I'm not sure how much you follow our metrics or our management, so I'll keep it brief. Managements laser-like focus on costs is not for growing the airline, it's to keep our planes full which increases our profit (remember, over 40% of our revenue comes from non-ticket related items). The more full the plane, the higher our non-ticket revenue is (increases profit). Keeping costs down should be the goal of all airline managements, so I don't know why you're singling out NKS...

The markets we serve, and are growing into, stimulate their own demand. In each city pair we add service, passenger traffic grows nearly equally to the amount of service we add. We're not robbing passengers from AA or Delta (in fact, the opposite is what's happening). The difference is we can do it more profitably than they can (look at profit margins) now, and when oil returns to a higher level, they'll be doing it at a loss. People have the misconception that we steal everyone else's passengers, and the numbers point out that it's just patently false. Our passengers tend to think of flying for a vacation as purchase right up there with buying an appliance (they're big ticket purchases that they are using their discretionary income for). It's not that they will fly, they'll either not go, or if they do go, it'll likely be the cheapest option...

Hope this helped explain a few things. So much for brief!!

 

Hmmmm....most of your guys' postings on here are addressing shortcomings in some aspect of either spirit's, or other's behaviors and/or beliefs. If one read my post accurately, then please explain how my observation is any different than yours. What substance do you bring that is lacking in the post to which you are referring?

 

Yes sir! Thanks!

 

I think you're right on the merger front, but the only mergers that make sense to me right now would be JetBlue and Alaska. I don't see Allegiant being an attractive merger, even as profitable as it is, it doesn't really fit in with anyone. Virgin is attractive, but it would be at a premium, the quality of the product is probably better than JetBlue, but not enough to warrant a purchase. Hawaiian and Alaska make some sort of sense, but I think Hawaiian will do what it can to stay independent. It would take an awfully big payment to purchase Frontier right now, a huge premium over what they're worth, I just don't see anyone paying that premium. That leaves Spirit, which I'm starting to believe is becoming a little vulnerable. With the amount of firm orders and cash on hand, it's a little the same with Frontier, the premium on the shares will probably be too high to stomach.

Don't try to compare the listed price on an individual share of stock though, it's really like comparing Apple(s) to oranges.

Oh, and I know you meant to say DOJ instead of DOT, but you're right, while I don't think any further mergers involving the Big 4 will be allowed, unless something drastic happens, I don't see the same sort of opposition to a merger involving smaller airlines, including the legacies of Alaska and Hawaiian.

Spot on!

 

I thought we were VFR (visiting family and relatives), and leisure next.

Well... I don't know what Spirit will do differently if anything. As I've said, it was a total speculation on my part. So far we have tried to stay clear of competition and the motto was: "Put the plane where it makes the most money." If that still means one more route out of ORD, than we might very well continue with the existing hubs.

 

Any word on the special NC meeting? Wasn't that yesterday?

 

Perhaps so. But it is hardly a strategy to chase Spirit out of DFW and then do nothing. Low oil is not here to stay and AA knows it. Saudi's budget deficit for 2015 is predicted to be $107 billions by the IMF. This article shows each country's break even price to balance their budget. For Saudi it is around $105/barrel.

Break-even oil prices for all the major producers in the world - Business Insider

At this rate Saudi is predicted to run out of money in 5 years. I doubt they will go all the way. Not to mention Saudi is not the only one with a deficit. Other countries running out will destabilize the region even more. It is already happening. They can close the pipe tomorrow. It is up to them.

AA would be stupid to just make a short term move. Oil will rise once again and we will be back asking for more gates. Killing or cannibalizing Spirit and Frontier both is certainly possible. But it is not a solution. Another Spirit will pop up the moment oil is back up. The long term solution is to create a sub-brand or shift the brand and enter that market.

 

Not every airline has to serve every customer. Costco isn't trying to win Walmart customers by and large. In fact Costco patrons pay a small fee not to shop with Walmart customers. But there are always a few crossovers.
Delta announced a year ago that they were going to offer the last few seats on every flt as a "unbundled fare" competitor. They don't get assigned seats and pay for all bags etc but they got the flt for minimal fare.
I didn't get from Aa that they planned on matching nk on all markets but to just ensure that the unbundled crowd has an option on markets that they already compete in.

 

The demise of AA? Who is talking about that in this thread?

I did not listen to their call. I don't know why they are doing what they are doing. The point is something is different from the past years and if one works for NK this might be significant. Hence all this discussion. Well... hardly a discussion. It is me running my mouth with a few other guys the rest just wants to talk about the MEC and the TA and how they will both suck.

 

I dunno, I keep hearing "rumors" of some pretty good things . I also hear a TA is rigghhhttttttttttttt around the corner.