its peak. It is now trading at around
$48.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
Interestingly these folks looked at
Delta and others as short term
investments.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
They bought for the recovery and sold
but it turns out that they sold too soon.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
Airlines will continue to be better
investments than they used to be so
long as the market remains only
moderately competitive and so long
as fuel and labor costs stay down.
http://profitableinvestingtips.com/stock-investing/why-are-airlines-better-investments-than-they-used-to-be
But if Trump economics really do end
up stimulating the economy prices
could go up across the board which
could hurt the air carriers.

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Why Are Airlines Better Investments Than They Used to Be?