Open skies accord = opportunity for Ryanair and Boeing
I’ve written before about airline stocks and how outside of index funds I currently don’t own any. I think some like JAL and Korean Air are potentially good investments but even my favorites in the industry carry some risk.
Korean Air gets much higher prices than other airlines since many Koreans are willing to pay more for the service and since once the few less expensive carriers are sold out, Korean travelers have nowhere else to go. They have a good niche; if you want to fly direct from New York to Seoul, you have 2 choices. Korean Air and Asiana.
I don’t know how JAL does it, but they have the best prices and the best service on the New York to Seoul flight. Flight attendants have told me that the flights from Tokyo to New York and then New York to Sao Paolo, Brazil are noramlly full. Full planes ought to indicate good business…
Anyway, this article indicates a major change coming to the airline industry as restrictions on flights between America and Europe will be removed. This should result in lower fares and more competition. But it also means new opportunities for some airlines.
I suspect the big winner here will by Ryanair if they are able to add low-cost transatlantic flights. I can’t imagine these not being extremely popular.
It also looks like Boeing will continue outperforming Airbus thanks the the 787 Dreamliner which is expected to see increased demand due to the new America – Europe routes.