Attrition
11-23-2022, 07:24 AM
#2671
The REAL Bluedriver
Joined APC: Sep 2011
Position: Airbus Capt
Posts: 6,920
My opinion is F9 will be fine, and do fine. I don't think it will ultimately be nearly as large as they/you think it will be. Spirit at one point was on a trajectory to be huge and be a nationwide ULCC. The model really didn't scale as planned, and they haven't been able to stay in near as many markets, long term, as they thought, outside of MCO, LAS, FLL and other Florida. And their costs would continue to rise with longevity (relatively) and there is more new ULCC companies starting service all the time. When your one competitive advantage is being cheap, and remaining the cheapest is impossible/unsustainable over time, you aren't likely to continue your success indefinitely.
It got to the point that F9 and NK were cannibalizing each other's demand on those few markets with tremendous ULCC demand, and figured out they needed to merge to consolidate that market, as opposed to continually fighting over MCO/LAS/Florida.
We'll see, but I don't think F9 will take nearly all those deliveries in it's current form, just as NK will never take all of it's previously planned deliveries in it's current form.
Bottom line, go ahead and buy that new car, you'll be fine. Maybe cancel the order for the G650 though.
It got to the point that F9 and NK were cannibalizing each other's demand on those few markets with tremendous ULCC demand, and figured out they needed to merge to consolidate that market, as opposed to continually fighting over MCO/LAS/Florida.
We'll see, but I don't think F9 will take nearly all those deliveries in it's current form, just as NK will never take all of it's previously planned deliveries in it's current form.
Bottom line, go ahead and buy that new car, you'll be fine. Maybe cancel the order for the G650 though.
11-23-2022, 07:40 AM
#2672
Almost there
Joined APC: Apr 2021
Posts: 1,285
My opinion is F9 will be fine, and do fine. I don't think it will ultimately be nearly as large as they/you think it will be. Spirit at one point was on a trajectory to be huge and be a nationwide ULCC. The model really didn't scale as planned, and they haven't been able to stay in near as many markets, long term, as they thought, outside of MCO, LAS, FLL and other Florida. And their costs would continue to rise with longevity (relatively) and there is more new ULCC companies starting service all the time. When your one competitive advantage is being cheap, and remaining the cheapest is impossible/unsustainable over time, you aren't likely to continue your success indefinitely.
It got to the point that F9 and NK were cannibalizing each other's demand on those few markets with tremendous ULCC demand, and figured out they needed to merge to consolidate that market, as opposed to continually fighting over MCO/LAS/Florida.
We'll see, but I don't think F9 will take nearly all those deliveries in it's current form, just as NK will never take all of it's previously planned deliveries in it's current form.
Bottom line, go ahead and buy that new car, you'll be fine. Maybe cancel the order for the G650 though.
It got to the point that F9 and NK were cannibalizing each other's demand on those few markets with tremendous ULCC demand, and figured out they needed to merge to consolidate that market, as opposed to continually fighting over MCO/LAS/Florida.
We'll see, but I don't think F9 will take nearly all those deliveries in it's current form, just as NK will never take all of it's previously planned deliveries in it's current form.
Bottom line, go ahead and buy that new car, you'll be fine. Maybe cancel the order for the G650 though.
11-23-2022, 07:41 AM
#2673
Gets Weekends Off
Joined APC: Mar 2017
Position: Student of the game
Posts: 1,026
11-23-2022, 07:46 AM
#2674
Gets Weekends Off
Joined APC: Dec 2019
Posts: 1,318
Well, let's see.
Nations largest ULCC last to profitability.
F9, can't afford jetways in it's home town, and was very late to return to profitability, and would it actually have been profitable if hadn't stolen $200+ million from it's customers?
The model in general seems to run out of steam after it saturates Mickey Mouse, Lost Wages and cheap Florida, both large US ULCCs seem to open and close bases as often as normal people change their underwear. The higher service, higher fare airlines returned to profitability much sooner (in general) and have reached higher levels of profitability than the ULCCs, and new ULCC competition is arriving rapidly...
And, the one main advantage a ULCC has is low cost and cheap tickets, but as they get older their workforce matures onto higher pay scales and new ULCC entrants on low longevity pay will take away their one competitive advantage...
There's more, but I've got other stuff to do. Good luck.
Nations largest ULCC last to profitability.
F9, can't afford jetways in it's home town, and was very late to return to profitability, and would it actually have been profitable if hadn't stolen $200+ million from it's customers?
The model in general seems to run out of steam after it saturates Mickey Mouse, Lost Wages and cheap Florida, both large US ULCCs seem to open and close bases as often as normal people change their underwear. The higher service, higher fare airlines returned to profitability much sooner (in general) and have reached higher levels of profitability than the ULCCs, and new ULCC competition is arriving rapidly...
And, the one main advantage a ULCC has is low cost and cheap tickets, but as they get older their workforce matures onto higher pay scales and new ULCC entrants on low longevity pay will take away their one competitive advantage...
There's more, but I've got other stuff to do. Good luck.
Another factor is that every legacy has now added something called basic economy to compete with ULCCs. A small portion of the cabin gets sold at an ULCC price but you get a free carry on, snack, drink, and more leg room for free. That’s got to be siphoning some target customers from ULCCs.
11-23-2022, 07:49 AM
#2675
Gets Weekends Off
Joined APC: Apr 2022
Posts: 162
11-23-2022, 08:01 AM
#2677
The REAL Bluedriver
Joined APC: Sep 2011
Position: Airbus Capt
Posts: 6,920
Aircraft start to age, maintenance cost goes up, including things like C checks and so on. Growth must outpace cost for a ULCC to maintain a cost advantage. It’s that simple. Although I don’t think I agree with him, Scott Kirby did just recently call the ULCC model a Ponzi scheme.
Another factor is that every legacy has now added something called basic economy to compete with ULCCs. A small portion of the cabin gets sold at an ULCC price but you get a free carry on, snack, drink, and more leg room for free. That’s got to be siphoning some target customers from ULCCs.
Another factor is that every legacy has now added something called basic economy to compete with ULCCs. A small portion of the cabin gets sold at an ULCC price but you get a free carry on, snack, drink, and more leg room for free. That’s got to be siphoning some target customers from ULCCs.
I do not believe the ULCC model has shown that it can do that, in the US, on any large scale. That's why you see such dramatic changes in schedule, opening and closing of bases, moving resources around etc ... MCO/LAS have shown near year around ULCC demand, and Florida to a large degree, but otherwise the model has not scaled as planned, and with more traditional airlines offering basic economy... it's really hard to scale beyond those markets I mentioned, and no ULCC has yet to get a commanding share, or be on a trajectory to get a commanding share in any large metro areas where most of the money/travelers are.
11-23-2022, 08:04 AM
#2678
Gets Weekends Off
Joined APC: Mar 2017
Position: Student of the game
Posts: 1,026
Our rescheduling pay formula and rules are worse than my former regional.
11-23-2022, 08:05 AM
#2679
Gets Weekends Off
Joined APC: Sep 2018
Posts: 128
My opinion is F9 will be fine, and do fine. I don't think it will ultimately be nearly as large as they/you think it will be. Spirit at one point was on a trajectory to be huge and be a nationwide ULCC. The model really didn't scale as planned, and they haven't been able to stay in near as many markets, long term, as they thought, outside of MCO, LAS, FLL and other Florida. And their costs would continue to rise with longevity (relatively) and there is more new ULCC companies starting service all the time. When your one competitive advantage is being cheap, and remaining the cheapest is impossible/unsustainable over time, you aren't likely to continue your success indefinitely.
It got to the point that F9 and NK were cannibalizing each other's demand on those few markets with tremendous ULCC demand, and figured out they needed to merge to consolidate that market, as opposed to continually fighting over MCO/LAS/Florida.
We'll see, but I don't think F9 will take nearly all those deliveries in it's current form, just as NK will never take all of it's previously planned deliveries in it's current form.
Bottom line, go ahead and buy that new car, you'll be fine. Maybe cancel the order for the G650 though.
It got to the point that F9 and NK were cannibalizing each other's demand on those few markets with tremendous ULCC demand, and figured out they needed to merge to consolidate that market, as opposed to continually fighting over MCO/LAS/Florida.
We'll see, but I don't think F9 will take nearly all those deliveries in it's current form, just as NK will never take all of it's previously planned deliveries in it's current form.
Bottom line, go ahead and buy that new car, you'll be fine. Maybe cancel the order for the G650 though.
Thread
Thread Starter
Forum
Replies
Last Post
