Why Investing in Airlines Belongs in the Too Hard Pile | Hacker News Reader

Why Investing in Airlines Belongs in the Too Hard Pile

25iq.com

30 pointsjseliger10 comments

Seems like everyone involved in airlines makes money except the shareholders. Financiers who sponsor aircraft and engine leases, speculate on residual value, and take other niche risks. Union employees. C-Suite officers. Lawyers, consultants, accountants.

My aunt was one of those union employees with United for 35 years, after which she retired and they then cut her pension by roughly 40%. She got to go back to work at 65-years old. Maybe scratch union members off your list of people who do well in the airline world.

Article from 2005 with the details: http://articles.latimes.com/2005/apr/23/business/fi-ual23

I did not mean to imply that the union employees of airlines got a fair deal! I think a big problem from a shareholder's perspective is that airlines periodically use bankruptcy protection to renegotiate their deals with everyone, including the unions. But the shareholders aren't the only ones getting screwed.

> “I don’t care what you cover the seats with as long as you cover them with assholes.” Eddie Rickenbacker, Eastern Airlines.

Yep, it's _the_ Eddie Rickenbacker https://en.wikipedia.org/wiki/Eddie_Rickenbacker

"Yet, the net amount of money that’s been made by the shareholders of airlines since Kitty Hawk, is now a negative figure—a substantial negative figure."

I first heard that about 20 years ago, but then it was at breakeven. Apparently it's become worse.

Berkshire Hathaway owns NetJets, an airline for the 1%. That's profitable.

Yeah, who ever thought about the stock market funding risky and forward looking businesses. Let'em go to a bank I say.

Airlines ? Too hard, especially those low cost ones. Internet ? Too speculative. Computers ? Hard as hell. Biotech ? Depends, do they make drugs for rich people ? Or at least, do they buy existing drugs and extort dying people ? Now that's a business I can understand.

Airlines aren't risky for investors. In fact, they're about the closest thing you'll get in the stock market to a guaranteed return.

Now, that return happens to be negative; but there's practically no risk at all of accidentally getting a positive return...

Is there a source for that? I always hear that airlines have been break even since Kitty Hawk, but never seen any actual work done to prove so.

With oil dropping as it is now, they might get temporarily lucky.

Why investing-in-airlines belongs in the "Too hard" pile.

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