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I think they got the fuel part figured out. It is management
weakness and consequential incompetence because they let the unions get too much power and
establish an overpaid work force of sub quality. Unions
have a lot of power because the management responsible for a lot of
airplanes are too fearful of lax in
airline safety.
Of course, crash liability insurance will be high, anyway. We all hear that
flying is safer than driving. But I wonder if insurance company
statisticians agree. For example, what is the probability of
certain death in terms of the amount of time one spends driving vs.
flying? Not to mention all the media fallout and the effects it has
on an airline, verses someone dying in a car accident.
The large airlines also must pay a premium to have good spots at major
airports.
This is why Southwest succeeds. They are small, thumb their noses at
pricey major airports, and hire employees who do not succumb to jaded
backward union culture.
JJ> Hello Omega,
JJ> I've had several conversations with friends recently about why the
JJ> large airlines are so screwed up and going/gone bankrupt. But no one
JJ> has a really good explanation for why they are so bad and why they
JJ> have made not money in 15 years or so. Oil doubled--OK. interest
JJ> rates have generally been decreasing. Personnel costs--all businesses
JJ> have that. if your business was so dependent on fuel costs, wouldn't
JJ> you be the world's best at hedging; same goes for interest rates. Or
JJ> have contingency plans for something that is virtually inevitable--oil
JJ> price spikes, rate increases, recession?
JJ> It sure looks to me like just plain management incompetence.
JJ> Anybody have an informed opinion about this?
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