JB is in same boat. Non profitable.

 

And Allegiant is supposedly hurting financially. Think they are putting too much weight on the success of this already implored method. Americans are mad cheap and want things like customer service and transparency.

 

ULCC is not infinitely scalable. IMO saturation has found ulccs needing middle income earners to fill seats, but middle income earners have more income flexibility to choose. We're past the "just give me a seat and get me there" customer, and consistently screwing up over and over again adds up. Mgmt lied over and over and over about fixing MCO. They blew it on MIA. They never rebuilt bread and butter BWI MYR and ACY, and partially walked away from large money markets like ORD to invest in the one state that tourists are tapped out on, given the declining tourism numbers in the sunshine state. Maybe Spirit shouldnt have been so quick to blow off investors in years' past when they would ask about things like Hawaii and Europe growth.

 

See post #113

You’re not taking into account the human element. The ULCC model works but only at a certain size in this country. Frontier came in and instantly changed models adding a bunch of ULCC seat miles to the market. Then they grew. All the time we were growing and adding ULCC seats to the market. When we were printing money we were half the size and Frontier was not a ULCC. The market for the garbage we sell is maxed out.

 

Apples and oranges. Different challenges.

 

Truth

filler

 

Show me on the Spirit balance sheet where the losses are due to management decisions and not the ULCC business model...

 

To be honest both are the problem and why we have such massive losses. When a management doesn’t recognize a business model is flawed at scale they make bad decisions and throw good money after bad.

 

Stock price took a beating today when the market was up. If we lose the trial how low does it go?

 

Well, looking at the 10Q I could be wrong but.... it looks like the "operation only lost" $63,000,000 in the first 9 months of the year. They took a write off to purchase $150,000,00.00 of ground equipment, and wrote off $100,000,000 in deferred heavy mx (whatever that means). Total wages & Salaries went up by 30% but ASMs only went up by 15%. They Sold 100M worth of owned AC but spent $600M more on A/C rent. Seems like not being able to Staff, (too little, too late contract cycle wise) not expanding training dept quickly enough, displacing people to staff new bases (causing more attrition) which prevented us from flying the A/C we already had and now we have this Pratt Issue that is further going to hurt. It seems like the ULCC Model is losing some money, but the real issue is mishandling of crew & Aircraft capacity?.... I dunno, could be way off but seems like maybe it's more of a management related issue than Business model?