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
. 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.
had a huge (several hundred million dollars) IPO.
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?
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.