Originally Posted by
kansas
AMR operates 6,700 flights per day. We have about 300. Them losing money to match our prices on ~100 flights per day won't cause much more than a small dip in their profits. But it will significantly affect us.
we are making 20% profit margins and have a <.06 cent CASM. They are going to have to drop their prices quite a bit lower to affect us to the point where I would get too worried. Plus there are laws against predatory pricing. They can't just one day say "let's sell all markets where we compete with spirit for $2 per seat until they go out of business". They would have to lower them slowly over time and have some plausible reason to do so. By that time we will be over 100 planes. Then if it gets to where the ULCC market can't make any money, Spirit and Frontier will merge into a large enough airline that it won't matter.