putzin

Lol. Relax joey, it's just a convo.

Now go update your delta app. 😉

Lobaeux

I believe we don't have a crap product we have an image problem. Huge image problem. All one has to do is go to Yelp and read the reviews, then you realize that probably HALF the people who have reviewed Spirit or comment on stories about Spirit have never flown Spirit. They have taken the media's word (news sites, blogs, forums, etc.) and what "my cousin's girlfriend's next door neighbor's babysitter's dad" said about Spirit. I truly believe our product is not Virgin America, but it's not the worst flight either. We are still getting bad reviews because of a $100 bag fee, seats that don't recline and no free drinks.

I think we're on the right track business model-wise, we still have an image problem.

Jett i son

Could some of our service oriented FA and GA tell their fellow employees to never comment on Spirit in front of our PAX!!!
That would certainly help our image!
I have witnessed some embarrassing comments, which I attempt to discredit with humor.

GeauxPro

We don't have a crap product, we have a minimal product which most passengers think is crap.
The averaged American is a spoiled and self centered person, undereducated and unrealistic, a person who has no idea of the costs associated with traveling through a -55C atmosphere in an aluminum tube at eight miles a minute. Spirit's problem is that BBB has not incentivized the front line employees* to properly explain what it means to buy a ticket on Spirit airlines. I find that numerous passengers do understand the game and are quite happy with Spirit. It's the person who buys on Expedia and shows up thinking that all airlines are the same who ends up writing negative reviews on yelp.

Front line employees include: automated ticket outlets(on line brokers, etc), telephone CSAs and Airport CSAs. FA's might also be front line, but I see most of them are actually doing quite well in the battle against perception.

RP4242

RASM doesnt fall, just like it doesnt rise consistently for decades, or even usually more than a few quarters on end.

Second thing. The RASM loss is due to a softening of the market due to a market share fight that is directly being enabled by the CASM drop across the whole industry. Once capacity re-corrects the metrics will reverse course. Its not like CASM will cease to drop and then RASM will just keep dropping indefinitely.

Third thing which also is attributing to these numbers that was not there last year even is the amount of new markets which came online in off-peak times and are taking their time to mature, mostly again because of the competitive environment. Its extremely hard to keep RASM and yield positive when you are engaging in so much growth, especially growth where you have no existing flyer base.

IAH is nothing like DFW. Lets break down the differences.

1. There is no sudden dump of capacity to the tune of 600-1500 seats in almost every Top 30 O&D out of Houston overnight. Purely due to the fact that an artificial dam has been set there on demand for a good half a century.

2. There is no additional carrier at HOU fighting a fare war with SWA.

3. While DFW and DAL are almost interchangeable due to their proximity for quite a bit of the metro area the same cannot be said of Houston. Houston more resembles the fragmented Chicago market. This is a huge advantage if you really think about it because the competition is much more shielded from the other airfield.

4. Uniteds pricing trends are not like AAs.

I think this is a pretty fair assesment. While we discuss what can be done IMO on the macro scale nothing is going to work like time. The American consumer has to learn en masse not just via Spirit since we are only approaching 2% of the market but through other carriers that there are different business models. This is already happening but I severely doubt even if we took out Super Bowl Ads and put out PSA that this change would happen all that much faster. Thats not to say on the micro scale nothing can be done to help the process along of course.

As a point of comparison European ULCCs didnt grow overnight either into powerhouses, and they had a crapload of more advantages than us:

- A much poorer flying base than in the US which gave it natural tendencies to save money.
- Low hanging fruit markets all around in countries where there was only symbolic legacy presence, sometimes even zero.
- Far more flexible airport operations options when it comes to saving money.

Dr Pepper

Agreed. Perhaps crap was not the best word, I should have used inferior.
Saying inferior or crap I'm not being negative, its just part of the model.
If everyone could put out a VA type product at our CASM they would.

I'm not saying the sky is falling or we are going out of business. My concern is that during the earnings call they are saying not to worry about negative RASM because our CASM is falling faster. At some point CASM will stop declining (new contract?) and we will have to figure out a way to increase revenue if oil remains low for an extended period.

Dr Pepper

So is the same thing that is happening in DFW getting ready to happen in FLL when SW dumps a bunch of capacity there next year?

gonyon

How does the increase in 178 seaters effect casm/RASM? I would guess that we are putting more seats in a market for a only slightly higher cost thus decreasing casm but it, at least initially as new markets emerge and older ones mature, means lower loads thus reduced RASM.

Seems like a non issue to me

Dr Pepper

We get 5 321s this year also.

Qotsaautopilot

You could start with their bag tags clear as day in the overhead that says "barely fair".

Also and unrelated:
If you put something on the tradeboard put a freakin phone number with it!!!