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Summarizing The Success Of 40 Years Of Deregulation In Air And Freight Transportation

Summarizing The Success Of 40 Years Of Deregulation In Air And Freight Transportation

In 1980 Democrats held the presidency and both houses of Congress. The 96th Congress marked a generation in which both the Senate and House had stayed blue. However, the economy overall had suffered the drawbacks of some 90 years of misguided industrial regulation and central planning from both parties. Moreover, Americans suffered from stagflation (prolonged stagnation and inflation), gasoline shortages brought on by a fickle foreign oil supply, limited options for transportation, and limited consumer goods, which were expensive to ship.  A growing bipartisan, academic and policy consensus documented that regulatory control entrenched the power of incumbent firms, incentivized collusive relationships between regulators and companies, created barriers to entry in the market, and precluded the competition that would incentivize innovation and choice. Congress and the Carter Administration rightly focused on democratizing the benefits of freight rail and air transport networks to help address some of these challenges. The signing of the Staggers Rail Act in 1980 laid important groundwork for the greening of the transportation industry today.

Making Freight Rail Work for Americans, not Bureaucrats

American folklore alludes to the 19th century railroads as justification for regulatory agencies, but the creation of Interstate Commerce Commission (ICC) in 1887 was partially a product of rent seeking, reflecting the political prioritization of powerful agricultural interests over transport providers, not consumers. Shippers of the time desired political power to ensure preferred rates rather than a competitive bidding process. The subsequent decades saw the decay of America’s railroads, so much so that they were unfit to deliver some supplies to ports during World War II. Many went out of business as the government subsidized highway travel and trucking. It reached

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Delta Air Lines Announces September Quarter Financial Results

Delta Air Lines Announces September Quarter Financial Results

September quarter 2020 GAAP pre-tax loss of $6.9 billion and loss per share of $8.47 on total revenue of $3.1 billion

September quarter 2020 adjusted pre-tax loss of $2.6 billion and adjusted loss per share of $3.30 on adjusted revenue of $2.6 billion

Delta ended the September quarter 2020 with $21.6 billion in liquidity

ATLANTA, Oct. 13, 2020 /PRNewswire/ — Delta Air Lines (NYSE:DAL) today reported financial results for the September quarter 2020.  Detailed results, including both GAAP and adjusted metrics, are on page four and are incorporated here.

Delta Air Lines and the Delta Connection carriers offer service to nearly 370 destinations on six continents. For more information visit (PRNewsFoto/Delta Air Lines)

“While our September quarter results demonstrate the magnitude of the pandemic on our business, we have been  encouraged as more customers travel and we are seeing a path of progressive improvement in our revenues, financial results and daily cash burn,” said Ed Bastian, Delta‘s chief executive officer.  “The actions we are taking now to take care of our people, simplify our fleet, improve the customer experience, and strengthen our brand will allow Delta to accelerate into a post-COVID recovery.”

September Quarter Financial Results 

  • Adjusted pre-tax loss of $2.6 billion excludes $4.0 billion of items directly related to the impact of COVID-19 and the company’s response, including fleet-related restructuring charges and charges for voluntary separation and early retirement programs for Delta employees, which were partially offset by the benefit of the CARES Act grant recognized in the quarter
  • Total adjusted revenue of $2.6 billion declined 79 percent on 63 percent lower capacity versus prior year
  • Total operating expense, which includes the $4.0 billion of COVID-related items described above, decreased $1.0 billion over prior year.  Adjusted for those items and third-party refinery sales, total operating expense decreased $5.5 billion or 52 percent in the September quarter compared to the prior year, driven by lower capacity- and revenue-related expenses and strong
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Sealed Air: A Defensive Business With Continued Innovation (NYSE:SEE)

Sealed Air: A Defensive Business With Continued Innovation (NYSE:SEE)

I am continuing my series of articles looking at stocks that are more “recession-resistant” in order to build up the defensive side of my portfolio. Sealed Air (SEE) came in one of my screens, and I wanted to do some due diligence. I believe the company is a high-quality, safe business that should be considered when talking about long-term investments.

Just a brief background on the company, Sealed Air is a packaging company focused on food (including raw foods) and other products. The company was actually the pioneer of Bubble Wrap, which is one of its main brands alongside namesake Sealed Air, Cyrovac, and Autobag. Bubble Wrap is that plastic with little air pockets used for packaging, and the company has continued to create innovative products along this vein.

The company operates two main segments, namely the Food segment and the Protective segment. The Food segment focuses on packaging materials and equipment to properly “seal” and package raw food products (e.g., that cut of steak at the grocery store). Proper packaging enhances food safety and extends shelf life. In 2019, the Food segment made up approximately 60% of total revenue. The Protective segment creates those plastic packaging with air in them that are designed to protect valuable goods while in transit. You may have seen them when you opened your Amazon (AMZN) package. This segment benefits from the current e-commerce trends, as more products are being shipped directly to consumers, thus increasing the need for protective packaging. In 2019, this segment represented 40% of total revenues. In each segment, the company competes against other manufacturers that create similar products or packaging made with other types of material (like foam, paper, plastic, etc.)

The company’s long-term competitive advantage lies with the scale of its operations and its continued innovation. Sealed Air

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This May Be What Real Electric Urban Air Mobility Looks Like At First. It’s Both Familiar And A Little Weird.

This May Be What Real Electric Urban Air Mobility Looks Like At First. It’s Both Familiar And A Little Weird.

Almost all of the hundreds of urban air mobility startups currently active around the world are pitching radical electric vertical takeoff and landing aircraft for a “revolutionary” transportation future.

Their unconventional multi-rotor designs require time-consuming testing, decade-long paths to certification, and the buildout of a ground and air infrastructure to support them. Investors are spending, and will have to spend, billions just to see if their business plans will work.

Palm Springs, California-based Eco Helicopters thinks there’s another route to eVTOL UAM. It’s vastly cheaper, developed by someone else, possible on a far shorter timeline, and looks pretty familiar.

Eco Helicopters is seeking to bring what it calls the “EcoMax”, an electrified version of the ubiquitous Robinson R44 light helicopter, to the market, combining operational aspects of traditional helicopter air taxi services with the on-demand surface transport model pioneered by Uber
and others.

Basically, that means pairing an on-demand app with an electric helicopter. Eco Helicopters plans to launch its on-demand UAM service with a conventionally-powered R44 in the second quarter of 2021, while the certification process for the EcoMax goes forward.

The company is owned by Richard Webb, who is also the owner of its parent, Orange County Helicopters, which arranged the helicopter flight last January on which NBA legend Kobe Bryant, his daughter and seven others were killed.

If all goes according to plan, the company will begin operating the electric R44 following FAA approval for a supplemental type certificate (STC) for the helicopter. That could be in 18 to 24 months. The relatively

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