Flew up from FLL two nights ago, that line of weather was some bullish-t.......

 

Nice! $SAVE jumps over 6% in early morning trading off of low oil price news.

Man, I wish I'd purchased more!

 

I'm surprised no one has mentioned it. What's the deal with the paperwork? Is there a fix coming?

 

It's mentioned ON the paperwork...

It's a formatting issue (NK claims it's on the vendor); says fixed soon. Read much?

 

low oil price means more competition & growth resulting in cheaper ticket prices...

 

No, I don't think so. Low oil prices won't result in lower ticket prices, what we'll see are more capital improvements and dividends to shareholders. With the recent good run the airlines are having, airline stocks are no longer avoided by traders, and to keep that interest, profits will be routed through to shareholders via dividends and buy backs, not to the traveling public via lower prices.

What we'll also see IMHO, are continued improvements to airline infrastructures (ops centers, terminals, computer systems, training centers, etc.) and an attempt at lowering the airline's fleet age.

I do agree we'll get more growth, but no more competition and no cheaper ticket prices due to low oil prices.

 

I dunno, usually cheap gas leads to overcapacity which always precludes the industry's death spiral. I hope I'm wrong but capacity discipline has been mentioned a number of times as a main reason for large profits. I'm sure (I hope) Im wrong but we'll see

 

No, you're exactly right, capacity discipline is what's driving a good portion of the profits we're seeing in the airline industry. Operating costs are lower, ticket prices are increased and airlines make money. I don't think with cheaper gas this time you'll see an increase in capacity. Delta for example has some of the oldest planes in the industry, I think you'll see them gradually lower the average age of their fleet, that's the type of improvements I'm talking about. The days of 12 flights a day from ATL to LIT with an MD-80 are over.
But, cheaper gas is not going to lead to lower ticket prices, if anything ticket prices will slightly increase as a whole. There will be gimmicks like Delta's ultra value tickets, but not wholesale lowering of ticket prices. Competition has pretty much been stabilized amongst the big carriers with only SEA in contention, and that's not even a battle between large legacy carriers.

 

Seeking Alpha article on SAVE.

Spirit Airlines Still Has Plenty Of Room To Grow - Spirit Airlines (NASDAQ:SAVE) | Seeking Alpha

 

Seeking Alpha is a little bit late to the party, but the article is correct. $SAVE does have room to grow, but the growth Spirit is going to experience is different from the growth expected of American, Delta and United (although no one in their right mind would be holding UAL stock), the legacies growth will be in revenue and profit, not in capacity. Big difference between the two.