Today Continental announced that they will be charging $15 for a first bag checked in. With the economy how it is going with this trend is the worst thing the company can do. This won't affect first-class flyers but I believe will deter many coach flyers from the company.
On top of this people over Labor day weekend this year flew in smaller numbers then in previous years. This is a sign of things to come.
And on top of all of that you must remember that not even airline owners invest in airlines. It's a terrible industry. End quote.
Jim Cramer has said it, the Wall Street analysts have said it and some of the most respected money managers have said it: Don't own an airline stock! Apparently people are listening. They are listening so attentively that the airline prices have fallen drastically. Possibly even too drastically.
That's not a very popular train of thought right now with oil prices nearing $150 a barrel. However, with the prices of the airline stocks so low, it is hard for the long term investor not to consider purchasing them.
6/4 - "The airlines will make profits no matter what happens to the cost of fuel...Analysts have fallen into the trap of believing what the majority believes, but, as Keynes told us, in economic matters, the majority is always wrong. Once everyone believes oil prices are going higher, everyone acts in ways to prevent the prices from going higher."
"It is likely that GEO Metros will burn more fuel this year than ever before, because they will be purchased by drivers who travel a lot, and it is likely that the amount of fuel burned by SUVs this year will be dramatically lower than the amount...
6/7 - "While financial stocks are a great way to hedge a portfolio of gold and silver stocks, I believe I have found another sector that can be used as a more efficient hedge...The inflationary effect of rising oil is positive for gold and silver investors, but negative for sectors like airlines where on average 1/3 of the cost of operating an airline is tied to the price of jet fuel...As speculation grows over the price of oil, airline stocks have come under pressure and have approached heavily oversold territory."
"The airline sector is very cyclical and prone to high volatility. Airline...
I've written previously about using financial stocks as a hedge against
the falling price of gold and silver equities.<!----> Gold and silver stocks
are currently rising over an unstable global financial climate, rising
inflation and a falling dollar. As the financial environment attempts
to stabilize, we have seen the recovery of many bank stocks and the
fall of most precious metal stocks.
While financial stocks are a great way to hedge a portfolio of goldand silver stocks, I believe I have found another sector that can beused as a more efficient hedge. When we look at creating hedges, Ibe
The management at Continental Airlines (CAL) has long expressed its preference to remain
independent. Management has often reported that airline mergers are
difficult. Still, the announcement of a deal between Delta Airlines (DAL) and Northwest Airlines (NWACQ) seemed
to have pushed CAL into a corner, perhaps not.<!--more-->
Over theweekend, the management reported to the board its findings in regard tothe "new airline landscape". Management recommended to remainindependent and the board voted to follow the recommendation. CAL willground 15 more of its older and less fuel efficient aircraft
4/15 - Goldman Sachs - "We are not surprised by the nature or timing of this well-telegraphed merger between NWA and DAL. The announced transaction suggests that the merged companies could achieve synergy savings of $900m-$1b from the optimization of the combined airline’s fleet and an expanded global network plus overhead savings – a level that if achieved would offset our combined loss estimate for the 2 airlines in 2009 of $915m. The merger requires DoJ approval which the airlines expect to receive by the end of the year."
"But consolidation in any industry – not least the airline indus...
The airline turnaround continues. I have owned this one for 4 years and am close to a 10 bagger to date. CAL management does an outstanding job of developing routes that fully utilize personnel and equipment. The company has improved fuel efficiency by 35% in 5 years. Load factors are very high and yields are rising. Technology is used for ticketing. Cooperation with other lines gives travelers access to the world.
CAL is the most international of all US carriers and this is where the future lies. Global competition is fierce, there will be consolidation, CAL will survive an...
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About Continental Airlines Inc
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