The people that fly Spirit and Frontier are the least likely to be able to afford to fly during a recession. So to state that ULCCs will weather the storm in a recession remains to be seen.

 

Correct. And people on the fence now flying Big 3 won't be able to justify it during a recession if Frontier / Spirits offers that same flight 70% cheaper.

Further more what you will see during a recesion is focussing more on hub cities (DEN-ATL) vs expanding into new markets during a good economy (LGA-SJU etc etc)

Now, Big 3 will see some increase from Netjets etc passengers who can't justify doing that anymore during a down economy, but it won't be enough to make up for the amount of "normal" people flying LCC's instead paying 300 bucks more for a coke on that same route.

 

Ridiculous post. You have no idea how a recession effects people of different economic classes.

Just look to Spirit for results during the last recession. They blossomed. In addition negotiated one of their best contracts during that recession while everyone else was flying on concessionary contracts.

 

The reality is that for the most part, the legacies will retain their loyal frequent fliers. Those mileage points are important.

It's the non business travelers, the people who fly 2 trips a year that will shift down to Frontier. But if you look at what kind of companies do well during recessions, its always the ones that cater to low costs. That's frontier. And, we are in a position to remain profitable longer into a recession that the big boys with their substantially higher operating expenses.

During the last recession, the ULCCs grew. In Europe, the last recession completely changed the market. Now Ryanair, EasyJet and Wizz dominate. In the US, Spirit took off. I'll repeat something I mentioned earlier in this thread. During the last recession, two of the best performing stocks were McDonald's and Walmart.

Also, just to poke a little fun; if you are looking to NetJets customers to fill your planes during a recession... you're going to have a bad recession. It's hard to fill 750 mainline jets with the .1% of the population

 

Wal-Mart and McDonalds provide staples. Vacation and flying is not a staple. I think too many of you think recession flyers will trickle down to the ULCCs and they’ll be enough traffic for all. I don’t see that happening.

 

Guess which 3 airlines made money in 2008....

 

True, those companies are staples and we are not. It's certainly not a direct comparison. One thing that Frontier has going for it though is that we don't need all that many people to trickle down to us. Having 100 airplanes is a lot less seats to fill than a 750 airplane fleet. So, say a big bad bear rolls into the economy, some of our folks stop traveling, and some folks buy the cheapo Frontier ticket instead of their usual United ticket.

I'd be more scared to be the largest airline in the world with rising costs, than the smaller guy with the lowest costs in the industry.

Thar being said, as the Forbes article explains in great detail, the industry's shift to increase ancillary revenue will help all airlines survive. Which is good for everyone. Hopefully we never see chapter 11s and pilot pay concessions again. Anywhere.