Thread: Growth
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Old 02-19-2021, 05:34 PM
  #27  
gloopy
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Joined APC: Jul 2010
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Originally Posted by Excargodog View Post
It will be interesting to watch and if business and international flying returns quickly enough perhaps even possible, at least for Delta. But right now UAL and AA are still burning money at a rapid rate and their last bond sales demanded an 11 and 12% coupon respectively. Both are digging deep financial holes, especially AA. And even when their business and international rebound, both are going to have enormous training churn - esp. AA.

Expecting either of them to compete effectively against the ULCCs for the low end leisure flying is probably asking them to capture a bridge too far.
To a point. But competing against the LCC crowd is baked in. They already do, and will always plan on growing into, any legacy's markets. If they nibble very, very slowly and rationally, then they can grow for a while while they get their footing underneath them. But if they intend on economically harming the legacies too much too soon, they have to be ready to harm them back 10 times as much.

Many of them aren't just coming for beach market supersavers anymore. They're after first class, lay flat and soon trans Atlantic, complete with code shares and feed. Mutually assured destruction is the only defense against that because if their initial salvos work, they will only be emboldened to keep growing that strategy endlessly.
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