AI Summary
5 min readIn 2024, Delta told investors it was done treating upgrades as perks and had started seeing them as revenue opportunities. Two years later, more than three-quarters of Delta tickets include at least one upsell — baggage, economy plus, or a premium seat. Now the rest of the industry is following. United has reconfigured planes so that more than half the seats are first class. Alaska Airlines is expanding its premium cabin. The Wall Street Journal recently led with the Alaska story, and the shift is real enough that the hosts of Motley Fool Hidden Gems Investing devoted the first segment to whether this strategy makes airlines less risky as investments — or just differently risky.
The Business Case for Going Premium
Continue reading the full summary in the app — free to try.
Read Full Summary →Free • No credit card required
Never miss an episode of Motley Fool Hidden Gems Investing
Get every new episode summarized in your inbox — free, ~5 minutes to read.
No spam. Unsubscribe anytime.
What you'll learn
- 1 (00:01) **Airlines Go All-In on Premium Seating** - The hosts introduce the trend of airlines dramatically increasing their premium cabin capacity, sparked by a Wall Street Journal story on Alaska Airlines and a United Airlines cabin configuration with over 50% first-class seats.
- 2 (04:11) **The Cyclical Risk of the Premium Strategy** - Tyler questions whether this strategy is risky for a notoriously cyclical industry, as premium seats are harder to fill during a downturn.
- 3 (07:21) **Are Airlines Now a Good Investment?** - The hosts debate whether this strategy change makes airlines worthwhile for everyday investors.
- 4 (10:06) **"Do You Buy This?" Game: Oura IPO Demand** - The hosts play a game testing the credibility of financial news stories, starting with Oura's claim of overwhelming demand for its IPO shares.
- 5 (12:37) **"Do You Buy This?" Game: OpenAI Safety Delay** - The hosts evaluate OpenAI's claim that it is delaying its newest model release purely for safety and altruistic reasons.
- 6 (13:54) **"Do You Buy This?" Game: Massive Indian Steel Plant** - The hosts discuss Masabi Metallics' claim that it will build a $15 billion steel plant in the US by 2030.
- 7 (15:28) **"Do You Buy This?" Game: SpaceX Orbital Compute Timeline** - The hosts evaluate Elon Musk's claim that SpaceX's orbital compute (a data center in space) will beat its 2028 forecast.
+ Full timestamped outline available in the app
Show Notes
If it was just one airline, it would be an outlier, but the entire airline industry is moving towards premiumization of the cabin. Alaska Airlines was the most recent company to announce that it is investing to cater to wealthier clientele with better (and more) first class cabins. Lou, Matt, and Tyler break down the strategy behind this industry wide move and whether it finally makes the airline industry a worthwhile investment. Plus, do you buy what these companies are selling and a lister question on growth in essential sectors.
Have a question? Email us; [email protected]
Tyler Crowe, Lou Whiteman, and Matt Frankel discuss:
- The strategy of premium everything in airlines
- Will airlines ever make great buy-and-hold stocks?
- Do you Buy it? Delayed IPOs, AI safety, big investment plans, orbital compute
- Mailbag: Growth in consumer staples
Companies discussed: ALK, DAL, UAL, LUV, AER, ULCC, SPCX, COST, ADM, PM, NVDA
Host: Tyler Crowe
Guests: Lou Whiteman, Matt Frankel
Engineer: Dan Boyd
Disclosure: Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, “TMF”) do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement.
We’re committed to transparency: All personal opinions in advertisements from Fools are their own. The product advertised in this episode was loaned to TMF and was returned after a test period or the product advertised in this episode was purchased by TMF. Advertiser has paid for the sponsorship of this episode.
Learn more about your ad choices. Visit megaphone.fm/adchoices
Learn more about your ad choices. Visit megaphone.fm/adchoices
More from this podcast
Motley Fool Hidden Gems Investing →