Tuesday, September 28, 2010

Crappy investments: Airlines

I haven't been flying with Finnair for a while and noticed that they have reduced their service in the intra-Europe flights to the level of a low cost airline (give or take a sandwhich). However, their ticket prices still ain't in the same ballpark, which leads me to believe that they have basically given up the competition in those routes and are only flying them to feed their long distance routes to Asia. Why in the earth would anyone want to pay 30-50% premium for flying with them? Better service (definitely not this time)? Better pilots? (I do not think so)

Next time I pick a low cost airline. That will also save the money of my employer. I guess they have airmile cards too..

Airlines in general are crappy investment due to cronic overcapacity in the business. Apart from a few airlines most of them are running on losses. I don't touch them even with a very long stick. But for some reason new airlines emerge and the old ones don't seem to have trouble attracting capital. Beats me..

Talk about business that has need for high CAPEX, generates tons of CO2 and is utterly dependent on cheap oil.. They will get really screwd over long run..

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