Originally Posted by
Chimpy
Well, looking at the 10Q I could be wrong but.... it looks like the "operation only lost" $63,000,000 in the first 9 months of the year. They took a write off to purchase $150,000,00.00 of ground equipment, and wrote off $100,000,000 in deferred heavy mx (whatever that means). Total wages & Salaries went up by 30% but ASMs only went up by 15%. They Sold 100M worth of owned AC but spent $600M more on A/C rent. Seems like not being able to Staff, (too little, too late contract cycle wise) not expanding training dept quickly enough, displacing people to staff new bases (causing more attrition) which prevented us from flying the A/C we already had and now we have this Pratt Issue that is further going to hurt. It seems like the ULCC Model is losing some money, but the real issue is mishandling of crew & Aircraft capacity?.... I dunno, could be way off but seems like maybe it's more of a management related issue than Business model?
I found this quoted on another message board, not sure the source:
"The culprit according to Spirit is “softer demand for our product and discounted fares in our markets.” I will actually touch on that more tomorrow when I look at Frontier, but suffice it to say for now that there is a ton of capacity in Las Vegas and Florida where the ultra low cost carriers are concentrated, and demand is just not there to support it all.
In Q3, Spirit’s unit revenue plunged 17.4 percent to 9.14 cents vs last year. Overall total revenue per passenger dropped 13.5 percent, but it was only that good because ancillary revenue stayed fairly flat. Actual fare revenue dropped a shocking 27.8 percent year-over-year. As you’ll see tomorrow, this impacts Frontier as well, but the difference is that Frontier says it sees things stabilizing. Spirit says otherwise. We continue to see discounted fares for travel booked through the pre-Thanksgiving period. And, unfortunately, we have not seen the anticipated return to a normal demand and pricing environment for the peak holiday periods."
Having more jets and seats in the air will definitely not help the current ULCC situation.