Originally Posted by
forgot to bid
I am going to bet, imho btw, that we'd do alright in that situation. Not only because of Trainer but because if oil prices spike this weak economy is probably going to crash some more.
If that happens then demand may drop and prices may have to drop and UCAL and AMR will have to pay for those modernized fleets plus deal with their large 50-seat fleets with less revenue. We have a less expensive fleet to maintain on routes where revenue would take the largest hit.
I've heard it said on the missions they run the 88 fleet even with old engines is pretty cost efficient.
I also remember prior to 9/11 how CAL had this new fleet and all these newly leased airplanes while NWA and DAL had old fleets. 9/11 happens and Bethune hit the panic button real quick, if felt like they were operating with maxed out credit cards. It was not an enviable position.
I could be wrong.
I've heard that MD90/88s basically covers there operating expenses the first week of each month. Essentially the last 3 weeks of the month are more or less straight profit.
Contrast to 320/737 tend to only be profitable the week/week and a half. Mainly because of the high expense of financing associated with the fleets.
I believe if oil were to spike, trainer would starting bringing in higher returns. I don't really know all the numbers specifically, but I believe the facility was purchased directly for this reason. Offset bottom line losses when fuel spikes.
Personally, I tend to be more concerned with the student loan bubble.