The chronically troubled airline industry has been a frequent topic on this blog over the years. Even as savvy an investor as Warren Buffett swore off investing in the airlines long ago. After a particularly distasteful experience in an airline investment back in the late 1980’s, Buffett observed that if you calculated all of the airline industry’s finances since the day the Wright Brothers flew the first plane at Kitty Hawk in 1903, you would discover that the airline industry has cumulatively not made a single penny of profit.
That led Mr. Buffett to suggest famously that, in hindsight, shooting down the Wright Brothers on that beach would have been a reasonable financial, if not moral, move.
However, Buffett’s observations aside, when Larry Ribstein gets to the point where even he cannot figure out the structure of a solution to the mess of the airline industry, my sense is that this is an industry that is in serious trouble.
By the way, Professor Ribstein’s feelings toward air travel these days are the same as mine.