Vinny’s Blog

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Here we will look at Airlines/ Trucking / Railroad.

Airlines

IATA says global airlines to lose $9 bln in 2009
June 07, 2009: 09:30 PM ET
KUALA LUMPUR, June 8 (Reuters) - The global airline industry is facing an unprecedented crisis and is likely to lose $9 billion this year, nearly double an
estimate made just three months ago, the International Air Transport Association said on Monday.

–This pretty much tells you about Airlines in general…no need to go specific and increase complexities.

Trucking

US trucker Jevic files for bankruptcy, shuts down
Wed May 21, 2008 2:36pm EDT

Troubled trucker YRC to seek $1 billion pension bailout
May 15, 2009 1:17 PM ET
CHICAGO (Reuters) - Struggling No. 1 U.S. trucking company YRC Worldwide Inc plans to seek $1 billion in bailout money from the Troubled Asset Relief Program to help it cover pension obligations, a move analysts say is unlikely to succeed as the company has no financial charter.

Associated Press
As trucking goes, so goes the economy
By SAMANTHA BOMKAMP , 05.13.09, 04:33 PM ED
In the first quarter of 2009, about 480 trucking companies went under. That’s less than 1 percent of the nation’s total freight capacity, which still leaves too many trucks competing for fewer shipments, according to analyst Donald Broughton of investment bank Avondale Partners. More than 3,000 trucking companies went out of business last year - taking seven of every 100 trucks off the road.
Analysts think that the number of trucks on U.S. highways will continue to slide until supply is more aligned with demand. When the trucking business starts

to pick up again, they say, other economic factors - from the employment rate to the gross domestic product - will eventually follow.

..Now there is a good reason to relay on this trucking industry to see if the economy is recovering or not…here is what’s said about trucking and how economist use thier number to gauge economic recovery..

…..Looking for signs of economic recovery? Try counting the number of trucks on the road.

Trucks carry almost all the manufactured and retail goods in the country - from refrigerators to lumber, detergents to toys. Many economists gauge how fast
assembly lines are running, and how much consumers are buying, by the volume of goods hauled by trucks. But the most recent earnings reports show trucks are
not carrying enough yet to indicate recovery is near.

………..Anyway…do you see economic recovery in this sector ? I don’t see how those 100s of truckers able to see green shoots.

Rail…and this is probably the only good news in this sector, but way too small to make any difference.

Well, if you know anythig about America then you know it’s not a rail country it’s a car country. Or if you have to go long distnace it’s plane country. But

no..not rail..not too many. This is what has always puzzled me from the very bigining….

To fly an Airplane you need a very skiller person, skiller ground crew, highly skilled mechanic, lot of space to land and take off, big airports often outside the city, just about anything you can think about airplane and an airport is expensive…security..communication, radar system etc..

Rail…does not require any of that…it often leaves you in the city. It’s more fuel efficient, there have been electric trains for decades even before there have been a single electic car on the road. They are better for the environment.

Yet flying is often cheaper in America than taking a train…..I understand if one has to go 3000 miles from cost to cost and has to take a plane but even for near by towns and cities people would have no choice but to fly.

And here is the most stupid thing that can happen only in America…and no where else.

On some good days I can actually find a plane ticket to fly to Chicago or Miniapolis for $100 that’s 1000s of miles away, I would be security cleared, I
would be checked in, I would be flown by a very educated competative pilot for 1000s of miles, if lucky I might have my own video screen to watch a movie and
might get a free coke ride would be 3 hours or so..all in $100.

Now watch the stupidity….to go to the airport from my home in my town and airport which is only 20 miles I will have to pay taxi driver $50. Chances are the has not graduated and from insurance to maintenance nothing of that taxi can be nearly as much as the plane.

Anyway coming back to Rail….I think my puzzle for many years has been solved..someone…with better understanding than mine has realized that it’s not the Airline and not the Cars and not the trucks that are going to be the future but Rails would be.

5/29/2009 12:01 AM ET
Where Buffett’s money is going now
Berkshire didn’t add any stocks to its 13-F portfolio during the first quarter of 2009, nor did it extinguish any holdings. The company did, however, add to its holdings in six securities. Berkshire built a larger stake in two railroad stocks, BNSF Railway (BNI, news, msgs) and Union Pacific (UNP, news, msgs), as well as two of its biggest bank holdings, Wells Fargo (WFC, news, msgs) and U.S. Bancorp (USB, news, msgs).

The largest increase in dollar terms was in BNSF Railway, which was a subject of some conversation at the company’s recent annual meeting as well as in an
article we published a few weeks ago. Buffett and Munger have long been leery of railroad investments, but not lately. They have cited how the economics of the railroad business have improved substantially over the years, in part due to the increased attractiveness of rail transport in terms of energy

efficiency. Companies such as BNSF have been making significant investments in more-energy-efficient rail equipment.

In the last do you see green shoots in transport sector ? in Airline ? in Trucking ?

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