Originally Posted by
Denny Crane
When evaluating this TA, you cannot just look at the TA itself. You also have to evaluate the macro economic environment it has been negotiated in, where you think that environment is headed, how long it will be before you enter into negotiations in the future, and the possibility of "black swan" event happening while you are negotiating.
When adding in those factors, I gotta say I'm a yes.
Denny
We may not even need a black swan. Revenue has been in decline for almost the last two years masked by fuel prices dropping faster. Management has made repeated promises and set several dates when that would be corrected. So far they have missed every prediction on reversing the trend. I suspect 2016 will be the highest profit year. 2017 should not be bad since the fuel hedges are mostly done but increased personal costs will offset it. Fuel at 80 to 90 a barrel combined with a continued drop in ticket prices would probably push us out of the 20% profit sharing bucket completely.
We will see if the latest capacity cuts stem the tide.