SWALUV wrote:cloudboy wrote:MIflyer12 wrote:
Thanks for your thoughts on that but it wasn't quite where I was trying to take this.
I was comparing DL fares per mile on a route without a ULCC (DTW-BOS, which at least has JetBlue), against a route with a ULCC (DTW-LAS with Spirit). I did cite DL Basic Economy fares on both routes.
I'm not calling B6 a ULCC. For what it's worth - and maybe for another thread - I call them a LCC along with AS and WN, all based on avg yields, not carrier costs.
I don't believe there's much chance that B6 will convert to Spirit's ULCC model. Instead they'll wind up reconfiguring aircraft to B6 standards -- and, importanly, move all Spirit employees to B6 wage scales and work rules (and unions in the relevant crafts). That would, IMHO, destroy the profitability that Spirit has built today. If B6 thought Spirit's Midwest-to-beach routes could get comparable B6 JFK-XXX and BOS-XXX yields, B6 would have been building out the route network that way for years. And yet we see clearly they have not.
(Yes, Spirit flies more than Midwest-to-beach.)
In large, I agree with a sentiment posted upthread. B6 is pursuing this not as a great deal, but its last chance for a deal.
I think B6 is large enough to skip this and grow organically but investment bankers and lawyers don't make $$$$ that way, so they push for deals.
I disagree. I think B6 wants to become a ULCC but has been unable to pull it off. I think that is the root of the operation issues, and also their motivating factor here. Let B6 die down to premium routes, and let Spirit take over some of the smaller and lower yielding routes B6 runs now. That is what appeals to the accountants and stock analysts, and that is what is driving decisions. Personally I don't think it will work, but that won't keep them from trying. If they really wanted the LLC business they would focus on improving service, but so far they haven't done anything to that effect. They see Neelman moving in with Breeze, and they know he will out perform them at their/his own game, aso they are trying to make moves now.
At the same time, I think there is going to be such negative reaction at this point publicly, whether you feel justified or not, any move to merge any Us airlines at this point won't get approval.
I think it’s been clearly covered and stated multiple times that the current B6 product is what will continue forward. B6 has shown a continued investment in the passenger experience that is unlike the traditional ULCC experience. From what has been said, that won’t change going forward.
Exactly, B6 isn't and clearly has no intention of being ULCC. Not sure where anyone can conclude this seeing the statements and market dynamics of where they operate to think they are moving to a ULCC>RH even said in the recent statement there are plenty of start up ULCC's entering the market with lots of growth planned in the coming years in that sector, IE Avelo, Breeze, Allegiant, etc, If anything they are clearly more hybrid carrier leaning more towards mimicking full service type carrier. Expanding to Europe with premium heavy product thats won awards beyond the legacy offering and going into LHR, with eyes sets for CDG and AMS is not the ULCC model at all. They have also stated in earnings reports in comments that they would like to have more Mint aircraft to expand the Mint product even more. I would surmise if they succeed with acquiring NK lots of those A321's will be reconfigured to mint.