Originally Posted by
Jaa
Sure, but dividends just make the case stronger. With 5 year returns of over 200% and 300% why do you still say never to invest in airlines?!?!
Have you swapped your stripes for Buffet's spots and gone into his "never invest in airlines" cave??
There are substantial barriers to entry for new competitors as Air Asia X, Jetstar in NZ and Norwegian prove. Plane production is limited in the medium term as are pilots, engineers and now even engines. Plenty of short term risks that can trip up under funded or unlucky new entrants (Kiwi Air, Origin Pacific etc). And of course strong demand growth that has continued for decades as per seat costs fall.
Top brands with captive and rational home markets like Air NZ, Qantas and the US big 4 have proved resilient and attract the best employees and customers. They are like the Apple of their respective markets earning the majority of the industry's profits compared to the budget airlines that get left over crumbs just as Android manufacturers do.