Originally Posted by
ToiletDuck
I was asking because I wasn't sure about their plans. Why is it any better to pay money to rent a plane when you could pay money to own it? You're going to bleed that cash out anyway. It's like renting a home vs. owning. You can put the same amount of money into something you own. Usually renting is more expensive. My guess is CAL likes the paycheck. Perhaps someone will find it in a financial statement somewhere. I bought XJT on a hunch. I'm not sour about it at all and there's no reason to sell it with it being so low. Like I said I'm still doing well overall. However the market is at high tide and yet XJT keeps sinking more. If it can't make money now with everyone in the industry making money then it's future doesn't look too bright. Of course things can change in the drop of a hat and I hope they do. FYI I only have a couple individual stocks. My per diem checks go into index funds. When the market took a dive a month ago I bought the Brazilian one and have made over 20% since then. No idea how long I plan on holding onto that one. It's my 401k that's just making me want to toss up in my mouth. I thought those people were suppose to be good.
Its better because it provides flexibility. I'm sure CAL enjoys the pay check and I'm sure XJT enjoys the flexibility leasing provides. At this stage of the game, the name of the game for XJT is cash flow. And the more liquid you can keep your assets the better. A little more expensive, yes. But a hell of a lot easier to work with. Can you borrow against an asset, yes. But now all that money I "saved" buying vs. leasing is lost in interest expense from those loans I took out that were secured with aircraft. It's how a lot of the airlines ended up in horrible D/E positions the last few years. Remember, a $20 million airplane is not worth $20 million. It's only worth what you can sell it for.
As far as the stock being down, its not just XJT. The entire airline industry has been sliding which is not hard to figure out when you look at oil prices and the hints of recession floating around out there.
And FYI, in 2006 (the last period that data is available) XJT spent $332,441,000 on aircraft leases. That works out to about $100,000 per aircraft per month. I'm surprised you invest in individual stocks if you don't know how to find and read a 10-K report.