Hunter Keay
10-25-2020 | 07:23 AM
#21
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Joined: Feb 2012
Posts: 3,599
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From: 787
I don't think Hunter is right this time. One of the lessons learned through the last round of bankruptcies is that the those who can stay out of bankruptcy are also huge beneficiaries in other ways. Southwest and Jetblue were able to grow leaps and bounds almost unimpeded for about five years. Then it became tough again as the new lean and mean legacies went on the hunt but that five years was huge for them.
So if AAL goes chapter 11, Do Delta and United want to shrink also in bankruptcy, albeit short term, or do they want to take advantage of AAL's weakness while they reorganize?
So if AAL goes chapter 11, Do Delta and United want to shrink also in bankruptcy, albeit short term, or do they want to take advantage of AAL's weakness while they reorganize?
Hunter didn’t say if one goes we all go but he did say one bad player can bring down the entire industry. How far down will an airline that keeps prices low and floods the market bring everyone else? That length of time and the damage inflicted may leave the others without a choice.
10-25-2020 | 07:29 AM
#22
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Joined: Mar 2006
Posts: 1,112
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From: SFO Guppy CA
I don't think Hunter is right this time. One of the lessons learned through the last round of bankruptcies is that the those who can stay out of bankruptcy are also huge beneficiaries in other ways. Southwest and Jetblue were able to grow leaps and bounds almost unimpeded for about five years. Then it became tough again as the new lean and mean legacies went on the hunt but that five years was huge for them.
So if AAL goes chapter 11, Do Delta and United want to shrink also in bankruptcy, albeit short term, or do they want to take advantage of AAL's weakness while they reorganize?
So if AAL goes chapter 11, Do Delta and United want to shrink also in bankruptcy, albeit short term, or do they want to take advantage of AAL's weakness while they reorganize?
10-25-2020 | 07:44 AM
#23
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Joined: Aug 2020
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that is a good point. The first one into Bankruptcy could just chum the waters. Everyone else could just go into a frenzy scooping up all of their slots, planes and market share, basically making it impossible to survive.
Hunter didn’t say if one goes we all go but he did say one bad player can bring down the entire industry. How far down will an airline that keeps prices low and floods the market bring everyone else? That length of time and the damage inflicted may leave the others without a choice.
Hunter didn’t say if one goes we all go but he did say one bad player can bring down the entire industry. How far down will an airline that keeps prices low and floods the market bring everyone else? That length of time and the damage inflicted may leave the others without a choice.
Last edited by Hedley; 10-25-2020 at 07:54 AM.
10-25-2020 | 08:09 AM
#24
Line Holder
Joined: May 2009
Posts: 516
Likes: 6
From: 756
that is a good point. The first one into Bankruptcy could just chum the waters. Everyone else could just go into a frenzy scooping up all of their slots, planes and market share, basically making it impossible to survive.
Hunter didn’t say if one goes we all go but he did say one bad player can bring down the entire industry. How far down will an airline that keeps prices low and floods the market bring everyone else? That length of time and the damage inflicted may leave the others without a choice.
Hunter didn’t say if one goes we all go but he did say one bad player can bring down the entire industry. How far down will an airline that keeps prices low and floods the market bring everyone else? That length of time and the damage inflicted may leave the others without a choice.
I still thought it was a good presentation, and helpful to hear the other side.
10-25-2020 | 08:18 AM
#25
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Joined: Sep 2015
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From: UNA
Normally BK is used to address a cost issue, not a revenue issue - I still wonder what levers would be used to further reduce cash burn without shrinking into oblivion. Also Wall Street has been obsessed the past few years with capacity discipline - thinking it creates pricing power. Unfortunately in the leisure space, you still have to compete against your irrational competitors (NK/F9/Norwegian...). In that world, market share / size is key, because you can’t just charge more in economy because DL/AA are ‘full service.’ AA tried that when NK was aggressive in DFW, and AA was taken to the cleaners.
I still thought it was a good presentation, and helpful to hear the other side.
I still thought it was a good presentation, and helpful to hear the other side.
maybe if contracts are coming up with regional carriers they could not be renewed, but that’s about it that I can think of
10-25-2020 | 10:23 AM
#26
You scratched my anchor
Joined: Feb 2011
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10-25-2020 | 12:10 PM
#27
Widebody
Joined: Apr 2010
Posts: 777
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From: 777 CAP
Keay said that essentially airlines can’t afford to shrink because of the cash flow needed to service debt, but also that closing hubs is an option. Seems contradictory to me. He should also realize any reduction in a major city will just be filled by another airline.
He also thought it was crazy that no one has cancelled aircraft orders.
He also thought it was crazy that no one has cancelled aircraft orders.
10-25-2020 | 01:11 PM
#28
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Keay said that essentially airlines can’t afford to shrink because of the cash flow needed to service debt, but also that closing hubs is an option. Seems contradictory to me. He should also realize any reduction in a major city will just be filled by another airline.
He also thought it was crazy that no one has cancelled aircraft orders.
He also thought it was crazy that no one has cancelled aircraft orders.
10-25-2020 | 02:21 PM
#29
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Joined: Apr 2013
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Likes: 40
10-25-2020 | 03:28 PM
#30
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Joined: Mar 2006
Posts: 1,112
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From: SFO Guppy CA
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