Originally Posted by
Bucking Bar
Just always remember:
RASM-CASM=Operating profit
What makes the RASM or the CASM matters not. A MD90 could be a 757 replacement, a Next Gen CRj900 could replace a 757. A 737-900 could replace a 757. They all can attach to a jetway and fly 1,000 miles at around Mach .79. (The CRj actually does the profile better than the Douglas product, hey, 50 years changed the way they build wings)
Gloopy, you say they "suck at math." Not really. They suck at forecasting markets five years into the future when an airplane acquisition is really a 15 to 20 year look see. They also tend to screw up and make deals that looked good at the time, but which fade when the variables change.
That's what I mean. They are as awesome at math as the real estate bubble flippers or the dot commer IPOers at the peak. But like you said, they can't look more than a couple years over the horizon.
I think they are making the same mistake again now with excessive "capacity discipline" while the LCC's collectively have a gigantic order book for growth. Something will have to give there eventually. I also wonder how kindly the legacies will take to LCC's and SWA continuing to poach new market share. I know the sleeping giant will be awakened as soon as they start to widebody flying over the pond, but will it really take that long to generate a massive backlash?