[mint2]

Objection!

It’s true investing in the airline industry has been a good way to lose money for a long time.

But citing early post pandemic years to make that point feels misleading.

It’s like saying someone drives badly and instead of pointing to their speeding tickets, it’s like pointing out their car is in the shop with body damage… from a falling tree branch.

All travel was shut down for a while and when it opened up business travel was nonexistent. It’s still down and expected to never return to prepandemic. It’s amazing they made any profit in 2023.

Yes, airlines are not highly profitable but pandemic years are a terrible example due to being a weird black swan event.

[lotsofpulp]

>But citing early post pandemic years to make that point feels misleading.

Which years should they cite to avoid misleading others?

https://www.macrotrends.net/stocks/charts/UAL/united-airline...

https://www.macrotrends.net/stocks/charts/DAL/delta-air-line...

https://www.macrotrends.net/stocks/charts/AAL/american-airli...

https://www.macrotrends.net/stocks/charts/LUV/southwest-airl...

https://www.macrotrends.net/stocks/charts/ALK/alaska-air/pro...

https://www.macrotrends.net/stocks/charts/HA/hawaiian-holdin...

https://www.macrotrends.net/stocks/charts/JBLU/jetblue-airwa...

https://www.macrotrends.net/stocks/charts/SAVE/spirit-airlin...

[mint2]

Those graphs all show a giant anomaly.

Cite pretty much any other year than the giant anomaly?

I don’t understand what the point was to linking those graphs, they self evidently answer the question.

Like the graphs all clearly show the giant anomaly period that was cited.

[lotsofpulp]

saas_sam wrote that the airlines have very small profit margins.

Your post implied that the data saas_sam presented did not establish airlines had very small profit margins.

The macrotrend links in my post show airlines have had very small profit margins for many, many years.

[mint2]

… okay so yeah yes um ahem. Ahh.

reread my first and last sentences a couple times in the first comment. Perhaps try asking an LLM to weigh in on what the comment meant.

[selectodude]

That’s true. Their most profitable year in recent history was 2015, when they had a net margin of 5 percent, or about $10.00 per passenger.

https://www.iata.org/en/iata-repository/publications/economi...

[pnutjam]

I'll bet there are a ton of people making pretty good salaries and bonuses before profits.

[selectodude]

They’re called “pilots” and they fly the plane. The other bonus goes to the jet fuel.

[pnutjam]

There are a ton of executives too, which might be an issue. As for the workers (including pilots), the should abolutely get paid. I'm just pointing out that "profits" does not show the big picture. Companies have a duty to their employees & customers; as well as their owners (shareholders). Low profit is heralded when it's Amazon, reinvesting in the company. Airlines are also investing back in the company.

[lotsofpulp]

Profit margin does show the picture for how profitable a business is. Employees’ pay, including executive, is irrelevant. They are still employees.

Unless you are claiming malfeasance and that shareholders are being fleeced.

An entire industry with low single digit profit margins amongst multiple of competitors indicates a very optimized business. It means the only way you can reduce prices for customers is to come up with a novel way to execute the business, such as new technology.

Profit margin at businesses that have high barriers to entry and low costs to scale are much higher. See software, real estate, pharmaceuticals, finance, etc. And again, the executive pay is irrelevant since publicly listed businesses have shareholders paying attention to that kind of waste (for the most part).