American Airlines Group (AAL-Q)

Bank of America reports there's an 8% increase in travel vs. 2019 (not 2020 during Covid). This trend will benefit American Airlines and Delta (his favourite airline), especially when international travel returns. True, shares have run up, but he feels there's still plenty of runway left.

It's moved up too much and had to do an equity raise. Doesn't know how much money they're losing. Buy Boeing instead.

An $11 stock, but he prefers LUV because it doesn't lose money and has a better long-term outlook.

WJA-T vs. AAL-Q. On AAL-Q, the industry has consolidated so the airlines have pricing power. 10 years ago all these airlines were losing money. There are ultra low cost carriers coming in and undercutting the others and there is a bit of a price war going on. This is not happening in Canada. He would stay out of the US. WJA-T is safer than AC-T.

He was in Delta for a while. AC-T is cheaper and he prefers it. He is out of the group in the US as there is government investigation of price collusion.

Feels there is a trading catalyst to own an airline here. There has been some consolidation in this space. Traditionally these are not well run businesses but there is less capacity now, fuel is moving up and surcharges can be passed on. If they can manage those earnings and can guide the street conservatively, a case could be made for them. If you start to see passenger trends roll over, it would probably be time to sell.