Airline Stocks
Airline stocks have always been very risky due to the nature of the business and they are highly leveraged operations. The performance of airline companies is directly affected by fuel prices and other factors such as labour costs. As the price of gasoline increases, they need to spend more money to buy the fuel and thus maintenance fees will also increase. Since the price of gasoline is so high nowadays, almost all airline carriers have been losing money. However, investors seemed to be relieved when they see better than expected first quarter results from the airlines.
I have been on airplanes a few times, and the overall experience is good. I especially like United Airlines (UAUA) and Continental Airlines (CAL). IMO, they have very nice aircrafts and exceptional customer service. The only airplane carrier that I hate is Air Canada due to bad customer service, aging staff, bad food, and small uncomfortable aircrafts.
Concerning the Northwest Airlines (NWA) and Delta Airlines (DAL) merger, to be honest, I've never been to either of them so I don't know how their service is like. However, one thing I know is that both of them provide cheap airfares (compared to others). They emerged from Ch. 11 bankruptcy protection a year ago so it looks like the worse has been gone. If the merger is successful, then both companies should benefit.
May 29th, 2009 - 02:18
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June 16th, 2009 - 08:10
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