Originally Posted by
I was inverted
Delta is printing money currently and still reporting strong demand. They aren’t being hit near as hard as ULCC/LCCs. I wouldn’t use one juniorish widebody guy’s schedule as an indicator of overall demand or financial performance for an airline.
https://finance.yahoo.com/news/delta...123534942.html
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Revenue grew 13%, and we achieved a 13.5% operating margin. This resulted in operating income of $2 billion, bringing our operating profit over the last 12 months to over $6 billion.”
“We expect our December quarter revenues to be 10% higher than 2022, with a 10% operating margin and earnings of over $1 per share. This brings our expectation for full year earnings to over $6 per share on a double-digit operating margin and free cash flow of $2 billion. Since raising full year guidance over the summer, our revenue outlook has improved”
meanwhile, JBLU and the ULCCs are losing money for Q3.
im not saying things will be great at big3 legacy carriers forever, but they are a lot better off, at least for now, financially.
Then you got one money losing company (B6) spending about $5bn to buy and integrate another money losing company (NK) with mostly incompatible networks that will need major post merger adjustment, with rising costs and interest rates, rising fuel prices, and dissimilar client bases that will also need adjustment. What could possibly go wrong. Oh and both company’s current market caps combined are currently less than the purchase price of spirit. I’d be worried enough with no merger at B6. But the merger looks like a recipe for financial disaster for the company unless things turn around dramatically in the next year or two. B6 employees and shareholders better hope the judge in this trial saves B6 from themselves, imo.
I don't have all the answers, obviously. We have seen airlines lose money for a LONG time and take on a LOT of debt (AA) and survive until things improve. But it's notable that the airlines that are doing the best right now are doing so because of the scale and network they achieved through previous mergers... And of course their international networks, which was also largely enhanced through previous mergers.
So JB staying small/independent and just trying to grind it out against these giant airlines, one of which is actively trying to snuff the airline out entirely, I don't think is a viable plan. The mergers have given those big airlines the scale to lose money intentionally on routes they compete with JB, because they can just make it up on all the routes they have a virtual monopoly on in their fortress hubs. I think the best outcome is to get a quick resolution from the courts, and for JB management to do what they have to do to get all JB+NK employees rowing in the same direction while corporate focuses on executing a fleet/network integration the best they can. I believe the recent changes to JB pilot profit sharing is just step one towards a full JB+NK company plan, and if you've had a front row seat to how that transformed the way Delta employees treat their customers it would give you some hope.
Spirit customers are not high value customers, nor are they frequent flyers. We are chasing them or needing them, or even really want them en mass. We will be realigning the product and network to take more of the big 4s customers, and to be more attractive to our own customers.