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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (28514)	5/26/1998 10:53:00 AM
From: Knighty Tin	Respond to of 132070

Tip, With May expirations, I currently own a 1/3 position of the June 360s at many prices. I plan to roll my perspired Mays out to the Fall, but haven't done so yet. I'm kind of hoping for 370 some time today. Oil is only part of the airline story. The other is the business cycle. Planes are very crowded right now because the economy has been o.k. and competition has required pressing the flesh. However, eps are not growing and cost cutting will be foremost in the minds of many managers. Travel is an easy cut. We still have the summer vacation period to suffer through, but I think we come out in the winter with much less business travel and some price competition. Interest rates impact airlines several ways. First, most lease or finance jet purchases, so it increases costs directly. Second, higher rates slow business travel. And, less importantly but still a factor, higher rates are competition for airline stocks, which pay little in the way of dividends. I think there is still lots of potential in this index, but you have to be careful. Wall Street loves airlines (whatever happened to video conferencing replacing business travel? <G>). The index options sell by appointment only, so the spreads are very wide. Taking a shot at the giants, American and United, might be smarter, but I was kind of hoping some of the little guys will go belly up. MB