flensr

I did, a couple pages back. Maybe it was TLDR but if you want a real answer you need to read it.

singlepilot

You don't think the Legacies costs won't increase over the years?
The big 3 are in negotiations now I don't think their pilots are going to accept pay cuts. The ULCCs only need to be proportionately cheaper.
Im pretty sure managers were saying the same thing about Southwest 35 years ago. The ULCCs are just taking Southwest's model to the next level of cheap...beyond the trailer park cheap.

Silver02ex

I think you have it backwards. ULCC don’t have to match the legacies or they are trying to. The legacies are trying to match the ULCC by offering basic economy and charging for the “extra” assigned seats, bags and so on.

bluesky24

4 airlines control 80% of the seats in the US domestic market. The legacies control the market. They don’t need to match the ULCC’s. The Legacies are into branding and marketing their different products. Not trying to match ULCC’s prices.

Silver02ex

They don't need to match ULCC's prices but they do.

"If we don't match the lowest fare in a marketplace, we found that we'll lose around 20% of our customers over time," American Airlines CEO Doug Parker said at the Airlines for America summit on Wednesday.

"It's not for everybody," United Airlines CEO Oscar Munoz told Business Insider of basic economy in an interview last year, adding, "It's the economics of matching and competing in markets where the low-cost carriers are offering this type of basic-economy service."

"For America's three legacy airlines, the premise of basic economy is simple: offer a slightly de-contented product at a price point on par with ultra-low-cost carriers like Spirit or Frontier. It's a product designed to not only keep those carriers from infringing on their turf, but do the job without sacrificing the profitability of their traditional economy-class offering."

https://www.businessinsider.com/why-...-so-bad-2018-9

Big E 757

I don’t know how to insert comments within quotes, but I’ll add my two cents.

First, I do think the ULCC’s have plenty of room in the US to survive and thrive. They’ll have to continue to be creative with routes to deploy all those 500 aircraft orders though. I think if the ULCC’s really start throwing routes up overlapping the Legacies, there will be push back. Who wins, I don’t know. The legacies have deeper pockets, but anti-competitive laws level the playing field for the ULCC’s.

As far as your comment about making 15% less than your peers at United, you used to make 45-50% less, so you’re moving in the right direction, and if you consider the quicker upgrade and time value of money, which offsets some of the lost income from widebody opportunities, it’s a much better gig at Frontier, Spirit, or Allegiant, than it used to be. It’s a much closer call that it has ever been. (Except when Spirit was paying more than the Legacies for a while back in 08-10? Maybe?)

I think we will all be fine. Will Spirit and Frontier do well during a recession? Yes, that’s the sweet spot for the ULCC’s. When consumers are more price conscious, you’ll have more legacy customers buying tickets on the ULCC’s.

Can you break into the Transatlantic market? I’m sure eventually, but the Legacies aren’t just going to roll over and give you an opportunity on a platter. JBLU was talking about it and everyone assumed they’d be flying JFK LHR. Those slots are impossible to get so Delta and Virgin tried to box them out of the UK by adding service from Bos and JFK to Gatwick and Manchester. Our masters aren’t going to give anything to your masters, but if the ULCCs found some lucrative tertiary markets that the Legacies didn’t see much value in, then you’d be on your way. Something like BWI-SNN, or MCO-Valencia Spain. I don’t know. If you have an east coast hub with feed, pick a medium sized European city with an LCC of their own or a good train network and you might be able to pull off seasonal service. But going head to head with the Legacies on THE most lucrative international market is going to be met with stiff competition.

I hope my comments didn’t sound biased or condescending. I think we can all thrive, but it won’t all be easy and smooth sailing. I feel like the “leaders” at Spirit and Frontier try to rally and motivate the troops by saying “We are taking the fight to the enemy! We are going to kick their asses at their own game, in their own hubs! But the smarter play is to continue where you’ve been the most successful, which is growing where we ain’t.

A friend of mine got hired at AirTran after we ended up furloughed in 2002...he said the talk about how AirTran was really putting the screws to Delta every hour of every day by every guest speaker that welcomed the new hires was tough to listen to. But the other new hires got fired up over it. Everyone wants to believe they work for a first class outfit that’s doing new things or has original ideas. The truth is, we are all just cogs in our separate wheels trying to earn a living.

I jus finished a 5 day trip with 28 hours flying, with 7:50 block today and a 4:00 am CST wake up. Sorry if I didn’t make much sense. It made perfect sense to me while I was typing it. I’m going to bed. Peace

Silver02ex

I got the opposite vibe from the higher ups at Spirit. Most of the time when we announce a new route or cities, there’s never any mention who we are competing against. It’s mostly “This is what we are doing, and that’s it” It’s how it was made out to be on one of the investor calls.

“We don’t really care what they are doing,” Spirit CEO Robert Fornaro said Oct. 25 on an earnings conference call. “It’s just the marketplace adjusting and adapting. The key thing is, ultimately, how many seats do you sell at a certain price?”

https://skift.com/2018/10/29/why-low...economy-fares/

Trowserchilli

Because the ULCCs don’t compete with the legacies. The legacies still don’t realize it. ULCCs competition is Amtrak, Greyhound and the family automobile. (And of course other ULCCs)

How will they do during a recession? Just fine. Just like Spirit did during the last one. They grew unabated and negotiated a new contract during the last recession.

Oversea routes have yet to be proven. However, Frontier is coming at it with an advantage to everyone. They already have sister companies overseas with established routes. Not hard now for Franke to connect the dots on his global network. Ie...WhizzAir, Volaris, JetSmart(although a start up).
PHL to some place in Europe on the 321xlr and you have quite a network to connect to through WhizzAir.

Name User

Interesting quote from that article:

SAVE was in the 60's back in Feb 2019. It would have to climb over 50% from where it closed on Friday to close above its 52 week high price.

It would have to more than double to hit its all time high of $80+ set five years ago.

That being said I like the company and the stock from an investor standpoint.

Cujo665

And 10 years ago they controlled 97%....
Meanwhile both Spirit and Frontier are adding hundreds of new planes for growth. Those 4 will be at 50% soon if they don’t smarten up.