9 Jun 2009
Statement released by Barclay’s “Airlines Analyst” Gary Chase regarding investing in airline stocks. Pardon me, but I seem to have a need to keep interrupting him.
“Over the last several months, the airline industry has been subject to more than its fair share of challenges.”
No. Its fair share. What’s unfair is that the industry cares about revenues, not the humans who buy the tickets and create the revenues. The heck with the people who pay the bills, eh?
Ask the auto industry if that’s a good “business model.”
Note to big airlines. Give us something. Anything. An Experience worth smiling about.
“The only up side to such a series of challenges is that expectations are low,”
PAINFULLY SO.
“and in our view, the risk-reward in the equities skews heavily to the upside.”
So once you completely tank, then you’re finally attractive to somebody. To Gary Chase, at least.
Or you could just do it right?
Then Gary and I would be able to agree. Skew the Experience heavily to the upside and everybody wins, not just the buy-painfully-low sell-not-quite-so-pitifully-low crowd.
Grow and be well,
Kelly Erickson
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12 June 2009, 8:55 am
Many airlines are like that restaurant on the corner that is still fairly busy, but the business has gone stagnant and the ennui-filled staff are running the joint. Best thing to do is get new management, wipe the staff slate clean, and start again.
If only it t’were that easy.
~Graham
12 June 2009, 10:56 am
You could almost replace the word “air” with “banks”… or generically “business”, in many cases.
When you see increased service fees, reduced service, mounting layoffs, and yet the payout to the shareholders continues to grow… well, you know what they care about, and it isn’t the people who are actually giving them the money in the first place.
But this is okay. Any big business (or small business) willing to put the customer first will stand out. And I will buy from them.
15 June 2009, 4:22 pm
Don’t get me started on the interest in money over customer service/quality – I think the music and publishing industries are good examples of this. Publishers don’t want mid-listers – they would rather invest more money in one person who will sell big quickly instead of nurturing the careers of people who will sell over a long period. The same with corporate rock/pop.
I think if companies could look at the long term instead of only the short term gains everyone (except the 2 year contracted CEO’s bonus) would win.
Alex Fayle | Someday Syndrome’s last blog post…Make a Decision, Any Decision: Lea Woodward Interview
16 June 2009, 7:25 am
Graham,
If only. What is the magic formula, where some big businesses can still remember what it was like to be a little guy? ‘Cuz these folks surely need it.
Brett,
Every few years someone announces that we’re now entering The Era of the Customer, and I just heard it again this past week.
1. It’s always the era of the customer, so you’re right, folks who are willing to put the customer first will stand out;
2. This time I think there might be something to it. So many consumers are mad as hell and they don’t want to take any more.
Alex,
Ah, that’s another interesting example, one I’ve been thinking about a lot lately. Especially, what to do about mid-listers. Hmm, hmm.
I agree, focus on long-term is so necessary in these big industries, but lordy that’s a sea-change for the focus of these “quarterly results” shouters.
I just heard about one Dow component who isn’t going to announce quarterly results anymore so they can focus more long-term (wish I could remember who). That’s a great start—and it’ll teach investors to see the company in broader terms, too.
Regards,
Kelly