we were offering half the capacity then and the legacies were capacity constrained. Now we doubled in size and the legacies have the capacity to battle us where necessary. Also frontier turned into a ULCC during this time which added a ton of the same product to the market. We have maxed out the number of people that want this product. We arent making money because not enough people are buying what we are selling and won’t in the future.

 

You can acknowledge anything you like. It doesn’t take a majority of mortgages to default in order to bankrupt a MBS, and there’s a lot more bad debt out there than people realize.

 

Teddy said even with record revenue , no profit. Its comical how everyone just keeps on hating on NK and crew. Little kids " my airline is better"... "No mine is".

 

No sure what you’re saying. I work here. This business model can’t be scaled in this country is what I’m saying. Not enough people like it.

 

I hear that we aren’t filling planes, but I’ve had 80+ on all my flight for the last 2ish weeks. Booked at nearly at or above capacity is normal for what I’ve been flying. Idk how we don’t make money.

I didn’t look into any of the reports, but my guess is the $250 mil training facility we’re building is eating up profits showing us at a lose. Maybe I’m wrong, but idk how we’re not turning a profit tbh

Scaling this model is a totally different story

 

I don’t thinks it’s just how full your flight are but also price point.

 

Different challenges, apples and oranges, agree to disagree.

 

The profit should still be there, the margins are just extremely slim compared to the legacies. We just require more pax to break even and turn a profit

 

It doesn't work that way, at all.

Once the airline sets it's flight schedule for the quarter, it's variable costs largely become fixed costs, which gets added to traditional fixed costs. The main costs that are still variable are unexpected mx events and IROPs.

That's one side of the equation. On the revenue side, ticket prices can vary wildly depending on demand. It's the main reason that some quarters are traditionally higher margin quarters than others. But even beyond seasonality of demand, demand itself isn't fixed. If demand for your product is lower than expected either due to reputational stress from past IROPs, or poor customer service, or stress on the socioeconomic class your airline caters to, or even just the general economic cycle of the nation, the airline has to discount tickets to fill the seats. The average fare one month could be $140, the average fare in another month could be $90, even for the same flight schedule. In those two examples the fixed and variable costs remain very similar, but the revenue (money from fares and ancillaries) are dramatically different. So even if the load factors were the same ("my flights were full"), the difference is profitable or not profitable.

Spirit and Frontier have both made public statements recently about "heavy promotional activity and discounts" to fill the seats. That is why full flights aren't guaranteed to be profitable.

https://www.marketwatch.com/story/spirit-airlines-cuts-3q-outlook-amid-heightened-promo-activity-123dd758

 

Reading this thread it's a bit scary to see how many pilots don't have the slightest understanding how their industry works. And they are happy to put that on full display here. Lots of amateur route planners too... lol! Best to stick to your wheelhouse in order to not be thought an idiot.

Full planes =/= making money is a good first lesson in airline economics.