I think if there is a more broad recession, which is entirely possible in the next year or two, then the ULCC argument may hold water. I think the theory behind it is that when everyone is hurting, more of the traditional legacy customers will “trade down” to save money. Problem is, how bad does it need to get before that happens? And with the way our product is delivered, will that actually happen? This is when our product and our operational issues will bite us. It will keep people from trading down. If we had friendly customer service and a modicum of good operational performance it would be an easier pill to swallow for the trade-down customer. The legacies also have the advantage of loyalty programs that will highly entice people to stay with them.

I think that the truth is that we are in a period of long-term, macro-level changes in consumer behavior and industry strategies and we simply don’t know how things will play out because there aren’t many similar setups in history to look back on. This industry is completely different than it used to be based on consolidation, economies of scale, etc. that looking to the past may not be a 100% good strategy.