Is Now the Time to Buy US Airlines?

Airlines have been terrible investments historically. In the last two decades more than a dozen of the biggest US carriers have gone bust, thanks to one or more of high fuel prices, terrorism, or simple competition.

No investor ever lost our by avoiding the airline sector. Today I ask, is now different?

The argument that the world has changed is two-fold: Firstly, the threat of new competition is receding. New players can't get finance, and even if they could get finance they couldn't get planes. Secondly, existing carriers are not adding much capacity to the US market - meaning that pricing should be robust. Finally, valuations relative to the market are near all time lows. This combination of positive earnings trends and low prices offers real opportunity to investors.