Question: Why won’t you want to own regional airline stocks in the future?
Better Question: Why would you ever fly from Chicago to New York again?
If I were the CEO of Southwest I’d be terrified of the dawn of self-driving cars. The average Southwest flight is 757 miles and takes roughly 2 hours.
Aviation contributes 5% of global emissions, making a growing share of consumers unhappy about flying. I predict that as self-driving vehicles take over, most people will opt to drive to their destination while they sleep.
Assume an overnight AV trip takes 12 hours, including an hour to recharge and take occasional breaks. The current record for a Tesla is 670 miles on a single charge, which can be expected to increase as battery efficiency improves, making driving 11 hours feasible. An AV going 70 mph (the current interstate speed limit) you could easily travel 770 miles overnight. With no need for controls, and the engine replaced by small electric motors, chairs will be able to recline into lie-flat beds. Imagine relaxing in business class…in the backseat of your own car.
In the future, should you wish to travel from Chicago to New York you’ll have a choice.
Option A: Drive to the airport, check in, wait in security lines with hundreds of other people, experience a delay, eat unhealthy food, experience another delay, all while contemplating why bottled water costs 3x the normal price, and then buying it anyway.
OR…
Option B: Get in your AV, stretch out, relax, read, work and then lie flat to sleep, only waking up when your car announces that you’ve arrived at your destination.
Hmm. I’m pretty sure I’ll grab my book, reusable water bottle, laptop and pillow, and head for my AV.
How far could you travel in your sleep?
Consider the following:
Once AV’s are a reality, a traveler starting in San Francisco could go anywhere in the green circle. Start in New York and reach any spot in blue. Begin in Austin and travel to any place in purple radius.
AV travel will make the most of your valuable time. Have a full, productive day, get a great workout, plan to eat at your favorite spot, and take your business trip as you rest, while having minimal impact on the environment. Best of all for younger generations, you don’t need to talk to anyone while you do it. At an airport, by my count, you talk to 8 people at minimum.
Southwest is currently investing in increasing short-haul flights (less than 500 miles), where it makes more revenue per mile than longer routes. In the AV future, those profits will dissipate into thin air.
You might want to consider other ways to add more LUV to your portfolio.
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