I'm gonna buy a mess of 2021 SAVE leap calls and hope we survive, else i'll just go tits up with the mother ship.

 

Fortune favors the bold. Fear is the enemy. Safe spaces are available for the frightened. I don't work for yellow, but, as an ever increasing part owner, I am counting on you.

 

Cheaper oils benefits everybody, specially ULCCs. The cheaper the fuel, the wider the total cost advantage gap between us and the legacies. The more expensive the gas, less control we have over the total operating cost given the larger gas % share.
If traffic demands recovers quickly enough, we might be able to take huge advantages of this oil price war. Heck, we might even start hedging, I know I would.
Having said all that, there’s always going to be demand for ULCCs (taking covid19 and such extremes apart). In strong economies we stimulate first time flyers “creating” market traffic. In recessions, leisure premium travelers “step down” to fly cheaper. And lastly, don’t forget about independent business travelers that today might represent a very small % but will slowly grow as we add frequencies.

 

Cheap oil does benefit everyone. And that’s the point. An environment where everyone can take advantage of the tailwind is not what the ULCC model was built for. That “fit fleet” of young, fuel efficient planes is meant to take advantage of the competition having to pay more for their oil and their older aircraft.

Fuel is the number one expense for any airline. The legacies can play their games to suppress the ULCC niche and it’s growth when that cost is low. Those opportunities are much more limited when oil is selling for a more traditional price point.

This isn’t rocket science. The cost structure and higher personnel and support costs of the legacies make competition with a ULCC nearly untenable when oil costs more.

 

our fleet really isn’t that fuel efficient compared to any legacy right now. A CEO 320 built in 2016 burns the same as a CEO 320 built in 1995. We only have like what 25-30 NEO’s right now.

 

Only with cursory analysis. There’s a reason there’s a perf number attached to airframes, and that is is usually larger as they get older. A 21 year old airliner is not as efficient as a 2 year old one once you factor in the “life experience” it’s been through on the line.

Also, we’re not hauling cargo for a third party, and our seat density is higher. That means we’re not flying them as heavy and we’re moving more butts per unit of fuel burn than say AA.

Additionally, we’re accomplishing the same mission with smaller planes. A legacy would need a 767 or larger to move the same number of people as we do on a 321. Or a 757 to the same number as one of our 320s. Those fuel burns aren’t even close.

And, as you’ve correctly noted, that gap widens as we essentially go all NEO from this point forward.

Low fuel costs are a boon for us now as load factors will drop off with the current market scare. But we fare better in a more traditional demand environment with a normalized oil price.

 

Investors don’t share the same sentiment. We are down almost 21% pre-market

 

the entire world is down in pre-market

 

It’s really irrelevant what our stock price is at this point... until the hysteria calms down, all the stocks are misrepresented


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I kind of agree with this. Paranoia and fear is filling the markets. Nothing to do with "company ABC is bad" etc. Amazon is down 8%. Everyone self-quarantined will be using Amazon. Down 8%