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CNBC still hot on airline stocks

CNBC keeps noting that airline stocks may be a good buy for 2010. Delta and United were the top two picks and have the potential to increase 50%. They are cautious on Southwest (LUV) due to the fact of increasing ticket prices that will try to absorb non fuel related costs.

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Air fare sales, London Heathrow, Dubai cursing rage

I will be quick since I am hitting the airlines today to PHL.

AirTran and Southwest are reducing fares by $25 for travel between now and through the winter. Blackout dates apply, but it’s a good sign that lower fares are to stay for a while. Watch for competitors to match. Maybe Delta?

London Heathrow was voted as the crappiest airport in the world.

An Australian man who cursed out an undercover cop at Dubai Int’l airport is in custody in Dubai. He most likely will get a slap on the wrist and can’t return to Dubai for three years, but some reports say he could be facing jail time.

cutting costs, fix the planes abroad, are we safe?

It is probably not any surprise to us, that many of the U.S. commercial airline fleet sends maintenance work done abroad. Given the financial crisis, high fuel prices, and an uncertain future, makes it obvious that the airlines are struggling. So, they look to cut costs. One way the do this comes in the form of sending planes abroad for maintenance work.

Usually, the maintenance work is considered “heavy.” This means they strip the airplane down to the bare metal, fix what needs to be fixed, and put it back together again. A maintenance group in El Salvador, Aeroman,  does this for airlines like jetBlue, Southwest, and US Airways. The airlines claim the company does a good job and is approved by the FAA. Heck, it is all in the numbers right? If a typical mechanic in the U.S. makes $52,000 and an Aeroman mechanic makes $10,000 a year, well, there you go; it saves the airline a lot of money.

But, are we actually safe? Do the folks at Aeroman really do a good job? Do the maintenance companies in China who maintain some of United’s fleet do a good job? So far, the answer is yes. However, as is typical in aviation, it usually takes a disaster or major incident to figure out what is  really going on. That is my concern here: will it take an accident to figure out whether sending airplanes to developing nations is worth it?

For now, I think we are all safe. The FAA oversees what is going on. But as airlines continue to lose money and look to cut costs, I think oversight from the FAA and the airlines may get sloppy and something may happen.

Southwest comes to Panama City…….Florida

A new city for SWA and some revenue guarantees from local officials.  I won’t get into the details, but more or less, if Southwest reports a loss in the market, they will be compensated for their loss.

Any guesses as to where they will go? I’m guessing MCO? BWI? MDW? Good grief, I have no clue.

Good luck, I hope they can successfully bring in some folks to one of the tackiest, depressing places on earth.

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