Originally Posted by
full of luv
I know what opinions are like.... but I'd say in general a rapidly rising fuel price will hurt Spirit (or any other LCC) harder than a major.
When fuel is low, labor is more of a factor in expense. When fuel is high, labor is a smaller factor in expense.
Throw in the ability to hedge with the larger companies (which lately hasn't helped squat), and you have kind of an ability to provide "fuel price insurance".
Of course a rapidly rising fuel price usually puts the brakes on the economy as well, so it doesn't help anyone, but in general I think the LCC's are more affected.
JMHO
As far as why NK's stock has sunk now..... no idea.
The rapid rise of 08 put everyone on their laurels. SWA obviously fared better from a lucky hedge (apparently not so lucky this year to the tune of $308 million?). However, when fuel was in the 80-$110 a barrel range from 2010-14 and fairly stable, Spirit grew at a rate of almost 30% (??) a year, while increasing operating margins and profits. I can only think of one other who grew, almost to their demise, and had to stop.
And everyone else, SWA included, pretty much practiced "capacity discipline".
.....Past performance is not indicative of future results.......
