- Airline valuations are incredibly low but the risks are also high, especially if a recession arrives.
- Demand fell by 20% and stocks fell by more than 90% in 2009.
- The global long term outlook is very positive with demand expected to double in the next 15 years.
In his 2007 letter to shareholders Warren Buffett stated that airlines are the worst sort of business because they require significant capital to engender growth and earn little or no money. He continues that creating a durable advantage has been elusive since the days of the Wright Brothers and even concludes that “if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.” More →