Free Attention All Passengers by William J. McGee Page A

But Buffett won’t make the same mistake twice: “I have an 800 number now which I call if I ever get an urge to buy an airline stock. I say, ‘My name is Warren, I’m an air-aholic,’ and then they talk me down.”
    Former American Airlines CEO Bob Crandall maintains investors and airlines are simply a bad match: “No, you can’t make money in the airlines. You can trade. But from an investment point of view, they’re a catastrophe. They always have been a catastrophe.” He’s echoed by legions of analysts, journalists, and everyday investors. As columnist Joe Brancatelli noted on Portfolio.com: “Say whatever else you will about airlines, but one fact is incontrovertible: They make lousy investments. For about 20 years, give or take a quarter or two, only the shorts have profited from airline stocks.”
    And with credit ratings, Airlines for America points out that no passenger airline—even the most efficiently run—enjoys a rating of A- or better:
    Southwest                  BBB-
    Alaska                       BB-
    Allegiant                   BB-
    Delta                         B
    United                       B
    American                  B-
    JetBlue                      B-
    US Airways               B-
    As for these titanic losses, economist Severin Borenstein says, “The legacy airlines do not have a workable business plan. And they compensate by using their power to fence out competitors and continue to sustain high costs. In some cases they don’t have the management capability and in other cases they don’t have labor union cooperation.” He adds, “We are seeing a trend of legacy airlines entrenching long-run.”
    But there is one notable exception. In an industry known for burning through barrels of fuel and barrels of red ink, Southwest Airlines has consistently, reliably, and repeatedly done what no other U.S. air carrier has managed to do since Richard Nixon was president: make money. At the end of 2010, the Dallas-based company marked its thirty-eighth consecutive year of profitability.
    Others have made a comfortable living betting against airline profitability. As one major airline CEO points out, “There’s a dirty little secret about industries such as this one. There are always people who profit and benefit from dysfunction.”
    Grounded Forever: Airline Bankruptcies and Shutdowns
    In late 1991 I left the airline industry for good after the Pan Am Shuttle was sold to Delta and Pan Am itself succumbed; that same year saw the shutdowns of two other major domestic carriers, Eastern and Midway. That fall I applied for unemployment insurance and traveled to the New York State Department of Labor office in Flushing, Queens, close to both LaGuardia and JFK airports. I soon found that in order to expedite our claims, there were two lines in the office; one handwritten sign read PAN AM & EASTERN and the other sign read ALL OTHERS .
    Since deregulation, bankruptcies have become ubiquitous in the airline business. According to Airlines for America, there have been 189 bankruptcy filings just since the deregulated era began in 1979. The A4A points out that prior to 1978, bankruptcies were “extremely rare,” with the CAB arranging “marriages” between failing carriers such as Northeast and surviving carriers such as Delta.
    Over the last two decades, most major domestic airlines have passed through Chapter 11 reorganization, including