LegalTender

AMR Corp. reported on Wednesday that revenue set a record in the second quarter as fares rose and fuel costs subsided.

http://www.washingtonpost.com/busine...JuW_story.html

SDCA

And you posted this on the Southwest Airline forum because........?

LegalTender

To show even a bankrupt legacy can score a revenue record if you collectively raise fares. It's called context.

SDCA

Ummm....OK?

tyfabes

Are you saying that airlines are colluding to keep prices high?

LegalTender

No. If they all slap on a $10 fuel surcharge within 90 minutes of each other, it isn't collusion a priori. The airline pricing environment is highly transparent, like 4 gas stations at adjacent corners at an intersection.

toomanybooks

I see several reports of analysts recommending LUV now that it is over $18 a share. Would have been better to have heard loudly from them en masse in April 2012 when it was under $8.

When billions of WN points come flooding in for redemption, I think it will catch a lot of people by surprise. I have so many points that I can probably go years without paying cash, and there are a zillion people who fly much more than I do.

Still trying to decide if I should short the stock or go with options. Any thoughts?

steved5480

For a different perspective, I noticed this article yesterday mid-day:

http://seekingalpha.com/article/1897...n?source=yahoo

In the interest of full-disclosure, I own a few thousand shares of LUV. A substantial base was inherited from my father's estate when he died in 1990. I've occasionally added to it over time. Like you, I'm a FF of SWA. I don't work there and have no personal relationship with anyone that does. This investment (along with a handful of others on this level) are what I call my long-term "science fair experiment". I don't need the $$ to buy dog food and am not planning on it being there when I need tip-money for the folks in the airports that will haul me on their golf carts when I'm too old to walk.


I'm not in the financial advisor field (not even close), but every "expert" in that field that I've spoken with in the past 35 years just shakes their head at the notion of airline stocks as an investment. ANY airline.

Airlines operate on thin (often razor-thin) margins. Aside from labor costs, their biggest expense is fuel. Like the rest of us, the airlines don't really have any direct control over the price at the pump. We can look back in history at the really wise things Southwest did re: hedges. At the time, other airlines (and many financial gurus) laughed at them. No doubt much of the laughing was jealousy.

As labor contracts come up for renewal, Southwest's operating costs are going to go UP. I agree with others on here that have opined that Southwest will eventually start charging for checked luggage. It's free money. There are many threads on many boards on FT bemoaning the fact that fares have increased significantly in recent times. Scroll down two lines and there are just as many threads complaining of the inability for FFs on the legacies to obtain free upgrades. The prices continue to rise and the planes are all full. Life is good.

My dad probably didn't fly commercially more than 10 times in his entire life...he hated it. I'm certain he NEVER flew Southwest Airlines, even though he invested in The Company almost from day one. I recall him telling me "that Herb guy is a really smart man". So there you go.

If you have the spare $$ to play with, throw some of it in there and see what happens.

toomanybooks

More analysts touting LUV; it's a bandwagon:

http://blogs.barrons.com/stockstowat...pick-for-2014/

Let's come back in a year and see how they did!

toomanybooks

LUV is up 110% this year, the top performer in the S&P 500:

http://money.cnn.com/2014/11/18/inve...014/index.html

Firing on all cylinders. Much better than I expected.

MrMan

But how can that be with all the wisdom from the former AirTran folks flow of information on what WN is doing wrong?

rsteinmetz70112

They are making a lot of money when times are good for everyone. It remains to be seen that this will continue for any of the airlines.

Have you changed your password yet?