Normann

At first it sounds good but two things to add:

1. When oil spikes it is about cash reserves. Do we have any? I don't know. Can we get injections from the owners? They did nothing for us in 2008.

2. When oil spikes most companies can raise ticket price, and cut capacity and start bleeding slowly. We can't do neither. Their higher income pax can make up some of the lost income from the bottom market. We can't do that because all we are serving is the bottom market. It is a segment most companies don't even serve. That is the big deal about Spirit. In other words, if we raise prices, we price ourself from the ULCC into the ULC market. There you can find JB, SW, etc. And we can't compete with them because those pax want more than just the lowest ticket. They want some quality.

Have you ever though about why there is not much of a selection of steaks in Walmart as opposed to poultry? It is because even the cheap steak is still kind of expensive. The lowest income people can't and don't eat steak a lot. If oil is the controlling expense of a ticket price, and it becomes very expensive, products that depend on it will become unavailable to the poorest. Like flying. If we can't continue to offer low prices because oil spikes we are gone.

Oil is bad new for Spirit. I hope this time around they will have some cash saved up and won't dive for the red button.

Dised101

Your cash reserve theory only works for so long. It is like a battery. The more full it is...the longer you can go without an engine....but eventually all the charge will be spent.

No...the model is what will overcome high oil prices. If you have sound maintenance...the engine (or alternator) should not fail...and you will not have to use the battery.

Spirit management regretted their decision to give back 7 aircraft in '08. Why? Lean Management. You minimize your negatives...and maximize your positives. When oil goes up, the ULCC (and for the record...I do not like ULCC) model provides a value for a customer.

Just like in your Walmart example....when people cannot afford a more expensive store, they go to Walmart to save money. True...the choices are fewer, but you have the goods at a cheper price.

The key to the ULCC is volume. At 28 aircraft, we could not offer the volume. In order for Spirit to be successful long term, they need aircraft. We are in a dangerous position right now. To be a successful ULCC...we need aircraft. To get aircraft....we need money....to get money....we need a good economy, decent oils prices, etc.

The risks are high....and we are definetely on the bubble....that is the reason for the IPO.

shiftwork

Spirit-Walmart???? More like "Pawn Stars"

ALPO Whisperer

Wal-Mart is consistently profitable, found everywhere, presents itself as a formidable competitor, and has undertaken a serious effort recently to improve their image worldwide after LISTENING to the feedback of their customers.

Spirit is more like K-Mart....found in certain markets, hanging on for dear life every few years, and managed with a general feeling that one store closing could devastate the entire enterprise. And of course, K-Mart is always, and I mean always...looking for investors to pump capital into their corporation just to keep the dream alive.

Ahhhhh...but just like Spirit, K-Mart employees hold out hope that "growth" is just around the corner and that their image as a retailer will improve with the public. Of course, there's just one little problem: that pesky corporation called Wal-Mart and its vast enterprise.

Regrettably, K-Mart employees watch their local store in Podunk, USA close a few months later as Wal-Mart brings a new store to their town, complete with a newly paved parking lot, fancy LED traffic lights, better terms on purchases and returns than K-Mart, and cheerful greeters. They build a Sam's Club across town for an encore simply because it gives them more presence in that market. For good measure, they get the "wink-and-nod" treatment from local city council members for anything they desire.

But then again, K-Mart always seems to survive...somehow...without really getting any bigger. They have a knack for moving around to different cities and finding some way to make it all work, much like our beloved "Espirwin."

Sailor

I agree with Norm and Scott, ULCC will work well with higher fuel prices. People will look for the best offer, and we are good at it.

Also, as every travel season, demand will drive prices, I dont think NK suffers, in the contrary, high end companies will. I think we are in good shape (with in normal levels).

As for the new hires, Im sure these individuals have done their research to make the decision of joining this company and it isnt based on DEC 2010's barrel value. We are not even close to what we saw in 08-09.

Dont let this fuel drive get you al panicky as if it was Breaking News on Faux News, its just the season. Next year will be a much better year. (half full/half empty theory)

Happy Holidays.

ALPO Whisperer

Only one problem...our customer, the leisure customer looking for that ultra cheap fare, is extremely price sensitive. If they're paying $3.10/gallon to fill up their vehicle, they may think twice about buying an airline ticket. A five dollar increase in the price of an airline ticket to cover rising fuel costs may cause them to NOT book that ticket.

No matter how cheap the ticket is offered, rising oil prices affect our customer more than the big boys' customers.

obx41

How many crews does NK staff per plane?

Sailor

Agreed ALPO, but still, we are the cheapest option, if they NEED-HAVE to fly, we are competitive.

About the CREWS per AC, I dont really know that one. But the 7-8 crew per AC i dont think it works since we run (3rd shift) and we are short. So...no clue how we staff this place.

CommutR4Life

S.O.S. Now - Stop Oil Speculation Now

dn_wisconsin

Our director of training told us "there is no specific model or magic number per plane" because the number goes up and down based on what time of year it is. Really? Is that why Spirit furloughs every September? Math would say somewhere around 13-14 pilots per plane. 400 pilots divided by 30 planes is over 13, I'm not sure how many pilots or planes are actually flying/on property. We lost another plane last week due to a big mistake, a 320 I believe.