Originally Posted by
redhot
doubling the size = a larger network and way better CC revenue. Why do you think frontier is so heavily invested in building loyalty right now. They know there’s no money in the actual fair, thus why we are getting a new app, first class, and completely redone loyalty program. It’s all about building a product that stimulates Credit cards.
If you go back and listen to earnings calls/investor summits then you will hear him say having a larger airline needs to occur along with partners around the world to make people buy into your airline CC.
if frontier would have overpaid for spirit they would have moved forward during bankruptcy and bought spirit then. they were cost disciplined and rejected the counter proposal. Everyone can talk smack about indigo but they are not bad investors.
End of story, this business is all about scale.
Bigger is better. There’s no question about that. I don’t dispute that for a minute. For a variety of reasons it’s better. But, it needs to be done intelligently. Which is half the reason Barry and Frankie keep walking away from NK. I’m def not an F9 or indigo cheerleader, but I agree they’ve been prudent while NK has gotten a little too big for her britches.
You throwing more 240 seat planes on unprofitable routes after over paying for a company that comes with a ton of debt, and no new markets, is what I have a problem with.
Planes need to go places, on profitable routes, with sufficient frequency to attract the credit card customers you speak of. This is especially true for the ULCCs, which as I said before, still makes their money primarily from moving pax.
We also have the unfortunate luxury of trying to find undiscovered routes or trying to break into heavily fortified routes. We also have to figure out these routes based on a 190seat or 230/240 seat aircraft. We don’t get the luxury of adjusting aircraft when demand fluctuates. When was the last time F9 chased a competitor from a route? Or has it been the other way around? My memory tells me it’s been the latter.
Basic rules of economy and supply and demand doesn’t change just by multiplying by x2.