Editor's note (Part 4 of 7): The following is text from Jim Cramer's keynote speech at The Deal Economy Event on Dec. 5 at the New York Stock Exchange, New York City. To watch video replays of the event, click here.
NEW YORK (TheStreet) -- What's the fourth theme? The bounty that comes from a very weak U.S. Dept. of Justice Division that seems to bless deals that would be vetoed out of hand by any Republican administration. The biggest beneficiary? The airlines.
The combinations that have been allowed in the airline industry have, for the first time, let these companies earn their cost of capital and THEN SOME. It is the single best time ever to be in the airline business because of a dramatic decline in competition and I can't emphasize enough that you need to invest in this area that I have formerly found to be totally uninvestable.
I had favored Delta (DAL), which I think can easily advance some 50% from these levels if oil stays tame, although its ownership of a refinery allows for a very favorable cost advantage. But the ridiculously anti-competitive merger that was the US Airways-American Airlines deal, I think could lead to a double in the next 18 months for the combined company, which will trade as AAL. History has shown that when airlines are allowed to merge, the synergies are awesome and the possibilities for fare increases remarkable and seemingly endless.
Previously, when we have had these combinations, they ultimately ended badly for shareholders because discounters came in to compete and ruin the margins. But this time there are many things working against the potential discount entries. First, they need new planes and the lines for planes from Boeing (BA) and Airbus are ridiculously long. You can't get a Dreamliner until 2020 and the queue for the 777 is already beyond the reach of a startup.