NK and F9 are unprofitable
 

SOURCE:

https://www.reuters.com/business/aer...it-2023-09-21/



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"Biffle last week said Frontier is facing pressure to offer "very, very low" fares to fill up its planes. Spirit has cut its profit outlook for the current quarter, citing "heightened promotional activity with steep discounting."Frontier's shares are down by half this year. Spirit shares are down 18%. In contrast, shares of United and Delta are up 20%, and American's shares have gained 5%.

The divergence in performance has sparked questions about the business model of low cost, low fares.

United Airlines CEO Scott Kirby has called the model "doomed" as he doesn't expect the constraints would go away anytime soon. Some analysts are also calling for a review.

"I don't know that the model is completely broken, but I certainly think that it needs to be rethought," said Helane Becker, airline analyst at TD Cowen."

100% agree. The ULCC model is maxed out in the USA. Only so many Americans will tolerate it and we have reached that number. This isn’t Asia, India, Europe, or South America.

A Spirit/Frontier combo trying to grow would be doomed to fail. Indigo would transfer the order book to their holding in the rest of the world and burn it to the ground.

Jetblue is the only option at this point or watch the flood gates open as rats flee the ship

Shouldn’t be a shock to anyone. More ammo for court in a few weeks. Super Low fares are great, but not sustainable.

This trend just helps NK with the merger.

Incredibly convenient timing

I am a bit confused, thread title says both the airlines are unprofitable yet both airlines appear to be profitable and Frontier has a better than 9% margin which is a good number for an airline historically.

Gross vs Net.

I hope they don’t Drop profits to Zero. Maybe they can pick up profits out of base?

Both are still profitable using either.

Spirit hasn’t been profitable since covid. They’ve had 1-2 quarters where they had a net profit, but they’re in the red overall.

another "takeaway" is the worsening of ULCC performance, and the improvement of legacy, post-COVID.