I think in a way, both of you guys are correct.

The market, seeing that the government is committed to doing whatever it takes to protect it in the current, on-going rough patch, is expressing their confidence that in the next 6 - 30 months, the worst should be over.

If Uncle Sam hadn't pumped all that liquidity into the system, and passed the CARES Act, etc, etc, God help us..

 

TransWorld....You are right. Staying in the market is wise. But you would be in a natural low right now but for government interference.
The simple point is this, Alaska Airlines stock price is not an indication of their monetary health and stability. It should be 12-15 dollars a share and Americans should be a penny stock. That would be an accurate view of the airline business. No one is saying stay out of the market just don't base your future plans on the price of an airline stock if you work for that airline.

 

Definitely agree. I would not want to own airline stock right now. If an airline goes through Chapter 11 bankruptcy, how much is that airline stock, out the other end? Zippo. As they used to say, that and a quarter will buy you a cup of coffee.

Remember, Chapter 11 is reorganization, not liquidation. Big difference.

Even Warren Buffett dumped all the airline stocks he held, just a couple of months ago.

On the other hand, if someone feels lucky playing Russian Roulette, who am I to stop them? High risk game.

 

I never own airline stock, ever. Well except for a few hours twice each year.

Having my employment hitched to a wagon that's this vulnerable to large swings (the industry in general, not commenting on specific airlines), I don't see a need to double-down on the exposure by buying stock that could liquidate when I'm furloughed.

I knew all that before this happened, glad to see that Warren finally caught on too

I think airline stocks, such as they are right now, were artificially propped up by the fed... but the fed had good reasons (national economic infrastructure). They might do it again next month, six months after that vaccines should be deployed. Consider if they had not done anything... right now at least four of five legacies would be in Ch.11 or likely even worse, along with some other majors. Deep-pocket private investors would be willing to support a couple majors... but ONLY on the condition that many others are likely to fail, that's the only environment where the risk would make sense. Multiple major failures would leave the one or two guys standing in pretty good shape, even with travel at 30%. That would not be a market-based adjustment, that would be a long-term national economic catastrophe, because other economic sectors do require air travel..

I also agree that the market as a whole is looking forward a couple years, reasonably so, but I'm surprised it's as high as it is. My investment guy wants to meet with us this week... at our house He's never done that before, curious what he's going to have to say.

 

Please follow up with what he says!

 

We go from 71 to 30 Airbus by next Summer (2021) which would mean about 200 mainline aircraft. So in one year to summer 2022 we get 52 planes? That’s highly unlikely. I wish I had that much optimism but there is no way we’re gonna be at 252 mainline planes by Summer 2022.

 

He doesn't have any idea why the markets are so high right now, and neither does anyone else in his professional circles. We're shifting to more conservative positions (that was going to happen due to age anyway, but it's happening faster).

 

I bet you could get 52 MAXes in 12 months if you wanted them. At a big discount too.

 

The Katz Chicken Guy is full of crap. He talked a bunch of s$%& about the union and how the bottom 600 would lose their jobs.

Herrr Derrrr, 12.5 percent!

He was full of it and of himself. Please stop quoting him. Maybe he will go away for good and we wont have to read his idiocy anymore.

Thanks.

 

His furlough prediction may not have come to fruition yet, but ultimately it will probably be accurate if not on the low side, looking at the loads on the company’s website is pretty sad. The company should have awarded all the requested early outs, I think they projected a much more robust recovery than what is going to occur and I think furloughs will be back on the table late this year or early next year, unfortunately.