« The Knucklehead of the Day award | Main | Happy Tax Day! »

Business Update

Click the below link for musings about the Delta - Northwest airline merger.

Having destroyed the steel and auto industries, labor unions for all practical purposes have eviscerated the domestic airline industry.

With two exceptions the airlines simply can't get their acts together -- regardless of consumer demand and regardless of public subsidies. Combine heavily-unionized workforces with persistently-high costs of raw materials (jet fuel) and you've got a recipe for a business train wreck.

Not until we have two and only two national "hub-and-spoke" carriers plus Southwest and JetBlue (for point-to-point travel) will the airline industry attain a measure of sustainable health. Along those lines it goes without saying the Delta - Northwest merger will spur additional consolidation. United and Continental would be a logical pair.

On the investment front I wouldn't touch the common stock of an airline with a 10-foot pole. Cheap companies in non-union industries (e.g., banking, pharmaceutical) are the tickets to make money in stocks over the long term.


TrackBack

TrackBack URL for this entry:
/cgi-bin/mt-tb.cgi/29240.

The comment section for this entry is now closed.


Advertisements









rightads.gif

beltwaybloggers.gif

insiderslogo.jpg

mba_blue.gif

Follow Wizbang

Follow Wizbang on FacebookFollow Wizbang on TwitterSubscribe to Wizbang feedWizbang Mobile

Contact

Send e-mail tips to us:

[email protected]

Fresh Links

Credits

Section Editor: Maggie Whitton

Editors: Jay Tea, Lorie Byrd, Kim Priestap, DJ Drummond, Michael Laprarie, Baron Von Ottomatic, Shawn Mallow, Rick, Dan Karipides, Michael Avitablile, Charlie Quidnunc, Steve Schippert

Emeritus: Paul, Mary Katherine Ham, Jim Addison, Alexander K. McClure, Cassy Fiano, Bill Jempty, John Stansbury, Rob Port

In Memorium: HughS

All original content copyright © 2003-2010 by Wizbang®, LLC. All rights reserved. Wizbang® is a registered service mark.

Powered by Movable Type Pro 4.361

Hosting by ServInt

Ratings on this site are powered by the Ajax Ratings Pro plugin for Movable Type.

Search on this site is powered by the FastSearch plugin for Movable Type.

Blogrolls on this site are powered by the MT-Blogroll.

Temporary site design is based on Cutline and Cutline for MT. Graphics by Apothegm Designs.

Author Login



Terms Of Service

DCMA Compliance Notice

Privacy Policy