Well, I would argue it's not a 'gross lack of understanding of basic accounting,' and more of an inability to effectively communicate on a forum. If we ever fly together, I'll be happy to teach you a thing or two over a beer. I typically bid LGA trips, and I'll bring this topic up so you'll know it's me.
$500+ million spent on stock buybacks in a quarter with only $292 million in net income is an opportunity cost! Think of all the things that we could have spent that money on, and labeled it as 'special charges' and not against the direct operating cost which would impact CASM.
Yes, they have a very concise capital budget plan, but it is extremely short focused.
Yes, Wall St is focused on reducing our costs, but I laugh when I see an increase in EPS, because we are reducing the number of shares.
Delta is putting billions of $'s into LGA's C & D terminal. Why? Because the economy is booming, and they have the cash now. They are not waiting around for a better time. What are we doing with Dulles? We are living in a temporary trailer park, with no plan for improvement, except a hope that MWAA will save us. Hope is no strategy. Amazon is moving how many jobs to DC?
GEMINI is the company pricing tool, and I would bet $ to donuts that it is focused not to optimize profit, but to increase capacity. Yes, PRASM is tracked precisely as well, but my argument is that capacity is a bad strategic target.
Invest in the product first, and for the long run, and with a good product, capacity will follow. Instead, we are focusing on capacity now, with a strong eye on CASM and PRASM, and missing the opportunity cost of the money we have today.
The PS numbers are cooked at the beginning of the budget year. If we are having a good year, we will simply add capacity "to regain what we previously gave up in the market" and hit our targets.
When the economy hits the next recession, our strategic capacity goal will be useless, when we could have spent it on an improved product.
Yes, the 5-7% target is a good guess, but not because of your current numbers, but historical precedent. We will definitely not see greater than that, but there is plenty of potential for less.