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  • Years Of Success Make Southwest Air A Battlefield [View article]
    Southwest's margins and growth rate are totally justified. With Southwest at a 12.64% margin (TTM through 12/14) as compared to Delta's 8.97% (TTM thru 3/15) puts Southwest in the drivers seat in cities like Atlanta. The rule is that Delta simply can't discount to get Southwest out. If you are in Atlanta, you will be getting a surge of new service by Spirit Airlines that comes with an 18.4% margin (TTM at 12/14). If I was at Delta, I would be concerned because the new entrants have better margins and staying power than the bad competitive assaults of the past from airlines like JetBlue. JetBlue botched its entry into Atlanta by only competing with Delta on one city and having margins too low to stick around until its markets develop. I look for JetBlue back in Atlanta when it figures out how to add service to 5-6 cities at one time.
    Apr 17, 2015. 12:57 PM | Likes Like |Link to Comment
  • Spirit Airlines: Get A Discount On This Discount Airline [View article]
    Spirit is not for everybody, just the people that want to trade off other comforts for price. That's all. Invest = yes for me, fly = no for me, I have no problem with that.
    Apr 15, 2015. 10:26 PM | Likes Like |Link to Comment
  • Update On Virgin America [View article]
    Guys, you are forgetting about the fact that they have only a handful of new planes for the next two years and are stuck with slow growth while their other LCC competitors are getting dozens of planes. Do you want an airline like Spirit that is growing at 22-25% or do you want one growing at 4-6% .. You decide.
    I don't buy at the current levels.
    Apr 15, 2015. 08:35 PM | Likes Like |Link to Comment
  • Why Investors Shouldn't Be Worried About American Airlines' Traffic Dip [View article]
    tripleD, AAL will mimic Delta's performance for the quarter, but with lower PRASM offset by much better fuel prices than Delta delivered. With earnings coming out next week, a good chance of beating consensus. Since dozens of factors can influence a stock, I don't like specific forecasts, but a big downside is very unlikely.
    Apr 15, 2015. 07:42 PM | Likes Like |Link to Comment
  • Airline watch: Go domestic says Deutsche, Delta to cut international routes [View news story]
    Look for trans-Atlantic battles for the next few years as new players move in under the Open Skies agreement, then a fallout as the margins get depressed and many drop out.
    Apr 15, 2015. 10:23 AM | Likes Like |Link to Comment
  • Why Investors Shouldn't Be Worried About American Airlines' Traffic Dip [View article]
    ahouseoforange, likewise, I am trying to calculate the same number, but there is limited info on the defunct stock. I did find a quote on google from the day before the merger that indicated a market cap of $3.82 billion with a stock price od $11.39, indicating approximately 335 million shares of AAMRQ outstanding, so $300 million will equal some 90 cents, so we are both close. A nice payout.
    Apr 15, 2015. 09:01 AM | 1 Like Like |Link to Comment
  • Why Investors Shouldn't Be Worried About American Airlines' Traffic Dip [View article]
    I just checked the American press release and don't see any major changes to their stated direction. The stock is still undervalued and changes they are making through a consolidated flight certificate will begin in Q2. Overall, loadings were as expected, but, there continues to be softness in North Atlantic and Latin American markets. In a few years as open skies has more impact, this is likely to make a difference, but for now it is not a major impact.
    Apr 13, 2015. 02:14 PM | 3 Likes Like |Link to Comment
  • Airbus comments on A380 program [View news story]
    The A380 is the only aircraft in its class. Airbus will milk this plane as long as possible. Plan on some upgrades that can be done cheaply, but no major revisions.
    Apr 13, 2015. 10:40 AM | Likes Like |Link to Comment
  • Why Spirit Airlines Can Continue Doing Well Whether Oil Prices Stay Down Or Not [View article]
    Spiritowner, my real measure of Spirit is their ability to "at will" enter new markets and make them profitable. Remember that a 20%+ margin trumps a 10-12% margin by the big 3 easily. The big competitors can't just cut prices to get them out of their markets. Spirit has staying power.
    Apr 12, 2015. 10:54 AM | Likes Like |Link to Comment
  • JetBlue reports March traffic, ups Q1 PRASM guidance [View news story]
    The numbers are pretty awesome in comparison to the legacy airlines, in pricing, seat growth and load factor. The big guys, AAL, DAL and UAL are getting less for tickets, loading less, are shrinking the number of seats.
    Apr 10, 2015. 04:56 PM | 2 Likes Like |Link to Comment
  • Fueling around with airline stocks [View news story]
    cyndrome, the time frame of your analysis is "this year", while technically accurate, is a bit arbitrary.

    Your observations are basically correct, the growth leverage for the smaller carriers is better, but priced into the stock PEs and therefore puts them more at risk.

    Aging is relative, AAL will regain the crown for youngest fleet this year, at the cost of the balance sheet. LUV grounded 86 717's in the last year and, in my opinion, is temporarily short of planes for growth. YOY LUV's plane numbers are down, with more coming from the assembly line and from the used plane market. Look for renewed growth in LUV later this year.

    The big 3 have scale economies, frequent flyers and branding. That still means a lot. None of them are growing significantly, but profit are high and balance sheets are getting rehabilitated. Margins are at highs unseen for decades.

    Investing is a movie, not a still picture. The little guys can't get planes fast and still have low numbers. Even Frontier, which wants to be more like Spirit, can't get any significant number of planes until late in the decade. Meantime, the big 3 rule. Spirit is getting 15 planes this year and JetBlue 12, that is a drop in the bucket for a US airline industry operating around 7,500 jets.
    Apr 9, 2015. 03:05 PM | Likes Like |Link to Comment
  • Pilot Shortage And The Legacy Feed [View article]
    This article needs to tell what changes alrady happening:

    1 - 7-8% of all pilots on US airlines are already non-US citizens.
    2 - US pilots need more hours before they can hire on to US airlines, so they are going to airlines in countries where standards are lower then come back when they get their hours.
    3 - Airlines are beginning to train pilots from zero hours.
    4 - Airlines are beginning to favor larger planes to get a better pilot/seat ratio
    Apr 9, 2015. 06:15 AM | Likes Like |Link to Comment
  • Southwest Airlines May Experience Bumpy Skies Shortly With Rising Oil [View article]
    indypeg, I am in agreement with you. BTW, the stocks never got to fully represent the value from the decline, so should not be backtracking as much now.

    The investment in airlines today is all about an industry that understands its costs and margins. Without the renegade disruptor airlines of the past, there are no significant downward pressures from within the industry as before.
    Apr 8, 2015. 09:49 AM | 2 Likes Like |Link to Comment
  • Southwest Airlines May Experience Bumpy Skies Shortly With Rising Oil [View article]
    Chartists are selling airline stocks to fundamentalists who look at current and projected growth and earnings. Airline stocks are priced by nervous investors, and always will. The fundamentals are solid, for now.

    Projections about fuel price increases forget what happens in the industry when fuel prices go up. Airlines have pricing power, for now, and will simply raise prices.
    Apr 8, 2015. 08:57 AM | 2 Likes Like |Link to Comment
  • Airline stocks react to crude oil rally [View news story]
    The rapid rise in oil prices is probably creating a short squeeze among those who believed the $10 per barrel stories. Oil is still within the $45-55 range for now.
    Apr 7, 2015. 05:52 PM | Likes Like |Link to Comment