United1 wrote:tphuang wrote:United1 wrote:
You are right I did get June and July backwards...sorry about that but the days, weeks and months have been running together for some strange unknown reason
As for the US3 charging higher fares right now well yeah because unlike WN they are not trying to stimulate demand to fill their planes...quite the opposite actually. They have eliminated lots of those loss leaders simply because of social distancing. That being said at some point if they want to fill the planes they will have to drop pricing and stimulate demand...especially if business travel doesn't pick up.
This isn't like any previous recession and I don't think WN assuming the same rules apply and using the same tactics will necessarily work. WN was able to take advantage back in 2008 because it stopped being an airline and operated as a fuel trading company that happened to fly planes. That happened because WN got lucky with its fuel hedges. That situation doesn't apply this time...oil is not likely to spike...in fact it can't because as soon as oil hits a certain price it becomes profitable for US oil to ramp up again which will crash the price back down or at least level it out.
In 2008 UA, DL and AA all had to retire 100s of aircraft while WN was able to hang on and grow because the fuel hedges saved their balance sheet...that's how they gained market share. This time around is a bit different. All are hemorrhaging cash right now and none are going to be in a position to expand rapidly once we are on the tail end of this recession because all of them are going to be busy repairing their balance sheets. WN can probably hang onto its market share but I don't think they are going to be able to make inroads on UA, DL or even AA's share.
If legacies are still 20% smaller by end of 2022 and WN is larger than it was pre-COVID by then, they will automatically be gaining market share. It's really hard to argue that this downturn is not hitting legacies harder. Everyone is admitting that leisure is coming back before business travel and domestic is coming back before international.
It will be interesting for me to see what happens at DEN. I anticipate a huge battle there. If UA devotes a lot of resources to keep its market share at DEN against WN, that's less resources it will have in its other hubs.
You are assuming that WN can continue to grow...I'm not convinced of that for a few reasons. One even before the MAX debacle WN seemed to be loosing its way a bit. They entered IAD and didn't make any inroads, they scaled back their proposed Hawaii service, what little international service they have was scaled back, PHL was scaled back, ATL was scaled back, SFO was scaled back, EWR was eliminated. Two at the height of "we are scaling back service because of the MAX" WN sells 20 73Gs to UA...that doesn't seem like a company that was desperate for aircraft that seems like a company that can't figure out where to put new aircraft profitably. Don't get me wrong I think WN has an incredibly well built out profitable core network...I question their networks profitability once they get outside of that core...and their ability to expand that core.
I do think DEN is going to be interesting as it seems to be one of the home runs in WNs network. I don't know how it's going to all go down but last time there was a battle of DEN everyone counted UA out...we all know how that turned out WN grew, UA grew, the market grew and F9 lost. You are also assuming the US3 will be 20% smaller domestically I'm not. Even if they are smaller overall I think most of those cuts will be overseas not on the domestic network...the cuts certainly will not be on UAs domestic network. Domestic was where the money was being made pre-covid and domestic will be where the money is being made post covid.
I don’t understand your selective reading of the history. Why do you ignore their meteoric growth at BNA and STL? Their running numerous carriers (including CO and UA) out of MDW? Their success at DCA? The list goes on and on.