Are you really certain you want to buy in to an airline for other than "the glamour" factor? Check out Stephen Northfield's column in the Globe & Mail's Report on Business today (B13) and see that most investment advisors don't recommend putting serious money into airlines. This column is rather negative, suggesting than even the likes of Warren Buffett and Carl Icahn have not done well by their respective purchases of USAir and TWA. But he doesn't mention the Checchi brothers success with their NWA buy-out. And there is little doubt, the merged model Gerry Schwartz is trying to put together in Canada would rejouvenate the business up here and make shareholding a better proposition than it has been.
We all know the story of Cdn, whose shares have plunged from $5 to less than $2 and never paid dividends. And there is AC which went public at $8 and has basically languished in the $6 to $7 range prior to the Onex offer. (It peaked twice at $12 and $15 over its 15-year cycle, but immediately plunged back down to the doldrums.) AC has never paid dividends either.
British Airways has been delivering quite healthy profits through its lifetime in thep rivate sector, and has always been a good investment, though it has been through a slight bit of turbulence recently. They did offer shareholders some perks, but don't know if they still do.
That's right, you don't even get a shareholder's discount, or a free drink in economy.
Westjet has done well since it went public last month, but it is a very focused carrier with a low overhead model. Most US lines have made profits and paid dividends, and their share prices have risen, but not at the same levels as the rest of the market.
Airlines are capital intensive, and have high operating costs, many of which are beyond their control (fuel, taxes),and very reliant on their labour forces and weather to both be "calm".
As my "nom de plume" implies, I own share in a few airlines. (And builders of airpplanes.) Not a lot, and not really for a high return investment. It's just to "be in the business", though I would like to take a ride with Onex and think the deal is actually a very good one for bringing stability to the Canadian marketplace and better return to shareholders. (See my comments in other streams on the Onex deal.)
What it means to us "elites" is another matter altogether. We all fear AA's involvement if it means a drop to their standards of service i nthe air and on the ground. (And unlike the press, I am not convinced Cdn will shut down in February, as you suggest in another posting, Empress.)