Author Topic: Buffett's Berkshire takes stakes in four major airlines  (Read 31768 times)

gfp

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Re: Buffett's Berkshire takes stakes in four major airlines
« Reply #90 on: February 27, 2017, 09:40:05 AM »
does anyone have the link to the American Airlines presentation that CEO Doug Parker gave that apparently convinced Tedd Weschler to invest?


John Hjorth

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Re: Buffett's Berkshire takes stakes in four major airlines
« Reply #91 on: February 27, 2017, 09:57:44 AM »
Definitely sounds like they are done adding shares of the Airlines.  They don't want to go over 10% and have share repurchases to factor in. 

Yes, it also sounded to me like this basket of airline stocks was for the long term for BRK [to the contrary to a "generally undervalued" trade]. Time will naturally tell.
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KCLarkin

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Re: Buffett's Berkshire takes stakes in four major airlines
« Reply #92 on: February 27, 2017, 01:19:55 PM »
does anyone have the link to the American Airlines presentation that CEO Doug Parker gave that apparently convinced Tedd Weschler to invest?

This is good. Thanks.

Key takeaways:
- Available seats are only up 6.7% over the last 10 years.
- 3 global hub-and-spoke carriers. Consolidation of these hubs makes the legacy airlines more efficient and competitive.
- Cabin segmentation allows legacy carriers to better compete with Low Cost airlines, while still generating premium RPMs
- Combination of low stock price, free cash flow, and NOLs allow airlines buy large amounts of stock.
- Capacity discipline plus backlogs at Boeing and Airbus mean that good times will last longer than expected
- Bankruptcies have allowed legacy carriers to become more competitive

Despite the similarities, this is very different from the railroad thesis. The thesis looks sound to me, if a bit late.






gfp

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Re: Buffett's Berkshire takes stakes in four major airlines
« Reply #93 on: March 31, 2017, 07:04:50 AM »
Bloomberg has an article on the growing importance of the credit-card / miles portion of the major airlines' businesses -

https://www.bloomberg.com/news/articles/2017-03-31/airlines-make-more-money-selling-miles-than-seats

as an aside, I haven't paid cash for an airline ticket for myself or my family in several years.  someone is paying, I guess it's the banks?

Jurgis

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Re: Buffett's Berkshire takes stakes in four major airlines
« Reply #94 on: March 31, 2017, 08:46:31 AM »
I'm thinking whether I should buy some RYAAY.
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nodnub

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Re: Buffett's Berkshire takes stakes in four major airlines
« Reply #95 on: March 31, 2017, 10:36:37 AM »
Bloomberg has an article on the growing importance of the credit-card / miles portion of the major airlines' businesses -

https://www.bloomberg.com/news/articles/2017-03-31/airlines-make-more-money-selling-miles-than-seats

as an aside, I haven't paid cash for an airline ticket for myself or my family in several years.  someone is paying, I guess it's the banks?

Wouldn't you say that that cost is borne by consumers on average?

Credit cards that earn miles or rewards have higher processing fees than plain credit cards. The increased cost is passed on as slightly higher prices for all consumers.



John Hjorth

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Re: Buffett's Berkshire takes stakes in four major airlines
« Reply #96 on: March 31, 2017, 11:28:25 AM »
Bloomberg has an article on the growing importance of the credit-card / miles portion of the major airlines' businesses -

https://www.bloomberg.com/news/articles/2017-03-31/airlines-make-more-money-selling-miles-than-seats

as an aside, I haven't paid cash for an airline ticket for myself or my family in several years.  someone is paying, I guess it's the banks?

Wouldn't you say that that cost is borne by consumers on average?

Credit cards that earn miles or rewards have higher processing fees than plain credit cards. The increased cost is passed on as slightly higher prices for all consumers.

I agree, if you by all consumers mean the carrier passengers. There are cards out there with no fees at all and built in rewards.
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

notorious546

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Re: Buffett's Berkshire takes stakes in four major airlines
« Reply #97 on: August 01, 2017, 06:17:21 AM »
does anyone have a copy of the stifel nicolaus report which highlights how rewards programs/float like revenue was positive for the airlines?

LongTermView

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Re: Buffett's Berkshire takes stakes in four major airlines
« Reply #98 on: August 22, 2018, 09:50:21 PM »
Priceline founder Jay Walker talks about how the load factor is better today in this https://skift.com/history-of-online-travel/ excerpt:
Quote
At that time when we started, the airlines were flying about two million empty seats a day. There were many more airlines and the industry load factor was probably around 61 or 62 percent, unlike the 87 percent is today. The airlines were flying a lot of empty seats around, which meant there was a lot of perishable inventory but at the same time we knew there was a fair number of people who would fly if they could get the price they wanted.