coa764
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Some Reality For The LCC Fanatics

Mon Sep 27, 2004 4:01 am

Nicely written article that highlights various points already addressed by many, many threads on the subject of Low Cost Carriers.

FEATURE-Clouds on the horizon for low-cost airlines
Sun Sep 26, 2004 02:11 PM ET

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh62394_2004-09-26_18-11-03_n26339236_newsml

But as the small carriers grow, the line that separates them from the big "legacy" airlines is starting to blur, analysts say.

Michael Boyd, an aviation consultant at The Boyd Group, said the "hub-and-spoke model," which refers to a route network that has specific hubs used for connecting passengers, is not unique to legacy airlines, contrary to popular opinion.

"That's a myth. Many, if not all, of the low-cost carriers also have hubs these days," he said.

What really differentiates the two models is age and efficiency, according to several experts. An older work force translates into higher labor costs, because airline pay is based on seniority. Many of the low-cost carriers employ relatively young staff.

In addition, the low-cost carriers use planes and staff more efficiently. The average turnaround time for planes at low-cost carriers is 30 minutes, versus more than an hour at the major carriers. And the discount carriers only fly to the busiest airports.

But as the low-cost carriers grow older, their labor costs will also grow. They are also facing ballooning costs from skyrocketing fuel prices.

Peter Klebanow, an industry expert and president of Ultramar Travel Management, says the major carriers, at this point, have more options than the low-costs.

"Major carriers have the opportunity to cut costs, but low-cost carriers now have the pressure of rising costs," Klebanow said. "And with fuel prices where they are, this could be a long, cold winter for all of them."

Still, air travelers need to have both kinds of carriers, Boyd said.

"If we just had JetBlue, 40 percent of airports in America would not have air service," he said. "And if JetBlue began flying to those airports with low volume of passengers, it would not have its cost advantage anymore."

In the past few decades, discount carriers such as People Express and Pan American World Airways failed, even after starting with a bang. But the new generation of low-costs have an advantage, according to Klebanow.

"Now, the low-cost carriers also offer amenities such as leather seats or live TV that discount carriers in the past never did," he said. "At that time, it was just a matter of price versus airline loyalty. Now, it's a superior product for a lower price."



[Edited 2004-09-26 21:03:10]
Please oh please Mr Moderator Nazi, dont delete my thread.
 
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jetjack74
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 4:36 am

"There will be a shake-up in the industry. There will be selling, and there will be mergers. Not all the majors will survive, but not all the low-cost carriers will, either," Hansson said.

The majors eventually will get into a position in which the LCC shareholders will be given an offer they can't refuse.

My guess:
B6-will collapse like a house of cards, because that's what they are. They'll come down, and they'll come down hard.
FL-will slowly die out over the next 15 years. They'll be a thorn in DL's side.
NK-will die off sooner
WN-will always be around and will be the median for the cost-conscious passenger
F9-See FL
The others, Independence Air, ATA, Midwest, Aren't even worth wasting time on. Their days have come and gone.
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burnsie28
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 4:53 am

B6-will collapse like a house of cards, because that's what they are. They'll come down, and they'll come down hard.
My thoughts exactly

FL- I think they will be around, but just wont really grow, maybe they will eventually go back down to MCO where they came from rather then staying in Atlanta.

NK- Would say they will be very small, but since they just bought as many busses as they did, I dont think they will last very long, they can barely operate succesfully with what they have now, now they will have a ton of lease payments on a fleet that is like tripling in size.

WN- Will always be around, will lose in some markets, wont grow too much more as far as new cities.

F9- Having difficulties, should have stuck with the 737 series. I think they will last for a while, might beat United, but then someone else (NW, CO) will come to Denver, and that would be the end of that.

Independence- Well their current operations just go to show that they wont be around too long. Bad move by management

ATA- Time is almost up, they should have stuck to charters, maybe they should do that, go back to charters.

Midwest- Been struggling for quite sometime, and no, NW has nothing to do with their problems, NW has FF in Milwaukee which happen to what I believe is more then even Midwest has in Milwaukee.

Sun Country- They are quite the roller coaster ride, they seemed to be doing fine before, then they went bankrupt, now same thing is going on. They are a tough call. They dont have really hardly if any effect on NW.

Virgin USA- Wont last long, I dont think it should even be allowed, sorry Richard, thats just my feelings, just like CO, NW, AA, US, UA dont deserve to open a major hub in London and compete with BA, whether or not its something like CO, NW, DL UK etc. With British investment, it just doesnt belong.
 
spacecadet
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 6:36 am

In the past few decades, discount carriers such as People Express and Pan American World Airways failed, even after starting with a bang. But the new generation of low-costs have an advantage, according to Klebanow.

Ok, now, maybe my history isn't what it could be, but which Pan Am is he talking about? Are we on the third Pan Am now? Was there one in the middle that tried to be an LCC? I only know of the original Pan Am, which failed spectacularly, but only because it was once the most respected airline in the world - it certainly was ot an LCC. And I know of the current Pan Am, which is just trading on the name and only operates charters (as far as I know). Was there one in between?

As for PE, I don't think you can really compare them to B6. PE was never profitable - JetBlue has been (and still is?). Obviously, like in any industry, you need to be careful of rapid expansion, but it just takes good management to make a company grow and keep it profitable in the process. I mean every company started out small at one point and then grew up. Labor costs go up, sure, but you know it's going to happen and you plan for it.

He also seems to conveniently ignore SouthWest because it doesn't fit his argument. This was in many ways the original LCC, they're now a pretty old airline, and also one of the most successful financially.

I do agree that at some point there's not much difference between an LCC and a legacy carrier (especially as the legacy carriers have reduced service to the point where in a lot of cases flying them is actually a worse experience than an LCC), but that doesn't necessarily equate to financial distress.
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Lono
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 7:06 am

This article is also interesting... It shows what the future may hold for WN and the Legacies...

http://www.mysanantonio.com/business/stories/MYSA092604.01R.airlines.b08af773.html

Some interesting quotes


"Southwest's labor (cost per seat per mile) has essentially reached parity with Continental's and is likely to head higher on the heels of escalating flight attendant costs and next month's 14 percent pilot pay raise," wrote JP Morgan airline industry analyst Jamie Baker in a recent report.


"Our concern in the case of Southwest is that some employees — although handsomely compensated by most any standard — want a larger share of the pie, a share greater than the marketplace will support. And, in asking for more, that they will shatter the community that is Southwest, converting it into just another fractious legacy carrier in which most of everyone's energy is spent in squabbling over the shares of an ever-diminishing pie."

Things are getting interesting...

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DfwRevolution
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 7:13 am

He also seems to conveniently ignore SouthWest because it doesn't fit his argument.

My sentiments exactly...

This was in many ways the original LCC, they're now a pretty old airline, and also one of the most successful financially.

WN is probably in the best shape of any airline in North America right now. *If* the LCC market is artifically inflating, WN has the cash to weather over capacity, they are not in the process of massive expansion, and they have firm control of any debt.

As for PE, I don't think you can really compare them to B6. PE was never profitable - JetBlue has been (and still is?).

B6's profitablity has slumped, but they are not in the red. I might catch some flack for this, but I too believe B6 has some degree of financial distress ahead.

Nearly 300+ aircraft are going to be delivered to LCCs alone in the next 5 years, to put that in perspective, imagine doubleing WNs current fleet. I don't think the market can sustain that much capacty. The RJ strategy B6 is persuing could be especially risky, 100 aircraft of a new type *will* drastically bring down B6 opperating efficency.

B6 obviously won't end up with a DL-like fleet, but with LCCs, every single cent of overhead counts. Factor in the possible over-capacity situation, and B6 will not have smooth sailing....
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luv2fly
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 7:17 am

Again the new aircraft that B6 receives the 190's are considered real jets and not regionals. Also next year when they start to arrive we are only talking about 7 aircraft for 2005 with a additional 18 in 2006
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DfwRevolution
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 7:29 am

Again the new aircraft that B6 receives the 190's are considered real jets and not regionals

What does it matter? It's a new fleet type, it's taking every fleet related expense and mulitplying by two. WN has proved with the 737-500 that even adding a common family memeber, like the A319 for B6, ever so slightly drags down opperations.

A second fleet type requires more complex scheduleing, more complex maintenance, more complex everything. Every airline in the world is reducing fleet types, why is B6 leaving the paradise of a single type? To allow for rapid expansion.... right as 150 737s, 200 RJs, and 100 A320 all hit the market at the same time  Insane

I'm not saying the E190 will be B6's undoing... it will simply add an unnecessary degree of risk.
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Greg
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 9:48 am

The 190's will likely be an expensive mistake for B6.
With CASM nowhere even close to the 320's they've already diluted the cost side of equation.

While having revenue potential....deviating from the single fleet norm will likely cause some expensive hiccups. That, and the fact the 170's are running at much higher cost (estimated vs actual) for US (source: AVITAS).
 
JBLUA320
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 10:02 am

I'm really getting annoyed at all this jetBlue negativity. I'm by no means a "blue kool-aid" drinker, but seriously, isn't there a chance management has a strategy or plan up their sleeves that obviously we dont know about?

I mean, come on- jetBlue is going to have tough times ahead, and they are taking on a somewhat risky expansion... but for heavens sake I think the management has heads on their shoulders... And the PeopleExpress arguments are mostly unfounded. As stated above, PeopleExpress' demise was a combination of two main factors if I'm not mistaken- HUGE unprecidented growth with a ridiculously high casm, and not being able to pull a profit before or after this expansion. jetBlue IS pulling a profit, even if it is less than what was expected. Any financial quaters in the black should be a sign of good management. The major difference is PE went into a huge expansion without the money to do it. jetBlue has the money to take on an expansion, and its nowhere near as large as PEs was.

It's like living below your means. Sometimes, you make millions of dollars a year, but dont spend it so that if you ever hit problems down the road (lets say in a household situation, losing a job) you have a cash reserve on hand to help you through the hard times. This is exactly what jetBlue has done, and will continue to do.

The above article, in my opinion, is biased... but it does contain some interesting information.

JBLUA320
 
DfwRevolution
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 10:08 am

Isn't there a chance management has a strategy or plan up their sleeves that obviously we dont know about?

Yeah and I suppose U.S. has a secret weapon up their slevee, too?

It isn't that B6 has a fatal flaw today, but the factors that will come into play in the next 4-5 years, combine with the risky expansion they have taken, does cast doubt on their financial health.

Undeniable fact: there is about to be a huge jump in capacity. Even if U.S. liquidated, there are hundreds of aircraft about to hit the LCC scene and now is the time to be saving cash to weather the storm....
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JBLUA320
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 10:11 am

now is the time to be saving cash to weather the storm....

Undeniable Fact: That's exactly what jetBlue is doing, and has been doing since Day 1.

JBLUA320
 
burnsie28
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 10:21 am

now is the time to be saving cash to weather the storm....

Undeniable Fact: That's exactly what jetBlue is doing, and has been doing since Day 1.


They are just now starting to pay the price for SOME of their planes, so I dont think that you have a valid argument.
 
DfwRevolution
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 10:48 am

Undeniable Fact: That's exactly what jetBlue is doing, and has been doing since Day 1.

Day 1 was only 4.5 years ago.... you can't order 60+ Airbi and 100+ Embraers and expect to have a sufficent cash reserve in that short time span. B6 will have to deal with the growing pains that will arrive in the next few years, heavy maintenance, aircraft payments, ect...

B6 is not magically immune to the for/against every other LCC in North America. Their choices determin their fate... and I've laid out why I have some doubts in their long-term health-

A. They are undertaking bold (potentially very risky) expansion
B. They are undertaking this growth at a time when they are likely to encounter the growing pains after 5-10 years of opperation
C. There is going to be a surge of 300 aircraft (maybe 30,000+ seats) in the market
D. B6 advantage over legacy's like AA may begin to marginalize
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spacecadet
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 11:01 am

Well, let's use a little common sense here. The industry has excess capacity right now and it's probably going to even have more excess capacity in the near future (long-term things will work themselves out, but let's look at the short term).

Now, when you have excess capacity, fares drop but even with that drop, a lot of seats are inevitably going to go empty - that's what "excess capacity" means, after all. So passengers will pick and choose the airlines they fly on, and some airlines are going to get the shaft.

Now, which airlines are going to get the shaft in terms of load factors? Assuming all airlines compete on fares, it'll be the airlines with the poorest service, whether that's perceived or real. I think it's pretty much common knowledge among fliers now that JetBlue has leather seats, they've got DirecTV at every seat, etc. When presented with a choice between, say, JetBlue and UA on the same route, what are most people going to pick?

What I'm saying is I don't think expansion is a bad thing; I mean there are reasons companies do it, with survival being one of them. The bigger a company is, the better able it is to fend off challenges, whether they be labor costs, competition, or whatever. It's very hard for a small company to survive in any industry; if it's successful it will likely be swallowed up by a bigger competitor eventually, and if it's not successful it will go out of business.

Airlines are delivering a product like any other customer-oriented industry. And if the LCC's are delivering a better product at the same price, or a comparable product at a lower price, they will win, and the legacy carriers will lose. I mean this is true whether or not they have the same labor problems as legacy airlines, because the bottom line is they'll still have more passengers flying with them (better load factors), and that's where the money comes from. (I'm not saying they'll always be profitable overall, just that if two airlines fly the same route and one has a 95% load factor and the other has a 60% load factor, the former should be in better shape if that holds system-wide.)

So in the short term, these 300 new planes coming on the market are going to hurt the legacy carriers a lot more than they're going to hurt the LCC's, and the legacy carriers are in a lot more precarious of a position to begin with. They can't afford to be hurt in the short term. In the long term, the LCC's will probably experience a lot of the same problems as legacies and maybe their product will suffer as a result eventually, and a new crop of LCC's will pop up to take their place and the cycle will begin again. But I still think the current bunch of LCC's is in a much better position than the legacies given the product offerings and reputations among fliers.

Note that I'm actually not a big fan of LCC's - I don't like the greyhound bus mentality. I'm just trying to think objectively about the industry.
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AA717driver
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 12:10 pm

You could make the case that when AA began their rapid and massive expansion in the mid-80's there was no room. Guess what? They offered a superior product in terms of route structure, discount fares(remember super savers?) and FF program. They made room and PanAm, EAL and others paid the price.

Now, JB offers a superior product and customer service and may expand rapidly enough to drive the competition out of business. I don't understand the doom and gloom about the LCC's. THEY ARE MAKING MONEY DURING ONE OF THE WOST FINANCIAL PERIODS IN AIRLINE HISTORY. They now have much lower CASM's than the legacies and only have to keep doing what they are doing until the legacies start thinning out.

Question: How long can UAL, DAL and AA keep losing this kind of money?

Answer: For a shorter period than the LCC's can keep breaking even or making money.TC
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elwood64151
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 10:44 pm

Jetjack74:

Really? I think it's DL in bankruptcy right now, not FL. And B6 is not a "house of cards" as you so eloquently (not) put it.

Your statement is such that I'm amazed I've wasted my time on it...

FL- I think they will be around, but just wont really grow, maybe they will eventually go back down to MCO where they came from rather then staying in Atlanta.

Uh, hello? FL is nothing more than a merger of AirTran and ValuJet. ValuJet was the profitable venture between the two of them, and they were based... Where? Atlanta? You've got to be kidding!

"Southwest's labor (cost per seat per mile) has essentially reached parity with Continental's and is likely to head higher on the heels of escalating flight attendant costs and next month's 14 percent pilot pay raise," wrote JP Morgan airline industry analyst Jamie Baker in a recent report.

Southwest operates at a break-even point lower than any other airline. Their labor costs are in line with any of the majors. Don't tell me they won't be making money!

Every airline in the world is reducing fleet types, why is B6 leaving the paradise of a single type?

For the same reason Michelob released Michelob Ultra: To attack a niche. B6 will be using the -190s to fly into markets that their A320s can't efficiently serve. It's the same reason that FL went with the 73G: To reach destinations their 717s would require another hub or some kind of stop-over to reach.

It's not rocket science, people.

I don't think RJs are the correct answer, either, but if B6 was going to operate one, at least it seats around 100 people. I personally believe it should have been the 717, but that's just me...

but seriously, isn't there a chance management has a strategy or plan up their sleeves that obviously we dont know about?

What do you mean, "we don't know about?" They operate a tight schedule to profitable destinations, just like WN and FL. They've chosen to add another fleet type so that they can operate to cities where they would compete with FL, but not with WN.

Day 1 was only 4.5 years ago.... you can't order 60+ Airbi and 100+ Embraers and expect to have a sufficent cash reserve in that short time span. B6 will have to deal with the growing pains that will arrive in the next few years, heavy maintenance, aircraft payments, ect...

You're forgetting something:

A. B6 started with $175 million in cash.
B. B6 had a huge (several hundred million dollars) IPO.
C. B6 has never lost money.

(I'm not saying they'll always be profitable overall, just that if two airlines fly the same route and one has a 95% load factor and the other has a 60% load factor, the former should be in better shape if that holds system-wide.)

If, if, if... I worked for Vanguard. You know how many times we heard "If this...?"

Sorry, a bit of my devil's-advocate side there...

Question: How long can UAL, DAL and AA keep losing this kind of money?

Didn't AA just post an operational profit? I realize they probably won't make money on the year, but I think they're ahead of their two largest rivals in that regard...



So this article was supposed to be a wake up call? I didn't read anything new in there. Just a lot of repeating the same old garbage analysts have been saying about LCCs for years.

"Oh, they'll never be profitable."

"Oh, they'll never grow out of their niche."

"Oh, they'll just be taken over by the better financed major carriers."

"Oh, people will choose service over price."

"Oh, people will choose price over service."

"Oh, people want their Frequent Flier benefits."

"Oh, they're FF programs aren't good enough."

"Oh, they're FF programs might be good, but they don't fly to enough destinations."

And on, and on, and on, and on...

Get a clue: The LCCs are here to stay. Some will die off, so will some of the majors. It's a fact of this industry.
Those who fail to learn history are doomed to repeat it in summer school.
 
AA717driver
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 10:56 pm

Elwood--Great post. I was including AA because they just put out a warning that their losses for the third quarter will be more than three times as much as expected by the Street.

AA has been working on costs diligently but has a long way to go. I believe their CASM's are still in the $.11 range. When he unveiled the current plan last year, Carty said they plan to operate with costs approx. 30% higher than the LCC's. They anticipate generating revenue premiums of 30% over the LCC's because of their international and feeder routes. Obviously, the fuel prices are an unexpected event. But until the Middle East is stabilized(?! Insane) you will have occasional spikes in fuel costs.

None of the Legacies are in any position to comfortably ride out big drains on cash/revenue.TC
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AngelAirways
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 11:02 pm

I see no reason why you call B6 a pack of cards. They are one of the most sensible airlines in America in a long time.

The E190 strategy is great. There is one risk: that somebody else takes over their intended markets before the 190s are delivered. And even then, B6 will probably manageto eat its way in.

As for fleet types: easyJet have been running 737 and 319 mixed fleets for a while. As long as your fleet is above a certain size of about 50 aircraft, the a/c type justifies itself, especially if maintenance is outsourced. EZY are extremely happy with their 319s.

It is the smaller underfunded start-ups that are more likely to go down.

 
UALPHLCS
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RE: Some Reality For The LCC Fanatics

Mon Sep 27, 2004 11:18 pm

I'm glad to see that someone has written something that will burst the LCC fans bubble. LCC's really are NOT doning thing vastly diferent from the "Legacy" carriers to make money. Having a brandnew workforce, and new fleet are enough. If that's the case then we an expect all the Legacies to die in a few years, WN not much longer behind them. The only way to make money in the airline industry is to open a new carrier run it for 30 or so years then shut it down before your costs get too high.

Clearly, this is not a viable way to run an airline or industry. There will be Full service carriers and low cost carrier, they will all have thier niche. But if you think a LCC can maintain it competive egde in the face of an aging workforce and fleet, then your sorely mistaken.
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TomFoolery
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RE: Some Reality For The LCC Fanatics

Tue Sep 28, 2004 12:37 am

I think the next step is that the LCC's will capitalize on alliances with other LCC's , especially on an international setting (international, not trans oceanic), ie a US and Canadian, Mexican, and/or Caribbean LCC alliance. In Europe, there is Air Berlin, and TUI, mainly IT charters, but both are conglomerates, that as a whole are very strong.
I dont see too many problems for some of these LCC's because of their flexability. Some will come and some will go, but isnt that true with the "Legacy" or old timer companies too? Look at PAA, and EA, just to name a few. Fact is, the whole industry is changing, and evolving, those who cant make the changes to keep up will be left behind in the land of chapter 11.
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Boeing7E7
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RE: Some Reality For The LCC Fanatics

Tue Sep 28, 2004 1:20 am

Midwest- Been struggling for quite sometime, and no, NW has nothing to do with their problems, NW has FF in Milwaukee which happen to what I believe is more then even Midwest has in Milwaukee.

Midwest serves a niche long forgotten in the anals of aviation. They will continue to pursue and succeed in that niche. They'll probably be an all 717 carrier before too long, but they will be around serving the large hub airports that have lost real First Class service. Look for a move though. MKE will be a regional hub/focus city down the road, cross country markets will be targeted at MCI and they may make another run at IND when the new terminal is open and the market settles.
 
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EA CO AS
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RE: Some Reality For The LCC Fanatics

Tue Sep 28, 2004 1:50 am

Really? I think it's DL in bankruptcy right now, not FL.

Wow, I must have missed something major in the news - when exactly did DL file for bankruptcy protection?  Yeah sure
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Chiguire
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RE: Some Reality For The LCC Fanatics

Tue Sep 28, 2004 4:40 am

What about the European LCC market. It is definetly more overcrouded than the US market. Who would survive here ? We have already heard about V-Bird in another threat. Who apart of Ryanair and EasyJet could survive ? Maybe even one of those two might come in trouble within the next years if everything turns out to be as discribed in that article.
 
elwood64151
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RE: Some Reality For The LCC Fanatics

Tue Sep 28, 2004 7:25 am

But until the Middle East is stabilized(?! ) you will have occasional spikes in fuel costs.

Only due to the speculation of idiots in the commodities markets...

It is the smaller underfunded start-ups that are more likely to go down.

Depends on the market they're trying to meet. If their primary market is tourist travel to the obscure areas of Florida and smaller carribean islands... But then, those aren't really competing with Legacy carriers, are they?

Even still, some niche markets might allow an LCC to establish itself...

LCC's really are NOT doning thing vastly diferent from the "Legacy" carriers to make money. Having a brandnew workforce, and new fleet are enough. If that's the case then we an expect all the Legacies to die in a few years, WN not much longer behind them. The only way to make money in the airline industry is to open a new carrier run it for 30 or so years then shut it down before your costs get too high.

Um, no. The object is to take what you have and run it in a profitable manner. This usually involves intelligently utilizing aircraft and other fixed assets while aggressively marketing your product to the masses... WN has been quite good at this. So have FL, B6, and F9. AA was one of the best in the 1980s and 1990s. We'll see who's best in the future...

Midwest serves a niche long forgotten in the anals of aviation.

Don't you mean "annals?"

Wow, I must have missed something major in the news - when exactly did DL file for bankruptcy protection?

Pardon me... "Threatening bankruptcy" should have been the term I used...
Those who fail to learn history are doomed to repeat it in summer school.
 
jpetekyxmd80
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RE: Some Reality For The LCC Fanatics

Tue Sep 28, 2004 11:14 am

It kind of annoys me when people constantly talk about Midwest as an LCC. Yes, they have cut back and created Saver Service to bring down costs to compete. You just cannot compete with anyone on prices when you have 2X2 leather seating on MD-80s. It was acknowledged that there was not that premium market there on leisure destinations and youre just not going to have people paying more to fly them when they're going to places such as Las Vegas. To be honest, the prices are not very LCC low and most of the time just match/compete with Northwest's similar prices. The service levels and pretty much all facits of the airline go above and beyond the mainline variety. As for meals, while its quite a change for Midwest, but you wouldnt be getting much flying a major either. And there are always of course the luxurious new 717's for the high yield destinations, now tell me thats an LCC.

YX has simply been adapting, and trying to use the LCC model to succeed/stay afloat, but i think the low cost side of it is mostly a marketing thing, or saying 'were cheaper than we used to be'. Due to their history, and even present, Midwest cannot be considered an LCC in my book.
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tavong
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RE: Some Reality For The LCC Fanatics

Tue Sep 28, 2004 11:39 am

PAN AMERICAN WORLD AIRWAYS A LCC??? Can anyone help me to catch this one, i always tougth that PAN AM (I suppose that tyhe article refers to PANAM-1) was a legacy carrier or i misunderstood when tranlating it???

Gus
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Boeing7E7
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RE: Some Reality For The LCC Fanatics

Tue Sep 28, 2004 1:03 pm

Don't you mean "annals?"

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frugalqxnwa
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RE: Some Reality For The LCC Fanatics

Tue Sep 28, 2004 1:32 pm

Legacies rule!!!!! Oh dear, did I post that out loud?

Seriously, I expect some LCC to hit hard times soon, including WN. Their recent concessions to the flight attendants are one cause of their rising costs, along with the afore mentioned pilot pay increase. I would expect them to post a loss in '05 or '06 if oil prices don't improve.

As for which airlines I expect will survive, here goes:

LCCs,
FL
WN
F9
I-Air, if US goes under.

Legacies,
NW
CO
AA
UA(?)
DL(?)

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