[Breeze] Airways
#741
Moderator
Joined APC: Sep 2017
Position: MEC Chairman, Snack Basket Committee
Posts: 3,199
So those people are all going to fly on Breeze? They need more than that specific genres to be popular. I’m not saying Breeze doesn’t have the economic odds to give them the low overhead to ramp up, but we’re seeing 1970’s level traffic right now and all the airlines are fighting for pax with record low fares. This is not 2001, or 2008. It’s much worse and much different. Personally I don’t think Neelman (Breeze) will be AS successful as other times.
I believe customers will be more willing to try a new brand that promises to be nice to them, yes. It's all recovery dependent, of course. But smaller and more nimble is a huge competive advantage for next year if the recovery happens fast. Breeze will launch right before a hopefully decent summer. The legacies have all made their educated guesses for next summer, if they're right, they'll be adequately staffed, if they go into an understaffed situation with furloughed pilots, they will be forced to give up market share and that's where breeze will have an open hunting season. Remember breeze was modeled to be the "forgotten" airport airline, so now they have that plus big airport opportunities.. I think the odds are very favorable to them to be a big success.
#742
#743
I believe their highest ever profit was in 2019, which was right around $3billion. So how long is it going to take them to pay off $40 billion in debt? At this level of interest?
Trust me, I bear no ill will whatsoever toward AA or any of it’s people, but I simply don’t see how they get out of a hole that deep.
Trust me, I bear no ill will whatsoever toward AA or any of it’s people, but I simply don’t see how they get out of a hole that deep.
In the end however, all debts must be paid.
#744
Gets Weekends Off
Joined APC: Dec 2017
Posts: 381
I believe customers will be more willing to try a new brand that promises to be nice to them, yes. It's all recovery dependent, of course. But smaller and more nimble is a huge competive advantage for next year if the recovery happens fast. Breeze will launch right before a hopefully decent summer. The legacies have all made their educated guesses for next summer, if they're right, they'll be adequately staffed, if they go into an understaffed situation with furloughed pilots, they will be forced to give up market share and that's where breeze will have an open hunting season. Remember breeze was modeled to be the "forgotten" airport airline, so now they have that plus big airport opportunities.. I think the odds are very favorable to them to be a big success.
#745
Gets Weekends Off
Joined APC: Jul 2019
Posts: 484
The opportunity for breeze to blow up is huge. They have dirt cheap planes, sim time, pilots (unfortunately), and a very leveled competition. They can make money very easily on partially filled planes. They will start small and extremely nimble and have the chance to grow with the recovery.
oh yeah, also, right now mom's and toddlers are getting booted off planes across the board, no fly lists have increased due to the mask fighting, and people are generally annoyed with the airlines and their constant virtue signaling.
People will be ready to try something new: an airline marked by easy to use technology, no middle seats, and super friendly crews who know they won't get a second chance to make a first impression. It's gonna be a very successful start up. This is the older more experienced Neeleman, but still trying to "bring humanity back to air travel" in a way - and once again, his timing is impeccable.
oh yeah, also, right now mom's and toddlers are getting booted off planes across the board, no fly lists have increased due to the mask fighting, and people are generally annoyed with the airlines and their constant virtue signaling.
People will be ready to try something new: an airline marked by easy to use technology, no middle seats, and super friendly crews who know they won't get a second chance to make a first impression. It's gonna be a very successful start up. This is the older more experienced Neeleman, but still trying to "bring humanity back to air travel" in a way - and once again, his timing is impeccable.
Not a big success at first? Then they can taper/tailor their growth.
The big issue is where they're going, and with what frequency. If they don't have gates, slots, and destinations people are willing to travel to then their model is going to struggle. Doesn't matter what mommy and toddler are thinking. Neelman says he sees all these untapped markets. But that's yet to be seen.
Don't forget they're also a startup airline. Think about EVERY complaint you've had about your regional/legacy/LCC/etc. and why they suck. (How inefficient schedules are, the operation sucks, ground crews, IT outdated, sim training/time, pay, snack baskets, whatever....) Magnify all those things by x100. That's what a startup will look like.
#746
Moderator
Joined APC: Sep 2017
Position: MEC Chairman, Snack Basket Committee
Posts: 3,199
They're not competing with legacies. Their entire business plan is more along the lines of the ULCCs and the secondary airports a la Allegiant. Who, along with SWA, are more than ready to be nimble. I'm quite sure their "hunting season" isn't going to be nearly as open as you think (or hope).
#747
I agree with all you said except for this. Except if they go into Chapter 11. In addition to renegotiating debt structure, some will be willing to negotiate something less, rather than getting say pennies on the dollar in Chapter 7 liquidation.
#748
Debt matters not; so long as revenue exceeds the servicing of the debt..... Still, even then, creditors will often revise and restructure the debt rather than face getting pennies on the dollar in bankruptcy. I'd expect them to use the COVID crisis as cover to renegotiate first; then a bankruptcy if that fails. Their BOD will be satisfied that it wasn't their fault, it was COVID's, and they made every reasonable effort to save the company prior to Ch.11
In the end however, all debts must be paid.
In the end however, all debts must be paid.
Well, when you are borrowing money at 12% for 5 years (at the same time I’m refinancing my mortgage to a 15 year at 2.4%) it says something about what the market thinks your chance of doing that is. Granted, most of the earlier debt is around 8%, but even so...$40 billion at 8% is still $3.2Billion a year in debt service and currently they are Not making ANY profit just going deeper in debt.
#750
Gets Weekends Off
Joined APC: Jan 2008
Posts: 533
Debt matters not; so long as revenue exceeds the servicing of the debt..... Still, even then, creditors will often revise and restructure the debt rather than face getting pennies on the dollar in bankruptcy. I'd expect them to use the COVID crisis as cover to renegotiate first; then a bankruptcy if that fails. Their BOD will be satisfied that it wasn't their fault, it was COVID's, and they made every reasonable effort to save the company prior to Ch.11
In the end however, all debts must be paid.
In the end however, all debts must be paid.
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