Ed Butowsky: Southwest Airlines Becomes Bigger & More Powerful

September 27, 2010

Ed Butowsky, Managing Partner of Chapwood Investments Management, joins NBC news at 6 to discuss the impact of Southwest Airlines buyout of AirTran Airlines.

Southwest Airlines, the low fare leader, announced Monday, September 27, 2010, their intent to buyout AirTran Airlines for $1.4 billion. The buyout would mean that Southwest Airlines would reduce it’s competition. The AirTran acquisition would increase the number of airports Southwest could reach by +25%. Included in this is increase is new international destinations. With word of the acquisition Southwest stock rose 10% and AirTran rose 60%. Undoubtedly this will mean more airplanes, more routes, more passengers, and of course more profits. Will this buyout mean more lower fares?

Ed Butowsky is quick to point out that this merger does not mean lower ticket prices. Reducing the competition is never good for consumers, but more troubling is the rising cost of oil. Ed believes that ticket prices will go much higher because of the cost of oil. However, in light of these facts, travelers will have more choices on Southwest than before.

How long will this merger take? Review and approval of this acquisition starts in the justice department which could take months. Beyond that Southwest believes it could take up to two years before all of AirTran is converted over to Southwest.

Ed Butowsky Explains How To Avoid Financial Suicide

August 12, 2010

Ed Butowsky, Managing Partner of Chapwood Investments Management, appears on Taking Stock with Pimm Fox on Bloomberg to discuss how and why Americans are committing financial suicide. With KKR & Co. canceling its IPO this week, citing unfavorable market conditions, Ed Butowsky explains that you have to “be suspect of any IPOs right now.” You have to look under the hood of any company that is attempting to raise money through IPO. Ed Butowsky further explains that because of the market in 2008/2009 investors have decided to sit on the sidelines and collect 1% or less on their money markets and bonds. What investors fail to understand is by the time you subtract out taxes, economic inflation (which is more than the 1% the government is claiming) and management fees your committing financial suicide. Your loosing significant purchasing power with your money. How much could you be losing year over year? What could you be doing to stay on top of your investments?