Airlines

A picture is worth a thousand words.

Here's a 10 year chart of the airline index. During the period, the high was 182.93. It closed yesterday at 16.51. Hold it there....I'll do the math for you. The index has lost 90.974689772043951238178538238671 % of its value. You can round that up to 91%.

High oil prices have decimated this industry.

How funny, I'm listening to last night's Gary K now. His guest, Scott Bleier, is saying that Wall Street is bidding up oil/gas (this happens to be a coincidence!). I believe that. Engdahl's work supports that statement (specifically his discussion regarding unregulated trading) in addition to the testimony before Congress by the hedge fund manager who stated that the 'demand' created by the flood of investment dollars into oil is creating a false bid for oil that is not linked to supply.

Personally, I think that Wall Street's trying to make a buck off of everything is getting a little out of hand. Free markets! Capitalism! Minimum Government Intervention! I will go to my grave remembering that this phrase: "The business of Wall Street is to put the money in the pockets of many into the pockets of a few." I think that Stan Weinstein said it, but I cannot be sure.

Scott Bleier also felt that there would be a backlash against Wall Street as they continually kill the goose that lays the golden egg (junk bonds, dotcom, CDO's, derivatives). Frankly, I'm getting sick of it.

Back to airlines----this chart is a dire, dire chart. But where there is woe, there is opportunity. With airlines reducing capacity people are going to travel less. That hurts the travel industry, certainly. BUT, business travel is really the meat and potatoes of airlines. Business are going to be hurting due to recessionary pressures. Travel is one of the first things to go. BUT, you still have to do business.

Though I've done NO research on this, I would imagine that with the improved capabilities of the web to handle media, that business will look to make investments here that will pay off with improved connectivity and reduced travel. My last company installed some of this equipment. That was 4 years ago. I was not impressed with either the quality or reliability, though we bought a good system. But 4 years is an eon in technology time. I know that Cisco has capabilities here. I may sniff around and report back. For the moment. I'm just slapping an idea against the wall. I've not seen anybody really talk about this though it is a rather obvious point to my eye.