Aloha Airlines, established in 1946, with service to the West Coast and inter island, announced on Sunday they would no longer be taking reservations for passenger service. Aloha filed for bankruptcy on March 20th for the second time in three years. The blamed the rising cost of fuel and increasing competition for their demise.
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After writing about the coming airline disaster this weekend a reader in Hawaii sent me this story as confirmation of the problems all carriers will be facing in the coming years. They can't see their cost of fuel double every year and continue to do business as usual.
Another reader emailed and asked when we should start buying long term LEAP puts on the airlines. I am not quite ready to take that step yet because the next move by the airlines will be consolidation. Already the majors are talking about mergers that would have been unheard of just a couple years ago. Once the next round of mergers are completed we should be able to pick out the stragglers as easy pickings for LEAP puts. Those airlines without lots of cash and a niche market are going to be fighting the merged monsters. Those merged giants are going to eventually end up nationalized and we don't yet know how that will play out.
I always appreciate your emails with news stories that may appeal to everyone. Send them my way and I will try to get them posted.