Originally Posted by
sailingfun
Raising additional capital might not be as easy as some think. They probably will need to negotiate with the 3 main capital providers depending on the terms. Raising additional capital would reduce the value of the original trenches. I am sure they can find the money but they will pay a huge interest premium since they have no assets for collateral. Maybe DN will pony up some of his own cash this round! Most startups as posted struggle a bit. I have never seen the kind of negative margins Breeze is posting. JetBlue was profitable within a few quarters of starting operations. Avelo is running single digit negative numbers but very manageable.
One thing for sure, when wallstreet gets back to work next year DN is going to be having some very serious discussions with the investors.
JetBlue was started during a much different industry climate, cheap fuel, lots of pilots available etc. Avelo is probably looking at short term operations before they sell, who knows. DN is betting big a different way now on underserved markets. The more RJs get parked and the more legacies abandon secondary routes due to rising costs, the better Breeze does. The one really good thing we have going is customer satisfaction, apparently it’s the highest in the domestic market, it’s no surprise though if you’re bypassing hubs to get to where you want to go. In this industry if people want to fly you, things usually workout in your favor. It would certainly be much easier to get funding.