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03-10-2017, 03:33 AM
Warren Buffett Was Right About the Airlines
By Chris Bryant
October 2, 2017, 6:15 PM GMT+8
After a string of airline bankruptcies, Warren Buffett has become more positive about the industry's fortunes—in the U.S. at least. Yet the collapse of U.K.-based Monarch Airlines suggests the billionaire investor was also right in his earlier assessment: aviation is often a "death trap" for investors.
Monarch's failure has been long in gestation. Owned by private equity firm Greybull Capital LLP, it has required a succession of capital injections and restructurings in recent years. A year ago, regulators were even rumored to have set up a shadow airline to track the company's flights to the Mediterranean because they feared Monarch might have to cease flying, leaving passengers stranded.
Monarch secured a 165 million pound bailout ($220 million) from Greybull on that occasion, prompting chief executive Andrew Swaffield to insist: "We are not going to go bust". His promise didn't even remain valid for 12 months.
More details in https://www.bloomberg.com/news/articles/...ong-gadfly
By Chris Bryant
October 2, 2017, 6:15 PM GMT+8
After a string of airline bankruptcies, Warren Buffett has become more positive about the industry's fortunes—in the U.S. at least. Yet the collapse of U.K.-based Monarch Airlines suggests the billionaire investor was also right in his earlier assessment: aviation is often a "death trap" for investors.
Monarch's failure has been long in gestation. Owned by private equity firm Greybull Capital LLP, it has required a succession of capital injections and restructurings in recent years. A year ago, regulators were even rumored to have set up a shadow airline to track the company's flights to the Mediterranean because they feared Monarch might have to cease flying, leaving passengers stranded.
Monarch secured a 165 million pound bailout ($220 million) from Greybull on that occasion, prompting chief executive Andrew Swaffield to insist: "We are not going to go bust". His promise didn't even remain valid for 12 months.
More details in https://www.bloomberg.com/news/articles/...ong-gadfly
Specuvestor: Asset - Business - Structure.