The 25 U.S.-based passenger airlines booked $25.6 billion in profits in 2015, more than three times the 2014 figure. Fares and fuel prices are down. Everybody’s happy, right? Well, not so much.
Junk fees for baggage and reservation changes accounted for $6.8 billion of that bottom line. As legroom shrinks, service stinks. Formal complaints to the Department of Transportation rose 30% last year. USA Today quoted consumer advocate Charles Leocha: “Everybody keeps telling us that we’re seeing all these improvements, but nobody’s seeing them. New airplanes don’t help us when the planes are bigger with more seats on board and they’re squeezing more people into them.”
That, of course, is after the cattle — uh, people — are fondled by TSA agents. Summer fliers have been advised to expect the longest security lines ever. Genius investor Warren Buffett tracks this industry with no intention of ever putting up money again. He once told an interviewer:
“If a capitalist had been present at Kitty Hawk back in the early 1900s, he should have shot Orville Wright. He would have saved his progeny money. But seriously, the airline business has been extraordinary. It has eaten up capital over the past century like almost no other business because people seem to keep coming back to it and putting fresh money in. … I have an 800 number now that I call if I get the urge to buy an airline stock. I call at 2 in the morning and I say: ‘My name is Warren, and I’m an aeroholic.’ And they talk me down.”
A little-known fact about Mr. Buffett: His wife passed away in 2004, 27 years after moving out of the family home in Omaha. They stayed married after his longtime companion moved in. Told you he was a genius.