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It’s a Good Time to Invest in Airlines, But Not One to Be a Low-Cost Upstart

Excerpt from The Street

Dec 26, 2013 5:00 am

Skift Take

This is great news for the legacy carriers, and it doesn’t trend nicely for consumers because airfares could take off.

— Dennis Schaal

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It is the single best time ever to be in the airline business because of a dramatic decline in competition and I can’t emphasize enough that you need to invest in this area that I have formerly found to be totally uninvestable…

Previously, when we have had these combinations [like US Airways-American],they ultimately ended badly for shareholders because discounters came in to compete and ruin the margins.

But this time there are many things working against the potential discount entries. First, they need new planes and the lines for planes from Boeing (BA) and Airbus are ridiculously long. You can’t get a Dreamliner until 2020 and the queue for the 777 is already beyond the reach of a startup.

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