Straightening Up and Flying Right

Warren Buffett once said that if a "farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville [Wright] down." He also quipped, "How do you become a millionaire? Make a billion dollars and then buy an airline."

Buffett's jibes are well targeted. The airline industry, at least since it was deregulated in the late 1970s, has not been known for its financial successes, but more for Chapter 11 bankruptcy filings and mega mergers. In mid-February, for instance, American Airlines parent AMR Corp. and U.S. Airways Group (LCC) announced they would merge, creating the nation's largest airline. To anyone who follows the airline industry, this was not a surprising move. American merged with TWA in 2001, Delta (DAL) merged with Northwest in 2008, United Continental (UAL) merged with Continental in 2012 and Southwest (LUV) bought AirTran Airways in 2010. And American's current bankruptcy proceeding is nothing unusual. Every major American airline except for Southwest has visited bankruptcy court at least once over the years -- and U.S. Airways has done it twice....282 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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