It’s no secret that the airline industry has issues. Soaring fuel costs, have left airlines scrambling for ways to increase revenues. Instead of just raising fares and cutting capacity, airlines have decided to nickel and dime travelers to death. Just yesterday the Israeli El Al airlines decided to start charging travelers more for seats in an emergency row. This follows other airlines charging for pillows, food, luggage…etc.
Customers are getting fed up with an ever expanding list of fees. In an age where most industries have made their fee structures much more simple, the airlines have decide to drive us crazy. ” Sir, you’d like ice with your beverage? That’ll be 3 bucks.” Or “Miss, I am sorry but since your shoes have high heels, that’ll be $2.”
You know, if airlines really wanted to be fair about each individuals contribution to the amount of fuel used per flight, and then charge accordingly, they could use the supermarket method. When we go shopping, for many items, we pay per pound. Fruits, vegetables, ground beef all priced according to weight. Why don’t the airlines follow suit? Why should someone who is thin, pay the same amount as someone with a bit more girth? After all, our weight-challenged traveler causes more fuel to be used than our thin traveler.
Stop the madness. Just raise fares. It’s that simple.
NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.
Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
One of Israel’s largest asset management firms, Prisma Investment House, is out with a report on global fertilizer leader, Israel Chemicals (see below). Speaking about the the future of potash pricing, Prisma takes a contrarian view. While analysts are busy raising estimates for stocks like Potash (POT) and Mosaic (MOS), on the heels of continuing strong demand and rising Potash prices, Prisma encourages investors to take a step back, and re-evaluate what the future holds.
“Whilst we estimate that the near future will provide positive headlines for the potash sector, the increase in supply (predicted for 2012 and beyond) presents a completely different long term perspective. In our opinion the increase in the global output will lead to a sharp decrease in the price, while the entry of new participants into the club of potash producers will only accelerate the process. We remind you that in recent weeks the arrival of two companies (EuroChem, Rio Tinto (RTP)) into the potash industry has been announced.”
I think that’s really interesting. You rarely hear about the new producers entering the market. Over at Seeking Alpha, Ron Haruni talks about how Rio Tinto is going to try and grab 10% of the world potash market. This may have a material impact on Potash and Mosaic, as well as Israel Chemicals. That being said the near term looks more promising for the industry. Both China and India will need to renew potash contracts at the end of the year. Their current contracts are for prices well under the current market price. This may cause another run up in prices, and that price hike has the potential to be very good for Potash, Mosaic and Israel Chemicals, as the new producers that I mentioned earlier, won’t make a big impact over the next few months.
For investors in these companies, this could potentially provide a bounce, as all these stocks have dropped around 20% over the last month or so. If you are thinking about investing in one of the fertilizing companies, have a look at the Prisma report.
NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.
Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
