Franke’s recent speech at CAPA Masterclass
05-23-2020, 11:03 AM
#1
Gets Weekends Off
Thread Starter
Joined APC: Aug 2016
Position: Bus CA
Posts: 658
Franke’s recent speech at CAPA Masterclass
https://centreforaviation.com/analys...-placed-525409
An interesting read from CAPA’s Masterclass, with guest speaker Bill Franke. I found this quote from Franke the most fascinating. Although it could be negative for us, I believe it’s more likely to be neutral or positive for Frontier. If they come out guns blazing this fall and capture market share, we could see the need for more aircraft than we currently have on order. I acknowledge his comments are in regards to the 2023 aircraft order and I am being very optimistic.
From the article:
“In 2017 Indigo placed a massive order with Airbus for 430 narrowbody aircraft, for operation across its four airlines. Mr Franke remarked that delivery of those aircraft would not start until mid-2023, and Indigo has flexibility to move the aircraft around airlines in its portfolio.”
An interesting read from CAPA’s Masterclass, with guest speaker Bill Franke. I found this quote from Franke the most fascinating. Although it could be negative for us, I believe it’s more likely to be neutral or positive for Frontier. If they come out guns blazing this fall and capture market share, we could see the need for more aircraft than we currently have on order. I acknowledge his comments are in regards to the 2023 aircraft order and I am being very optimistic.
From the article:
“In 2017 Indigo placed a massive order with Airbus for 430 narrowbody aircraft, for operation across its four airlines. Mr Franke remarked that delivery of those aircraft would not start until mid-2023, and Indigo has flexibility to move the aircraft around airlines in its portfolio.”
05-23-2020, 12:11 PM
#2
Gets Weekends Off
Joined APC: Oct 2009
Posts: 3,108
I agree there is a huge opportunity here for Frontier.
American and United have to burn the furniture to stay alive and our management is going to **** away $500 million plus by not offering an early out similar to Americans. They’ll show us!
Meanwhile Frontier jumps in and fills the void. A huge void.
American and United have to burn the furniture to stay alive and our management is going to **** away $500 million plus by not offering an early out similar to Americans. They’ll show us!
Meanwhile Frontier jumps in and fills the void. A huge void.
05-23-2020, 12:13 PM
#3
Gets Weekends Off
Joined APC: Dec 2009
Position: what???
Posts: 173
I can’t imagine F9 gets more of the 430 A/C order. Probably just stays the same as I’m sure the U.S. market will remain a vital part of the equation to Indigo. I did like that he said he’s still relatively comfortable with the order, and the quote the from Herb Kelleher he mentioned about the trouble with ordering a lot of airplanes is that you have to fly them someplace was pretty funny.
05-23-2020, 12:40 PM
#4
Bus Driver ordinarie
Joined APC: Aug 2015
Position: Airbus CA
Posts: 555
The fact he’s not saying ‘we’re overstaffed by 50%’ or ‘we’ll cone out of this a smaller airline’ or the like is very reassuring. But I do think our growth will be a function of the overall health of the economy; and no matter how wounded the majors may look; they’re likely going to fight tooth and nail to maintain markets...
05-23-2020, 12:47 PM
#5
Gets Weekends Off
Joined APC: May 2012
Posts: 123
There’s some really interesting info in there. This one really caught my eye:
“If you’re running an airline today you want to have cash against your objective of when you will be able to have load factors of 50% to 60%, which should provide you with breakeven cash flow, and that needs to be the first objective”
Does that mean F9 only needs to hit a 50-60% load factor to break even? That would be a very positive piece of news.
“If you’re running an airline today you want to have cash against your objective of when you will be able to have load factors of 50% to 60%, which should provide you with breakeven cash flow, and that needs to be the first objective”
Does that mean F9 only needs to hit a 50-60% load factor to break even? That would be a very positive piece of news.
05-23-2020, 04:42 PM
#6
Gets Weekends Off
Joined APC: May 2012
Position: Happy
Posts: 683
Did we not see our bookings doubled for July and planes being pulled out of the desert in June?
“As the COVID-19 crisis appeared more quickly than anyone anticipated, the airlines in Indigo’s portfolio – the ULCCS Frontier, Volaris, JetSMART and Wizz Air – immediately focused on cash burn, said Mr Franke.
Those airlines had significant unrestricted cash on hand, which is part of Indigo Partners' strategy, “...but you have to measure the burn of that cash against a timeline, and in our case, we made the assumption just out of lack of knowledge that 85% of an airline might be on the ground for up to a year, and on that basis, we tried to calculate cash burn against cash availability and position the airlines for survival”, he said.
The good news, Mr Franke stated, is that is “what happened in the portfolio”.
“As the COVID-19 crisis appeared more quickly than anyone anticipated, the airlines in Indigo’s portfolio – the ULCCS Frontier, Volaris, JetSMART and Wizz Air – immediately focused on cash burn, said Mr Franke.
Those airlines had significant unrestricted cash on hand, which is part of Indigo Partners' strategy, “...but you have to measure the burn of that cash against a timeline, and in our case, we made the assumption just out of lack of knowledge that 85% of an airline might be on the ground for up to a year, and on that basis, we tried to calculate cash burn against cash availability and position the airlines for survival”, he said.
The good news, Mr Franke stated, is that is “what happened in the portfolio”.
05-24-2020, 05:42 AM
#8
Gets Weekends Off
Joined APC: Dec 2019
Posts: 472
CAPA - Centre for Aviation, in a report entitled: 'COVID 19: Frontier Airlines has a more bullish view than most', stated (13-May-2020) Frontier Airlines is employing a brighter outlook post COVID-19 pandemic than most other airlines, with CEO Barry Biffle saying: "It won't be long before airplanes are full again". He stated: "Our plan is to have our entire fleet back in the air in July and all of our destinations should be served". Frontier is a largely US domestic operator, with domestic demand anticipated to return before international, and it is also smaller than most of its competitors so may not need to reduce operations as much. However, Frontier may be expected to meet with competition in a post COVID-19 pandemic as all airlines will work to offer lower fares, in order to entice travel demand"
Really?! That's a bold prediction.
Really?! That's a bold prediction.
05-24-2020, 06:22 AM
#9
Gets Weekends Off
Joined APC: Jul 2018
Posts: 380
Originally Posted by Tom Bradys Cat
CAPA - Centre for Aviation, in a report entitled: 'COVID 19: Frontier Airlines has a more bullish view than most', stated (13-May-2020) Frontier Airlines is employing a brighter outlook post COVID-19 pandemic than most other airlines, with CEO Barry Biffle saying: "It won't be long before airplanes are full again". He stated: "Our plan is to have our entire fleet back in the air in July and all of our destinations should be served". Frontier is a largely US domestic operator, with domestic demand anticipated to return before international, and it is also smaller than most of its competitors so may not need to reduce operations as much. However, Frontier may be expected to meet with competition in a post COVID-19 pandemic as all airlines will work to offer lower fares, in order to entice travel demand"
Really?! That's a bold prediction.
Really?! That's a bold prediction.
05-24-2020, 06:28 AM
#10
Gets Weekends Off
Joined APC: Mar 2015
Posts: 514
Originally Posted by Tom Bradys Cat
CAPA - Centre for Aviation, in a report entitled: 'COVID 19: Frontier Airlines has a more bullish view than most', stated (13-May-2020) Frontier Airlines is employing a brighter outlook post COVID-19 pandemic than most other airlines, with CEO Barry Biffle saying: "It won't be long before airplanes are full again". He stated: "Our plan is to have our entire fleet back in the air in July and all of our destinations should be served". Frontier is a largely US domestic operator, with domestic demand anticipated to return before international, and it is also smaller than most of its competitors so may not need to reduce operations as much. However, Frontier may be expected to meet with competition in a post COVID-19 pandemic as all airlines will work to offer lower fares, in order to entice travel demand"
Really?! That's a bold prediction.
Really?! That's a bold prediction.
He said we have a couple days this week with 20k passengers. In 2018 we flew 19.4 million, couldn't find 2019 numbers easily, so add 15% gives us an average of 61k/day. I realize the holiday weekend and all, but maybe we are a little further along than we think. And they have information on future bookings.
Thread
Thread Starter
Forum
Replies
Last Post
