Quote:
quote:Originally posted by Major von Tempsky
Cave. Cave. Caveat emptor.
Read the appendix at the back of Buffettology. Airlines are listed as a commodity stock i.e. low or no barriers to entry, undifferentiated product, heavy price competition. Buffett avoids them like the plague.
How many airlines have you seen hit the wall in the US and around the world?
Air NZ will be ruthlessly crunched by Qantas and low cost operators just as RyanAir etc etc have deflated British Air.
I received some stuff from J B Were advocating buying Air NZ about a month ago. I laughed. I'm laughing harder than ever - co-operation with Qantas out the window, cash issue coming up, gloves off with Singapore Airlines, competitors girding up.....
I think I might frame the J B Were letter and hang it on the wall for reference at dinner parties for a good joke....
I am not so sure about "low or no barrier" to entry. New airlines have great difficulty in picking up a landing slots especially in Japan. There are no domestic discount fliers in Japan as they can't get landing slots and the govt. is protecting the current operators. Not suprisingly flying domestically is pretty expensive.