And how about BA? Backlog is tremendous for this company. UAL alone has over 20 787 orders and are being delivered about 2 737's per month. I'd say business is great for BA and the autos too like F. Hopefully the unions will get their agreements in order and finalize things so UAL can prosper.
recovery is already 4 yrs long. UAL has had a fantastic, long run. w/ the rest of the world with negative growth, the dollar getting stronger AND WTI above $100, things look precarious.
UAL's balance sheet is not getting better (less cash, anemic stockholder equity):
UAL trading at over 100x book. Industry avg is 2.6, 5 year avg for UAL is 4.5. obviously it was negative some time ago. This is not a robust company. If the S&P tanks, it is toast (Obviously can go up). Would be interesting to see if it breaks down below its upward channel. I would take my profits off the table at least. Great way to short the market if it ever breaks down.
Investing in aircraft leasing companies is essentially investing in banks that are highly exposed to the ups and downs of the airline industry. They are on a roll right now. They tanked during the post 9/11 downturn.
US based banks and airlines fared worse than aircraft leasing companies in the post 9/11.
Aircraft leasing is a global business and its assets are liquid and mobile. If an customer could not make the leasing payment to a leasing company, the leasing company would repossess the planes and release them to the other customers. Usually the turn around time is short, and the cost is more than covered by the safe deposite of the lease.
Aircrafts have stable market values because it is a duopoly market - by Beoing and Airbus.