airline stocks

[White Elephant]

I will probably want to buy some airline stocks at some point in the future, because the industry won't continue to do as poorly as it has. I'd ideally like to buy some index of them (like a DIA for airlines) or mutual fund that specializes in them. Is there a DIA equivalent? If not, any ideas/recommendations for mutual funds?

Thanks.

[PokerBabe(aka)]

The Airline Index trades on AMEX and it's symbol is XAL. Go to Amex.com and see if you can find the contract specifications and components. Babe's pick of the litter is Delta , by the way. It will survive, while UAL may not. Buy Low...LGPG, Babe /forums/images/icons/wink.gif

UAL is like throwing money away, I agree. I think Delta is a fair play, but I like FRNT more, just think the one-hub and lower costs look very attractive. Besides they were making very nice profits before 9/11 and are close to return to profits now with United's troubles probably handing them more business now and maybe a lot more should they file bankruptcy.

If you want a good flier (pun-intended) throw a little money on AWA. While they do compete somewhat with Southwest, they look like a nice gamble simply on their dependence on Phoenix and Vegas, two highly visited tourist and business destinations and you get two of the fastest growing cities to boot with it. This is a nice trend not only for the market, but also the fact that these people move to the cities from somewhere else so they have a high propensity to travel, especially since a big portion of this crowd is seniors. While the financials don't look great now, I think its getting clearer everyday they can survive the day to day battle United and US Air aren't making and as long as another terrorist attack doesn't hit them, they could be a nice 4 bagger pretty quickly as I could see the stock run over some time to near 10 if they turn the corner and make profits.

In the long run, I think airlines are really intended for what you set aside for risky investments. Its just not possible to make much money with this many airlines and the resulting fare wars out there. Everyday it seems some ridiculous fare comes out and it makes me wonder how long it can continue. I admit personally its nice because I travel a lot more than the average person, but still the businessman in me just thinks it can't last. After all quite clearly just about everyone is paying a lot less than we were 10 years ago to fly, but in that time salaries and costs have soared as the unions have negotiated one fat contract after another. Add in the increased cost due to the technology of new planes and even the more fuel-efficient planes can't possibly keep up with the cost inequity. It used to be that an airline could fly a plane half-full and make good money, now unless the plane is full and half the passengers paid full fare, they lose money on the flight. The economics just don't make sense for many of the airlines with high costs and for that reason I would definitely go light on this sector.