Agreed. BOS was already the #1 destination out of RDU before AA added the 5x daily flights. Now they’ve really flooded the market with capacity - 18-20 flights/day in the summer and well over 1000 seats/day.


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Technically it seems ULCCs also provide a better overall product to its customers, vs American.

oh....and aren’t debt laden

If you were a Delta pilot, you could brag all you want and about how bad other airlines are; but you’re not. Glass houses and you have handfuls off stones.

 

That MainlineAF guy is either a first-class mustache or a great troll. Always get a chuckle either way.

 

But they currently have newer fleets requiring less maintenance and delivering better fuel economy to go along with those below market personnel costs, and even when they get market rates the younger pilot group will still - for at least another decade - be cheaper.

I didn’t claim they were revolutionary, I claimed it gave them an economic advantage, and it does.

Whether they are disruptive or not depends on whether their model attracts new business or steals market share from the Big Three. But they do seem to run leaner operations that might be expected to do better in a downturn.

Only time well tell.

 

Perhaps...

but not everyone buys that:

Forbes on profits & ULCCs

 

haha. True true. I’m guessing the former.

 

Interesting article, thanks for sharing. The writer makes some good points, but tends to paint the Legacies with more of a broad stroke than he/she does with the ULCCs.
One point the author doesn’t address for the ULCCs is ‘cost creep’. Growing at 16-19% allows costs to be easily managed and spread out. If we were to experience a significant downturn and the airline stopped growing, costs would likely spike and deteriorate the major advantage ULCCs have.

 

Do you have a source backing this claim? I am generally interested to see the data on this.

 

I guess you will have to provide a reference to explain better about the “cost creep.” It would seem to me intuitively that the companies with the lowest fixed and marginal costs would be best able to weather a downturn. Just as it would seem that parking the older airline owned jet models would only save money if you either parked those planes for good or furloughed the pilots. Otherwise you would be just incurring additional training costs or paying pilots to sit

no, I’d buy quasi-intuitively that the people flying ULCC MIGHT have a far more elastic demand for flying than business flyers, but most of the fixed overhead costs of legacies (especially AA with its $23 Billion debt burden) and higher marginal costs make me suspect they would actually do less well in a recession than the ULCCs.

Of course if the wage differential gets too high I think the ULCCs training costs will go way up as they become just a place for newbies to go to get a type rating and enough experience to move on, much as is happening at Atlas in the ATI business.

 

I would like to add the observation that Eastern, Pan Am, and TWA no longer exist. All were rightfully well known brands back in their day. Also, when SWA got started, they served peanuts and nothing else, and were light on luxuries. No first class, no lounges, etc.

They were arguably the first LCC before "LCC" was a term.