I HATE Airlines, but Investors Should Buy Em’
This past week, I flew from Miami to Frankfurt overnight. There’s nothing like being squeezed into a flying trash compactor for eight hours, wearing an N95 mask, entirely uncomfortable and unable to sleep.
I can’t think of another industry that treats its customers like cattle role-playing as sardines and still literally fill every seat.
I flew on a German airline. I don’t want to name names, but let’s say it rhymes with “Costanza.”
I was aboard a Boeing 747. That’s a big plane; it should have some room for passengers, right? Well, let’s see what Costanza airlines says about that:
“The legroom in the economy class has a dimension of 71 cm, which equates to 29.1 inches. It is a reasonable space for passengers traveling in that specific class.”
Oh, really?! Define reasonable?
Sure, I know I’m a big, fat guy. But even the gentleman next to me who was NOT a big galoot like me, was squeezed so much that he couldn’t unfold his tray table all the way.
He was a nice fellow and taught me several Yiddish descriptors for our seating situation, which I have since forgotten because I was sleep deprived. He also described Costanza Airlines’ explanation for why the in-flight entertainment worked intermittently or not as all as “schmegegge,” and I liked that one so much I wrote it on my hand.
Here's a fun fact: During the Golden Age of Flying — back in the 1950s and 1960s — the average passenger had about 6 inches more leg room than we have today.
Comparisons break down because now we have economy, economy plus and business class … and any upgraded passenger designation is getting more room by squeezing basic economy class smaller and smaller.
I don’t want to say it was a tight squeeze, but I think I heard Luke pleading with C-3PO to shut down the garbage compactor on the detention level. Ba-dum tsss!
Anyway, if you go back even further to 1940s, planes were so much more primitive, right? WRONG! Passengers aboard a Boeing Stratocruiser not only had more legroom, but their seats also reclined into beds! Beds!
When the snoring behemoth in the seat in front of me put his seat back, my TV screen — frozen on a scene of “Spider Man: Far from Home” — got shoved right in my face.
Since he put his seat back, I had to put my seat back. The entire economy section put their seats back in a wave, falling like a row of dominoes.
If you think passengers can look for help from the Federal Aviation Administration (FAA), think again. No matter who’s in the White House, they appoint corporate insiders to oversee the agencies that supposedly regulate industries.
The latest head of the FAA was a former Delta Air Lines (DAL) executive. Do you think he was going to be hard on his buddies?
That guy quit, I believe, because of the massive headache of airlines dealing with pandemic masking and unruly passengers.
They say unruly passengers are on the rise for a variety of reasons … gee, I wonder why. I’ll give you a few very specific reasons. You’re jamming more and more people into a tighter and tighter space all the time. OF COURSE, people are going to go crazy and act out! It’s not rocket science.
Now, it sounds like I’m trashing airlines. Maybe I am. But I say it with the grudging admiration you’d give any cabal — like energy and healthcare, two other oligopolistic industries which choose profits over people.
Do you think I’m being too hard on industry executives? Ha! There’s an old Irish saying, “Most people don’t get what they deserve. And they should be very glad for it.”
Squeezing Passengers, Squeezing Profits
That goes double for airline industry executives. In fact, I expect airlines to squeeze more and more profits out of suffering passengers. And that’s why I suggest you consider the U.S. Global Jets ETF (JETS).
It holds a basket of the biggest airline stocks, has an expense ratio of 0.6% and should do very well as airline stocks go higher.
Looking at that weekly chart, you might be thinking, “Sean’s got altitude sickness. That ETF has been sliding for more than a year.”
Yeah, well trends change. And airlines are roaring back.
For example, Delta recently announced it expects revenue to return to 2019 levels this quarter despite higher fuel costs.
How is that possible?
Easy. They’re squeezing it out of you and me. Literally and figuratively.
If you’d like my specific stock picks, consider joining Members of my service, Wealth Megatrends. They’re currently sitting on open gains of 109.82%, 57.37% and 35.42%.
If you’re doing it on your own, always conduct your own due diligence before entering a trade.
Look, I’m not saying I like airlines. But I respect their profit obsession. They’ll do well for investors. And you might want to board the flight to profits.
All my best,