This week, there have been a good number of articles written about airlines and their schedules, specifically how airlines are adapting them to make higher profits. WSJ’s The Middle Seat profiles Southwest Airlines, and their new scheduling system that adapts to customer demand. I don’t want to steal their thunder, but I do want to affirm that the cheap seats will be going away, at least on some carriers.
For those of you in the investing business, I hope that you were smart to invest in airlines. As I’ve written in the past (‘Is Oil a Proxy for Airline Stocks‘), airlines have an inverse relationship with oil. The tremendous drop in oil prices has boosted airline stocks. In less than two weeks, United Air Lines’ parent company UAL Corp. saw their shares increase nearly 50%. Other big gainers have been Delta, US Airways and Republic. As oil begins to fall, I think we’ll see the airline stocks increase. However, I must caution you by saying: they will not go up forever!
Enerjet, a new carrier emerging from Canada, has been reported eying launch in 2009. The carrier, spawned by 4 former WestJet executives, says they are hopeful that their airline will succeed with the tumbling oil prices. The Calgary based company is expected to lease 2 Boeing 737-700 NGs, the same aircraft WestJet has the most of, for routes in and out of Alberta. Enerjet’s president, Tim Morgan, a co-founder of WestJet, reported that they’re eying potential routes that will not step on WestJet’s or Air Canada’s toes.
Image: flickr.com
Nice writing. You are on my RSS reader now so I can read more from you down the road.
Allen Taylor