United1 wrote:Midwestindy wrote:hiflyeras wrote:Great post. Anyone thinking that WN is going to escape the carnage coming in October is not paying attention. And even if they DO operate more departures in comparison to their competitors that just means they're operating more money-losing flights. Even at load factors of 60-70% no one would be making money unless the fares were outrageously expensive.
Every airline has said capping capacity is a very near-term solution, but even if it does get extended out, WN is the best positioned to compete in a low LF world.
Remember even though yield is down, Fuel/CapEX/Labor/Food is also down significantly, therefore WN could theoretically get fairly close to break even on their flights (at least compared to the US3)
Yield is not just down it's utterly in the gutter...a few anecdotal points about that were even in this thread. A WN flyer was bragging about how he picked WN over UA on DAL-MDW because WNs fare was $90 roundtrip. The actual revenue to WN will be less if that fare includes taxes and fees but let's assume it's all revenue. That works out to 5.6 cents a mile. Do you think WN can generate a profit at that yield even flying 100% load factors?
I just flew FLL-MDW for $90 RT including taxes and fees. I'm pretty sure that's the cheapest RT I've flown in my adult life. I think the previous low was $98 RT FLL-TPA somewhere around 2003.
The flight to MDW had about 40 people on a 73G and the return was around 90 on a 738 (pretty close to the no middle seat capacity they are selling). No way those flights can be close to profitable.