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Focus, I hope you are right. I think short term the road is going to be rocky because of the Airline situation. It seems that this industry will restructure thier operational model to be similar to Southwest. This will mean fewer aircraft models and thus fewer different Jet engine models on the wing. If there is a contraction of make and model, this will affect Pratt in a negative way.

The bright side is that the Iraqi war will put tremendous price (lowering) pressure on Oil. You probably heard about the secret Iraqi pipeline into Syria that was shut down. There is going to be a strong competition in the Middle East to get oil on the market (at any price) and this will bring down the overall price of oil. As this price drops, the cost of gas and jet fuel will go down. Hopefully, war tensions will also ease and people will want to travel by air. So long term, I think these prospects will help ameliorate the restructing. But as a whole, I think economics will force a big change in the airline operating model and this will have an adverse effect on Pratts commercial side. Some of this will be offset by increased military spending and also congress is in a better position to augment or increase military projects, now that we have seen their effectivness in war and in the deterrance of terrorism.

Fortunately for UTC, it is diversified into different sectors. This helps smooth out the bumps in the road. Also, Carrier and Otis could pick up some business in Iraq as this contry is rebuilt.


Long on UTX
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