The summer is here and many people over the next few months with be flying somewhere either partly as a tourist and perhaps to meet family. In general we like airplanes, they are sleek and there is something about them that we like. Should you invest in airplane stocks, if you are at the airport you can see how the lineups are for the various airlines. A little while ago: Ryan Gottschalk from Thompson Reuters looked at how are the airlines performing from an investor’s point of view.

Mr. Gottschalk focused on North American headquarter airlines and focused on key performance indicators:

Passenger load factor – the percentage of passenger miles travelled compared to the number of seats on the plane.

Revenue and Cost per available seat (ASM). The difference is the operating margin per ASM and the greater the number the better.

Company             Recent Close           Div Yield     Annual   Rev Per    Cost per      Operating

Pass L F    Avia Seat   Avail Seat   Margin

Alaska Air               64.29                     1.2%               85.1%          0.18            0.10             0.08

Spirit Airlines       44.30                      n/a                 86.7             0.15            0.12              0.03

Allegiant Travel    145.85                   1.9                  87.5              0.10             0.14           -0.03

Delta Air Lines         40.57                 1.1                   84.7              0.18             0.19           -0.02

Southwest Air          42.16                  0.7                 82.5               0.18            0.15              0.02

JetBlue                         17.31                  0.0                 84.0              0.15            0.15               0.0

SkyWest                      24.40                 0.7                 82.4              0.11            0.11               0.0

WestJet                        21.63                  2.6                 81.4              0.16            0.14              0.02

Air Canada                    9.67                 n/a                 83.4               0.16           0.17            -0.01

Hawaiian Holdings   37.67                n/a                 81.5                0.17          0.15               0.02

United Continental   44.06              0.0                 83.6                0.15            0.18            -0.03

American Airlines      31.80              1.3                  82.0               0.17            0.18               0.0

Linking to dividend paying stocks, while the above companies are interesting and airlines in general are a “sexy” thing to own, they are risky. Companies have leased planes; operating on tight margins and there tends to be other companies which have less risk. Sometimes it is better to look at the “sexy” companies but look to those with more consistent and stable earnings – including supplier companies which continue to make profits over the long term.

There are more questions than answers, till the next time – to raising questions.