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markcc

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  • Airline stocks fall; DOJ probing price collusion [View news story]
    SRAYDJ, What act did they do? Or is this just some political bluster based on a populist idea that ticket prices need to be lower? Convictions on a pattern of collusion are possible, but hard to prove.

    Boeing and Airbus post their production forecast, the airlines post their fleet plans, traffic and loading is reported monthly, fares are a few keystrokes away. All the info is required to be public, so where is the collusion? Parker says he needs more "capacity discipline", is that a crime or just shareholder information?
    Jul 1, 2015. 06:13 PM | Likes Like |Link to Comment
  • Airline stocks fall; DOJ probing price collusion [View news story]
    AlaskanGoldMiner, good move! Stay away from the big 3 and you will be ok. By the time you get to number 4, Southwest is taking all the planes it can get and buying used ones to expand. I cant believe that JBLU, LUV. and SAVE have anything wrong and will be the first to rebound. (I don't follow ALK)
    Jul 1, 2015. 03:17 PM | 1 Like Like |Link to Comment
  • Airline stocks fall; DOJ probing price collusion [View news story]
    quant rec, I can't let a clear accusation like yours to go unquestioned. You say "prices are being set illegally" like you know there facts of the case. Please elaborate the facts you know.
    Jul 1, 2015. 03:10 PM | 3 Likes Like |Link to Comment
  • Airline stocks fall; DOJ probing price collusion [View news story]
    This is Schumer's promise. You will see him surface soon. He has no facts, since it is all just politics. Unless somebody recorded a call, this is going nowhere.

    Buy before the market figures this out.
    Jul 1, 2015. 02:45 PM | 5 Likes Like |Link to Comment
  • Spirit Airlines May Underperform In The Short Term [View article]
    James, Here is your entry point, courtesy of the DOJ accusing the industry of capacity collusion. Spirit is caught in her down swirl of rumors that the DOJ is going to investigate hypothetical collusion and a conspiracy to limit growth. Even though Spirit has the lowest fares, it is getting hit with the rumors. By tomorrow, analysts will figure out that there is nothing involving Spirit colluding and the price will rebound.
    Jul 1, 2015. 02:19 PM | Likes Like |Link to Comment
  • Spirit Airlines May Underperform In The Short Term [View article]
    James, let me challenge your hypotheses with some additional facts. First, Spirit is still flying with loading factors that exceed the competition. Their high density seating model brings their casm to the lowest in the industry. Spirit sells their tickets at average prices lower that the big airlines cost.

    I have tried the same types of Analyses as you did on individual routes. The problem is that ticket pricing is a moving picture, not a static event, with the biggest fares paid by last minute buyers. At that point the loading status of individual flights can influence the pricing of individual seats. Looking at the big picture is the only way to analyze spirit.

    One more thing, with the large number of routes served by Spirit, it is strategically impossible for the big airlines to attack spirit on price, without incurring gigantic losses, so, it just not going to happen today.

    Remember that spirit has the largest opirating margin of any U.S. Airline and the other airlines would have to sell tickets below cost to try to get Spirit out.
    Jul 1, 2015. 11:00 AM | 4 Likes Like |Link to Comment
  • Should You Underweight Southwest Airlines? [View article]
    Michael, the use of a single measure of financing can be distracting. So many factors influence a downturn, which will hit all airlines. An airline with old airplanes will still have to replace them, so capital requirements will be greater for UAL and DAL than for American. American will generate more cash flow from depreciation than UAL and DAL. All is not wrapped into a single measure as you suggest.
    Jul 1, 2015. 10:31 AM | Likes Like |Link to Comment
  • Morgan Stanley picks 4 winners and 2 losers in airline sector [View news story]
    Bentley, no I do not work at American. My comment was because I have found that focusing on daily fluctuations, without some primary changing event, is not a good use of my analysis time. It defocuses research time away from fundamentals.
    Jun 27, 2015. 05:57 PM | 2 Likes Like |Link to Comment
  • Morgan Stanley picks 4 winners and 2 losers in airline sector [View news story]
    Bently1, You comment and seem to promote the importance of Daily stock price changes? I have to agree with Bikerx, the fundamentals have not changed on AAL and we are just days from Delta reporting June Traffic, that usually starts leading the stocks of the industry up or down. All my flights this week were 100% full and non-upgradeable, meaning that the airline got top dollar for all the tickets on the flight.

    Later in the month, the airlines will be reporting Q2 data, expected to validate the earnings expectations and push multiples.
    Jun 27, 2015. 12:09 PM | 1 Like Like |Link to Comment
  • Uber Has Lost The Taxi Battle In NYC [View article]
    Tack, With most of the shareholders of Uber in California, and a $50 billion market cap, California stands to get tens of billions in taxes from an IPO. I wouldn't count their current efforts as a done deal.
    Jun 25, 2015. 03:09 PM | Likes Like |Link to Comment
  • Uber Has Lost The Taxi Battle In NYC [View article]
    Tack, I see the articles about taxi driver protests in France, but it is not clear that this small constituency is big enough to move legislation in France. There is similar resentment here in the USA, but that has not motivated any generalized legislation to prohibit uber yet.
    Jun 25, 2015. 10:38 AM | Likes Like |Link to Comment
  • Uber Has Lost The Taxi Battle In NYC [View article]
    I am still looking for evidence to support the title of the article, "Uber Has Lost The Taxi Battle In NYC". Uber is alive and thriving, and like any good cockroach, hides when it has to and comes out when people are not focused on it. Am I wrong? You cant kill Uber can you?
    Jun 24, 2015. 02:52 PM | Likes Like |Link to Comment
  • Morgan Stanley picks 4 winners and 2 losers in airline sector [View news story]
    jays265, that "no extra cost" upgrade to American's interiors is part of a $2 Billion upgrade. http://bit.ly/1NbwvC2
    Jun 24, 2015. 02:07 PM | Likes Like |Link to Comment
  • Morgan Stanley picks 4 winners and 2 losers in airline sector [View news story]
    Red Segje, IMO, VA is following the old strategy of providing high service levels that stunted JetBlue in the Barger days. For VA today, there are too few planes, highly competitive markets, not many planes on order, inability to break into new markets without a big buy-in period, big debt and low margins. Besides transcons, where they compete with everybody, their regional routes are too much aligned with Southwest, not a good idea. ULCCs like Spirit and Frontier are growing in places like SFO area much faster, while in class competition like JetBlue is adding a lot of A321s with first class seating.
    Jun 23, 2015. 02:19 PM | Likes Like |Link to Comment
  • Morgan Stanley picks 4 winners and 2 losers in airline sector [View news story]
    mrbill757, "Not going far?", you are talking about Southwest.

    Like all LCCs, Southwest just moves in on the markets it wants. The other airlines malign the service levels of the LCCs, but they are still the only fastest growing segment of the airline industry. The big-3 US international network carriers are running into trouble trying to grow their international business. While we can debate the international subsidies for the Persian Gulf carriers, the big-3 have major growth issues and are basically stopped in any significant US expansion.

    Southwest will add more net planes (adds-retirements) in 2015, than ANY other US based airline. On the agenda is expansion to Mexico and Caribbean where they already fly over 100 flights per day. The international facility in Houston Hobby is already built with plans for expansion. Gary Kelly is already publicly talking at the shareholders meeting about Hawaii with the 737MAX and there have been published rumors of gate negotiations in Canada.

    I am not seeing an airline that has barriers to growth as you do. Their plane orders, new and used, will grow the airline when others are not growing. International flights are just one 737 variant away.

    As for variants, Boeing makes an international version of the 737 that services Europe. The Boeing 737-700 BBJ, was used by KLM, has a range of about 5,500 NM and the new 737 MAX 9 will have a range of 6,255 NM. A customer like Southwest can tell Boeing to make one to its specs.

    I think that Southwest will eventually go for a larger plane in the MOM category (like 757s) for international as long as it shares technology and engining with the 737 fleet. A tall order for Boeing, but a super big market too. If designed properly, I could see the plane designated as some sort of 737MAX and be bought by Southwest over the next few years (probably not till after 2020).
    Jun 23, 2015. 01:46 PM | 7 Likes Like |Link to Comment
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