As long as the economy is growing and oil is low, they'll all be right.
Everyone's a stock market expert during a prolonged bull.

True metal will be shown what happens during next recession/oil spike.

 

Allegiant will probably do better in the next recession compared to its peers.

Unlike other airlines like WN or UA with massive orders of new planes to pay for on a monthly basis, Allegiant planes are old and paid for. The flight schedule can be reduced, and while revenue will also be reduced, expenses like fuel/salaries will be reduced by a corresponding amount. Meanwhile at other airlines they will be forced to fly new and expensive planes at a loss just to keep any kind of revenue coming in. This is just history repeating itself.

 

First off, Allegiant has orders 12 new planes. Secondly, Allegiant is not the only airline buying used planes. WN and UAL, among others, are buying used, and have been doing so for quite a while.

https://www.bloomberg.com/news/artic...d-me-down-jets

https://skift.com/2016/05/12/u-s-air...ond-hand-jets/

History repeating itself? Hardly. AAY's former President, Andrew Levy, is now the CFO at UAL. Evidence that legacies are laser-focused on ULCCs and doing what they need to prevail, including joining in on the low cost model. Yes, legacies have mature labor contracts, but AAY pilots just signed a contract containing a 30-40% increases in pay, retirement, benefits and improved work rules? Other labor groups are likely to follow. New planes, new contracts, no longer looking like ULCC.

https://www.usatoday.com/story/trave...ited/98213256/

Allegiant may own some of their aircraft, but like others, they (wisely) lease or finance aircraft depending on the benefits of tying up cash vs. the cost of borrowing money. If I'm not mistaken, they elected to finance their latest purchase of 12-14 factory new airbii. When money is cheap, airlines tend to finance aircraft and spend cash elsewhere. If one is looking for stronger indicators, the balance sheet (assets/debt) is more telling as it allows for a company to buy down debt if needed in a pinch.

BTW, WN also owns over 80% of their aircraft

https://www.quora.com/Do-Southwest-A...nt-their-fleet

Don't get me wrong, I congratulate the AAY pilots and appreciate them raising the bar. I wish AAY the best, I just don't believe others are sitting idle while they, Spirit, Frontier invade their markets. Spirit took a beating last year because it took on the legacies and and lost. Allegiant has been wise staying under the radar and focusing on under-served markets. Time will tell whether they stick to the winning formula or morph into other successful enterprises.

https://www.fool.com/investing/2016/...overy-tak.aspx

 

The 12 new allegiant planes were a one-off deal from airbus, because they were the end of the line and came with extremely attractive financing and pricing. In the last earnings call, it was mentioned that the purchase and lease-back deal actually contributed to earnings due the amazing deal.

Not to disparage WN, which has always been amazingly managed. But in your previously deleted statement, saying they pay for the planes is similar to someone saying they bought a house with 20% down.. and they own their house. They still need to make the payments, and there is still a financial duty to provide a good return on capital.

 

Glad they got a smokin' deal financing their new planes, the point is that AAY is no less leveraged--or vulnerable, than others in an economic downturn or spike in oil. They own/finance/lease aircraft, pay for maintenance, fuel and payroll like any other airline. Like others, their costs are rising but Allegiant has a great business model.

The link provided shows WN owning 80% of their fleet. Like AAY, how much WN or UAL pays down vs. borrow or lease on whatever aircraft changes daily and is somewhat irrelevant given today's cheap money. Sometimes it's wiser to borrow. Whatever the case, a strong debt/asset ratio ensures ownership factors will not determine whether an airline survives a downturn. Solid business plans/practices, strong balance sheets, cost structures and risk mitigation are what determine an airline's fate, not whether they own planes or not. There is a race to the bottom and the big guys aren't sitting on the sidelines.

If, as you say, history repeats itself, AAY might be in trouble. Looking at the track record of small airlines, most have been absorbed or driven under by the big ones. I hope that doesn't happen. Again, best of luck to you guys.

 

Hey guys I'm an FO at a regional with 2500 hours just wondering what the possibility of getting hired right now would be?

What are the upgrade times looking like?

 

You have 2500 hours and you're wandering about upgrade times?

With your experience you might be able to get one of the street Captain slots. Do you have anybody that can recommend you? If not you need to get over right away to one of the meet and greets they have and fill them in on your inquiry so they can get you in asap.

 

crxpilot.....

I'm fairly certain you do not get along well with others. Pretty sure no one likes you. I did not ask you to comment rudely. If you do not have enough intelligence to look towards the future do not fault me for doing so. Did I say anything in the realm of hey I'm not coming if I can't upgrade now? I do not believe that I did.

In saying that I have 1200 hours of jet 121 time which is more than enough to upgrade at any regional. Do I think that I could come over to a new airplane and upgrade right away? Hell no I would need experience on that airplane. Would I want to wait ten years to upgrade once again no.

Quite honestly your comments were not needed so keep them to yourself. If you have anything intelligent to say I would be happy to listen.

 

I would say your a little lower on TT than the typical accepted applicant. We have had a few guys come in around 2500 hours, but we're mostly military from what I've seen. The most junior upgrades are happening on the MD80, and mostly are taken by guys who are less worried about equipment and base... Those concerned with base and QOL tend to stay in the right seat until they can hold what they want. The first group of folks can upgrade in as little as 13-15 months (most likely increasing), as of today.

 

You say AAY is no less volnerable yet they, along with WN were the only airlines to make a profit throughout the complete last recession which speaks for itself. They have a few competitive advantages to help with that while you could argue WN only weathered the storm in the black because they hedged their fuel. I've never seen a small airline in history have 80% of their routes with zero competition and the highest profit margins for any airline. There isn't much else in common with historic airlines other than the size of the airline and previous maintenance issues.