“If you want to be a millionaire, start with a billion dollars and launch a new airline,” Warren Buffett is fond of saying. The chronic bankruptcies and bailouts of the airline industries are widely known in the investment world – David Einhorn even did his undergraduate thesis on the topic which helped him start his investing career. However, you would not know it from the stocks – over the last five years, a quarterly rebalanced basket of major airline stocks have returned +450%, handily trouncing the S&P’s piddling +60%. Whitney Tilson put out a famous bull piece on the airline sector in 2014 summing up the zeitgeist: pricing is strong, planes are full, oil is cheap. Last week, Southwest $LUV printed record profit of $820m, up 35% year on year. Yet the stock tanked 11% on the guidance. What has changed in the airline sector and what could this mean for the rest of us?