The United Expert at Motley Fool Opines Anew
12-03-2013, 04:01 AM
#1
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Posts: 400
The United Expert at Motley Fool Opines Anew
The New Airline Oligopoly Won't Last Long (JBLU, SAVE)
Exactly what used bookstore did this hack buy a finance text to write this amazing insight?
Low barriers to entry? Yes Mr. Levine you go start another Virgin America and tell me how low that barrier feels.
You miss one crucial point relative immensely to this gem of investor insight. Here's a clue: get this thing called a "globe" and realize that there is a whole planet out there besides the US market. Then get a route map for any of the big three legacies and notice Mr Levine all those little criss crossing lines that the legacies and their regional partners serve. Wow, it's a lot. Duh.
Indeed the website is aptly named.
Exactly what used bookstore did this hack buy a finance text to write this amazing insight?
Low barriers to entry? Yes Mr. Levine you go start another Virgin America and tell me how low that barrier feels.
You miss one crucial point relative immensely to this gem of investor insight. Here's a clue: get this thing called a "globe" and realize that there is a whole planet out there besides the US market. Then get a route map for any of the big three legacies and notice Mr Levine all those little criss crossing lines that the legacies and their regional partners serve. Wow, it's a lot. Duh.
Indeed the website is aptly named.
12-03-2013, 07:06 AM
#2
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Joined APC: Sep 2010
Position: EWR 777 Captain
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Not that my Crystal Ball is better than anyone else's but I must admit I see some logic to the principle that capacity constraint and increasing yields might create a growing opportunity for startups or established nationals to grow their market share. I know my sister who is young and single prefers to fly domestically on Virgin because the prices are lower and the flight attendants are cheery and the planes are roomy. Not saying I know if Mr. Levine is right just that it seems to me his argument may have some merit.
12-03-2013, 12:33 PM
#3
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Joined APC: Mar 2006
Position: 737 fo
Posts: 908
It all depends if people will invest money into a plan that has included very few successful startups. I think JB is the only success story in the last 10-15 years and they were very well financed from the start. Virgin has struggled even with their stellar reviews for service. Our industry has low barriers to entry but also a razor thin margin of profit. I worry less about new start-ups and more about cabotage. The cost advantages that the ME carriers have make the margins much better.
12-03-2013, 06:44 PM
#4
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Posts: 1,085
One thing is for certain. Nobody on Wall Street cares or is interested in an airline pilot having a cushy career. If we find ourselves having it good, forces will begin to brew to make sure that eventually we don't. History says so.
12-03-2013, 08:27 PM
#5
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Joined APC: Jan 2013
Position: Yes, & on the front Biffy
Posts: 34
Cabotage (AKA Emirates) and Airlines operating under flags of convenience (like what the shipping industry is now made up of and airlines like "Norwegian Air") are the long term threat.
flags of convenience - PPRuNe Forums
Norwegian Air Shuttle Operating Scheme Must Be Rejected | Transportation Trades Department
Domestic LCC's will always be a threat though and international LCC's have and will continue to be a threat - I think more so than the old style run of the mill clapped out B-737 trash haulers we have seen in years past. Look to the new style, cancerous, multi-national and rapidly growing network LCC's for a blue print of what's next. AKA Jetstar, etc. If you want to see how easily any US major airline can be decimated in short order through destructive domestic political schemes, LCC's, Cabotage, etc just look closely at what has happened to QANTAS.
flags of convenience - PPRuNe Forums
Norwegian Air Shuttle Operating Scheme Must Be Rejected | Transportation Trades Department
Domestic LCC's will always be a threat though and international LCC's have and will continue to be a threat - I think more so than the old style run of the mill clapped out B-737 trash haulers we have seen in years past. Look to the new style, cancerous, multi-national and rapidly growing network LCC's for a blue print of what's next. AKA Jetstar, etc. If you want to see how easily any US major airline can be decimated in short order through destructive domestic political schemes, LCC's, Cabotage, etc just look closely at what has happened to QANTAS.
12-03-2013, 08:57 PM
#7
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Posts: 181
"The ultimate reason is that the airline industry has relatively low barriers to entry and expansion."
"Virgin America grew rapidly in the first five years after its founding in 2007, but it was consistently unprofitable due to the combination of high fuel prices and new route start-up costs."
***? The author contradicts himself in the first few paragraphs?
"Virgin America grew rapidly in the first five years after its founding in 2007, but it was consistently unprofitable due to the combination of high fuel prices and new route start-up costs."
***? The author contradicts himself in the first few paragraphs?
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