Ray Neidl raises his rating on AirTran

[Andy]

I would think that someone from United would be a little more worried about his own stability than others. UAUA is looking at almost 400 million loss this quarter and almost 900 million loss for the year. AAI is lookin at about 25 million loss for the quarter and about the same for the year. That kind of loss could put UAUA into a pretty poor cash position. Maybe you should short your own stock.

I've got enough outside of flying to not worry about this stuff.
Did you miss that I'm short financials? They have a better medium term risk/reward than airlines. I don't get emotional when it comes to investments; it's a great way to lose money.

You guys are sounding just like the Frontier guys a couple of weeks ago. I'm not the one that dumped more than 10 million shares of your stock on Friday. Looks like your stock had a lot of put action also.
Since you guys think that AAI is such a good investment, why not use this as a huge buying opportunity? Have the balls to put your money where your mouth is.

 

[Secret Squirrel]

I've got enough outside of flying to not worry about this stuff.
Did you miss that I'm short financials? They have a better medium term risk/reward than airlines. I don't get emotional when it comes to investments; it's a great way to lose money.

You guys are sounding just like the Frontier guys a couple of weeks ago. I'm not the one that dumped more than 10 million shares of your stock on Friday. Looks like your stock had a lot of put action also.
Since you guys think that AAI is such a good investment, why not use this as a huge buying opportunity? Have the balls to put your money where your mouth is.

Only an idiot puts any amount of money in his own companies stock let alone buys airline stocks. A United pilot would know the folly of that.

 

[Mr.B]

Only an idiot puts any amount of money in his own companies stock let alone buys airline stocks. A United pilot would know the folly of that.

Uhhh, that was Andy's point, no?

 

[PCL_128]

Since you guys think that AAI is such a good investment, why not use this as a huge buying opportunity? Have the balls to put your money where your mouth is.

Not even Warren Buffett was successful in airline investing. If he can't do it, I don't dare try it.

 

[Andy]

Uhhh, that was Andy's point, no?

Correct, which is why I can't understand why these guys are so defensive about their stock prices.
Hell, when I shorted the crap out of Countrywide and Downey Savings, I didn't have their employees giving me a hard time on other message boards about shorting their stocks. And yes, I do go to message boards to pick up company information - it can be very valuable.

None of this is personal; I invest to make money. In this case, I was merely trying to give an unbiased opinion of a stock. And no, I'd never buy an airline stock.
I think that UAUA is also a dog even though I hold 1.3 or so shares of the stock (post-BK distribution; Computershare commissions would leave me with $10). I don't even think that airlines are a good short because they're so crowded. If I were to short an airline, it wouldn't be AAI; not enough meat on the bone. I'd rather go after CAL since they've got a lot of aircraft deliveries coming up and I don't see where they can pare down their fleet easily. It's all about liquidity. To paraphrase Seinfeld, "Liquidity now!"

 

[spinproof]

"Other than PCL128 Airtran looks solid"....quote from Warren Buffetts play book!

 

[SkiFishFly]

I'm just a dumb pilot...

But if AAI's cash position increased by about 30 million in the first quarter...
Then, wouldn't they be expected to post a profit for that quarter?

How does a company increase it's cash position without making a profit??

Andy - you seem pretty smart on this stuff - help me understand.

 

[CitationLover]

But if AAI's cash position increased by about 30 million in the first quarter...
Then, wouldn't they be expected to post a profit for that quarter?

How does a company increase it's cash position without making a profit??

Andy - you seem pretty smart on this stuff - help me understand.

because profit/loss can involve non-cash transactions and accounting methodologies (depreciation, etc.).

another airline trick is the old "fare sale". by selling tickets cheaply for later in this year, when the lower yields will be actually recorded, the cash position is increased today.

 

[Andy]

But if AAI's cash position increased by about 30 million in the first quarter...
Then, wouldn't they be expected to post a profit for that quarter?

How does a company increase it's cash position without making a profit??

Andy - you seem pretty smart on this stuff - help me understand.

There are a lot of shell games that can be played, as CitationLover's pointed out.
I am suspicious of the press release since their figures included long term investments, so we can't really say for certain how much their cash position has changed.. There's nothing liquid about long term investments.

Another way to get cash is to take out a loan against some of your assets, so you've really got to wait until the 10K, or in this quarter's case, the 10Q to say be able to say where the cash came from.

And profitibility isn't the big issue with airlines right now; it's a secondary concern. It's all about cash on hand.

One of the reasons why I'm concerned about Airtran is that they are continuing to take aircraft deliveries. That costs money. While their cash position's OK, it can be burned through very quickly if you take delivery of a few aircraft. I'd have a better feeling about them if they were staying flat or shrinking their fleet plan.
Right now, there are several airlines betting that the recession is going to be short and shallow. With looking at the worldwide credit problems, that seems unlikely.

 

[PCL_128]

Andy, nothing in the press release listed long-term investments as part of the cash/equivalents total. Only short-term investments are included. Also, we're only taking delivery of two more airplanes this year. We're at 139 right now, and we'll be at 141 by the end of the year according to the last 8K. Two deliveries will not be a major drain on cash at all.