Originally Posted by
dracir1
This only works for the short term. Eventually, that rate of ROI starts to dwindle as other "issues" become apparent - like labor discord, etc.
Indigo is making chump change compared to what they could be making - the real ROI is in the LONG money (especially now in these times). F9 posted around $189 million net income (from 2Q17-2Q18).
https://www.transtats.bts.gov/carriers.asp?pn=1 They could EASILY double or perhaps triple this amount with multiple destinations and multiple flights per day between (just like SWA and the Big 3) within the next 2-5 years. Of course, it equates to less profit per passenger but the VOLUME of passengers is so great, the profit is much higher. I'm not mentioning anything profound here - but to think that Indigo couldn't be doing much better than they are is silly. The model works - cheap aircraft leases only go so far if you have no one to fly them. What makes more sense: doubling your labor costs for pilots but tripling your overall profit or staying status quo?
Of course, that assumes they actually want to keep F9 and be serious about being in the airline business...
I'm just saying that these bottom barrel models in many industries exist for a reason; because they typically flourish, at least to an acceptable degree.
What you're proposing is "low fares done right." Absolutely true, they would make a killing. My point is: that would take desire, thought, energy, risk taking, and airline (not private equity) businessmanship.
You're talking about what could be. I'm talking about what is. You're giving them the benefit of the doubt that once the current practice no longer works so well, they will suddenly change stripes and become something they are not. They simply don't have what it takes inside of them to do it.
As far as all the new airplanes coming? Just a bigger version of what I fear is here to stay.
As far as no pilots to fly them? We'll get a new contract, and it will be the minimal give they have to give to bring in just barely the required level of candidate with the necessary training potential to operate the aircraft safely.