I see many in the forum mention they like airline stocks. Now Im not a stock analyst, i do day trade and in my past I did spend inordinate amounts of times reading earnings transcripts and trying to understand fundamentals. I remember reading a lot about the airlines when they first began becoming profitable. (they operated at a loss for a loooonnngg time- so again Im not an expert just a guy sitting in my living room BUT I think I would rethink the airline plays. First off - Covid- There are a number of people who are going to be unwilling to sit in a tube for hours with a mask on. So that may drive down volume somewhat but the biggest reason I wouldnt touch them is business travel is a major part of their business and that landscape will be changes somewhat significantly. Now that the world has discovered Zoom I think the volume of travelers will decrease significantly. To say it will be cut in half is most likely an understatement. Im willing to bet 75-80% of businesss travel will be moved over to Zoom.
Now if Im right how are airlines going to compensate for this?? They will raise prices significantly. Expect airline tickets to double if not more. This will price out many willing travelers. Which in turn will hurt volumes even more. It will also hurt profitability and will lead to fewer flights and I'd bet it forces consolidation within the industry and a few players will be left out of that party and I bet go under.
Again I could be wrong its just a scenario I see potentially playing out.
Sharp & Fellows Inc. has been in business as a railroad contracting company since 1877. Specializing in railroad track construction, maintenance, inspection and lubrication, design, demolition, and special projects. Our main goal is to continue to exceed all customer expectations and railroad service needs. With two locations to better serve you in Los Angeles and San Bernardino, our company is the right one for you.