Everyone passes the cost on to passengers.

The legacies, bolstered by payroll support and low oils prices have been able to tap into the ULCC domestic market to keep their metal and some cash flow moving. High fuel costs is not something most of them are in a position to ignore to quash low cost competition.

Ticket prices will go up for everyone, but the non ULCC competition will be less able to play in our park. Imoho anyway.

Also, a lot of analysts are saying business travel won't come back for a while, due to the viability of online meeting software. Most travel will be for leisure over the next few years, if not forever. This puts a big dent in Delta's business model.

Having literally billions of dollars in hardware optimized for flying that IATA says isn’t going to rebound for a few years is a huge overhead cost, as are multi-type fleets in general. And the A321 NEO, it doesn’t matter who is flying it - is going to severely impact the WB monopoly on some of the shorter international routes. And while the legacies can, have, and will use their wide bodies on heavily traveled longer hub to hub domestic routes the CASM will never really be competitive with aircraft optimized for those routes. And the higher percentage of more fuel efficient NEOs in the ULCC fleets of F9 and NK are going to mean they are less effected by higher fuel costs.

If the ULCCs can’t outhustle the legacies in this environment I’ll be greatly surprised.

RASM and CASM are out and ESG is in. Welcome to the great reset.

Fitch just looked at a lot of that debt today and was pretty happy with it and they are pretty conservative about airline debt right now:


https://i.ibb.co/2sT3wX4/5-E186-FE1-...0-FCC68-F5.jpg

Buying aircraft at rock-bottom prices is actually a pretty good deal if you can gainfully employ them, even if you take on debt to do it. Assuming it IS the bottom, and you CAN gainfully employ them. But if they are going to get the growth they anticipated in the last earnings call they will need additional aircraft purchases.

We will see what the earnings are soon for all airlines