Originally Posted by
howardhughes8
Further erosion of profit margins. This is like quantitative easing from the Fed. When they try to snap rates back up customers will balk and look for cheaper option and/or walk. Fedex likes to fly their packages, UPS trucks as much as they can. Creates less opportunities for the airline but better for business. Flying packages at ground rates is simply unsustainable with the cost structure that Express has.
True, a short term loss in margin to gain market share is a loser if you don’t change anything. However, if they are angling to penetrate the market in new ways (I.e. dollar store locations), then cornering that market early with low prices could certainly be beneficial long term.