I was bored so I viewed some of the airports in Arizona and counted all of the parked airplanes that the airlines have parked in the hot and dry air. There will be a vast amount of airplanes to fly when ever the world perks up but should be years. I wonder how Boeing is holding at 180.
Are airline stocks at their lowest?
- Thread starter suhaibprofservices
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i think it's a matter of time, just hold out, when the growth starts I'd imagine it will be slowly. Jumping in now and you run the risk of buying a bankrupt stock. Everyone bailed in 2008 out of banking and property stocks saying they would never touch them. I bought 2 properties at that time, paid off. tripled my property prices and locked into a low mortgage There is always an initial spurt after the news turns good but wait until the euphoria calms down, good overnight news does not negate the dire economic state a business / economy is in .
I also bought S&P a few months back and cashed out this week .
To be fair I am not great at short term trading , a lot better at investing .
Being older all I can say is that world events come and go (like this virus) and for some reason people are shocked every time at what happens to a stock price. There are a whole lot of tech stocks ready for massive dive like a kamikaze pilot , e.g. zoom as the business fundamentally is built on shaky ground and easily replaceable.
I also bought S&P a few months back and cashed out this week .
To be fair I am not great at short term trading , a lot better at investing .
Being older all I can say is that world events come and go (like this virus) and for some reason people are shocked every time at what happens to a stock price. There are a whole lot of tech stocks ready for massive dive like a kamikaze pilot , e.g. zoom as the business fundamentally is built on shaky ground and easily replaceable.
Sure. When I said "Huge advances in technology have enabled them to evaluate every penny across every aspect of the operations", capacity is certainly one of those aspects.
Capacity can now be fine tuned to a particular market, to a particular season, all the way down to a particular event on a particular day... and even a particular time of day. This was heretofore nearly impossible using a hub and spoke model flying a multitude of different jets of varying seating capacity.
There's way way more to it than just shrinking the number of flights. You have crew considerations, maintenance considerations, weather considerations; the list is long. A business has to use its assets in the most efficient manner possible, especially a business who's assets are as cash flow intensive as an airline. The more efficiently those assets are deployed, obviously the more money they make.
In the old days these guys were flying 727 fuel burning pigs in and out of markets that left the jets well over half empty, with little ability to change the situation. Great for the non-revs, but not so great for the bottom line. That's one of the reasons LUV did so well as it expanded. It flew point to point in many markets with a standardized fleet, but that's also the reason they could never expand internationally; reason being that pretty much demands a hub and spoke type operation. That, and the premium flyer does not want to go from Miami to LA and have to change planes 4 times and sit in the back with people that use Kroger bags for luggage and who's kids have opted to not wear shoes.
I realize you know a thing or two about business and certainly trading, but your post makes it sound like the idea of optimizing supply and demand over a given price point is a bad thing. In my eye's, that's what business is all about. The goal of every airline CEO should be to make sure not one seat goes empty on any flight. If wx or maintenance leaves a few people behind bitching, well so be it. They can rent a car and drive.
There's an old saying... "I'd rather be on the ground wishing I was in the air... than the other way around". People can bitch all they want, but our safety record is impeccable, and ultimately that is the bottom line for air travel.
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I’m not making a judgement about what’s good or bad.
The airlines started doing well after a bunch of them merged and consolidated. Technology was not the driving factor in their profitability.
Capacity means that there are only 4 flights from NYC to chicago at 5pm vs the 10 before competing for the same 300 passengers. That only happens when the industry becomes an oligopoly and there are unspoken pricing understandings.
MIT has some nice industry data. Revenue per seat mile hockey sticked as the consolidation wave began in 2011.
Hockey stick RASM is a good thing for shareholders.
There has been tacit collision in airline pricing pretty much since deregulation, I'm not sure that changed a lot especially given the Spirit/Frontier/JetBlue/Alaska/Southwest spoilers thrown into the mix. Load factors have definitely gone up, but I don't think that's really given them pricing power. It just allows them to make more money because they operate in an industry with a cost structure that's heavily weighted to the fixed cost side.
Last week they said that it may be tears before the airlines return to their previous volume and it will likely never reach those levels again
So.....if they don’t return then they sell their older planes with the bankrupt companies further deflating plane prices for new and old planes.....it’s gonna be bad
So.....if they don’t return then they sell their older planes with the bankrupt companies further deflating plane prices for new and old planes.....it’s gonna be bad
I wish I had a paid subscription to Statista so we could look at the various stats more in depth.
Newurldman mentioned 5 flights instead of 10 going from NY to ORD... well those extra 5 gates still cost the airlines money, and they weren't sitting empty. Their AI told them when they were drawing out that month's schedules it was more profitable (and they could in fact fill them accordingly) to put the a/c and crew utilizing those gates on other routes and jack the price of the ORD tickets. Deep neural machine learning at its finest. That's what I was referring to, among other factors as well. There is no debating AI has helped the industry's bottom line immensely.
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you don’t get it. AI and technology only add to profits when the savings they provide aren’t passed to the customer. That can only happen in a consolidated industry that can keep prices up whether through ticket prices or through additional fees. Otherwise some aggressive competitor will use the tech to lower their price.