Thursday, April 16, 2009

Not sure why AAI is so much better than everything else

I invested in AAI (AirTran) many times because of 3 main reasons. But I still don't really know why it's so much better than all the other airlines in terms of stock performance. (See picture My reasons: It's an airline that is largely recession proof because it services the low-end (and travel is a necessity), price of oil was going down (S&P says it can be profitable with oil at $80), and it has a low cost structure. Ok there's many more, such as the predictability of the stock. It's low price. It's always winning awards. It's ability to expand during a recession. And its current assets is higher than its market cap (although it might not be true as I write).
However, I still don't know how this one airline is so much more superior in stock price performance than all the other airlines especially european ones. Yes there was a bankruptcy risk but they have mobile tangible current assets, so I doubt that. European ones should not be performing that bad considering they had such a big currency advantage in oil, a big part of costs.

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