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Airlines Crash and Burn

Posted June 3, 2008

“The airline industry is long overdue for some serious consolidation. And it’s finally beginning to happen.” — Andrew Gordon

by Andrew Gordon

Baltimore – (TFN): We’ve predicted it a few months ago. The airline industry is a mess.

Things are so out of whack that one airliner, American Airlines, principal subsidiary of AMR Corp (AMR: NYSE), announced last week that it was going to charge for the baggage that passengers check.

Two things are obvious here. One, American thinks they’ve raised prices as much as they can without causing customers to bail out on them in droves. Two, they’re either clueless or clearly out of options.

The airline industry is long overdue for some serious consolidation. And it’s finally beginning to happen.

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In April, Delta (DAL: NYSE) and Northwest (NWA: NYSE) decided to hook up. And now talks are heating up between United Airlines, principal subsidiary of UAL Corp (UAUA: NASDAQ) and Continental (CAL: NYSE).

But despite all the time airlines have spent in and out of bankruptcy, it’s still the same old talk about cutting costs, cutting corners and raising prices when the market allows. Read on to learn a real solution (and a buy signal) for the airline industry’s problems.

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Posted by Andrew Gordon · Filed Under US Stocks and Markets 

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