After spending five weeks in Dayton, OH, the return flight this past Friday from Chicago was an eye opener as to the current state of the airlines.
I was on TED, which is United's low cost carrier, reading a book and relaxing.....kinda. The beverage cart began it's first trip through the cabin shortly after takeoff on the 3 1/2 hour flight from Chicago back to Phoenix.
With the exception of dirty floors, a delayed departure, and an overall nauseous feeling from watching the majority of overweight guests scarf down McDonald's during the safety video, I guess it was business as usual.
The flight attendants were very nice; but I happened to notice they were only pouring beverages into the plastic airline cups, and not providing the whole can. Just for fun, when it was my turn, I asked for the can. The flight attendant responded that she had been instructed NOT to give the whole can, even if a passenger asks for it. Although there are certainly bigger tragedies in life than not getting the entire can of ginger ale on a flight, I guess the larger issue with the airlines hit home, which is why I don't invest in them.
Considering inflation and rising oil prices, how can they afford to offer a ticket under $200 round trip? The answer......they shouldn't be, which is why many carriers have filed for bankruptcy protection. If they are so squeezed as to not provide a $.25 can to a paying customer, why don't they just charge more upfront? I guess anyway they can save a buck helps the bottom line; however, it seems like an unreasonable tradeoff in my mind.
Even an airline like Southwest (LUV), which continues to do very well despite overall industry troubles, may have a hard time in the future when their oil hedges run out. In my opinion, there are just to many problems affecting the industry in a negative way that I don't see going away.
In the words of former Virgin Atlantic Airways owner Richard Branson when asked the best way to become a millionaire, he responded: "Start as a billionaire, and then buy and airline."