JammyBritton27
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Posts: 63
Joined: Wed Oct 11, 2017 2:28 pm

A long-term relationship with airline stocks may not end well

Wed Oct 02, 2019 8:33 pm

The airline industry has undergone enormous change over the past few years. It has been a valuable investment over the years, but looks like it is not the case anymore. Given the global economic slowdown, rising oil prices, Boeing fiasco and debates over regulations to cut down carbon emissions from aircraft, is airline stock still consider as a preferred investment?

https://news.alphastreet.com/long-term- ... -end-well/
 
MalevTU134
Posts: 2188
Joined: Tue Oct 11, 2016 8:04 pm

Re: A long-term relationship with airline stocks may not end well

Wed Oct 02, 2019 8:43 pm

How long before someone chips in with Sir Richard Branson's quote of "If you want to become a millionaire..."? Oooooops....
 
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intotheair
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Joined: Sun Aug 31, 2014 12:49 pm

Re: A long-term relationship with airline stocks may not end well

Wed Oct 02, 2019 9:29 pm

The majority of investment analyses are currently rating most U.S. airline stocks as either neutral or bullish. Everyone was pretty bearish on AAL and ALK, though that's changed now that their stocks have dropped so low.

As an investor, I would like to think that the airlines learned their lesson last time around and are better positioned to handle a downturn after years of capacity restraint and cost control. The stocks also took a beating today, and I suppose part of that has to do with the WTO Airbus ruling, though I have some doubts as to whether that will have a long term impact on the airlines.
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VolvoBus
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Re: A long-term relationship with airline stocks may not end well

Wed Oct 02, 2019 9:35 pm

'Over the years' is a very vague time scale.

If someone had bought 1000 shares in Delta,Northwest,United,Continental,American,USAirways (the major constituents of the Big 3) and Southwest on 1/1/2000,what profit or loss would they be showing? I am assuming that in the bankruptcies,most of the existing equity was wiped out,meaning that for 5 of the 7,the holding would be down to a handful of shares.

I have no idea,but the numbers suggest a loss in excess of 50% is not fanciful.
 
johns624
Posts: 2223
Joined: Mon Jul 07, 2008 11:09 pm

Re: A long-term relationship with airline stocks may not end well

Wed Oct 02, 2019 11:39 pm

VolvoBus wrote:
'Over the years' is a very vague time scale.

If someone had bought 1000 shares in Delta,Northwest,United,Continental,American,USAirways (the major constituents of the Big 3) and Southwest on 1/1/2000,what profit or loss would they be showing? I am assuming that in the bankruptcies,most of the existing equity was wiped out,meaning that for 5 of the 7,the holding would be down to a handful of shares.

I have no idea,but the numbers suggest a loss in excess of 50% is not fanciful.
Stock normally becomes worthless in a bankruptcy.
 
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ADent
Posts: 1028
Joined: Fri Dec 22, 2006 12:11 pm

Re: A long-term relationship with airline stocks may not end well

Sat Oct 05, 2019 9:06 pm

JammyBritton27 wrote:
It has been a valuable investment over the years

Huh?

If your definition of "over the years" is from 2006 to 2019, then you are right. But if think longer, then you are way off.

"Domestic passenger airline operations lost $10 billion from 1979 to 1989, made profits of $5 billion in the 1990s and lost $54 billion from 2000 to 2009." ( http://freakonomics.com/2011/06/24/why- ... uel-costs/ )

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