Specialist
Senior Manager, Network Planning at Frontier Group Holdings Inc
Agenda
- Recovery prospects for LCC (low-cost carrier) airlines amid coronavirus, including Avelo and Breeze’s impact
- Opportunities and challenges for start-up LCCs and impact of Avelo and Breeze emergence
- Competitive analysis of and changes in key leisure markets such as Cancún and Punta Cana
- Impact of Breeze and United Airlines’ fleet expansions on revenue and cost metrics
- Industry M&A including Southwest Airlines (NYSE: LUV)-Sabre (NASDAQ: SABR) and US government’s attempt to end JetBlue (NASDAQ: JBLU)-American Airlines merger
Questions
1.
What is the operating environment for the US domestic LCC [low-cost carrier] airline industry?
2.
What makes capital discipline return, given your comments on this? How quickly could these airlines deploy the accumulated liquidity? Capital seemed to be made available to the domestic LLC airline industry throughout the crisis. No airlines went bankrupt and they were able to raise debt, equity, asset-backed deals, sale-leasebacks and so on.
3.
How does the emergence of players such as Avelo Airlines and Breeze Airways affect market share or the environment for LCCs and ULCCs [ultra-low-cost carriers]? Some start-up airlines have moved forward despite the collapse brought on by coronavirus.
4.
Have Avelo and Breeze had the same strategy from the beginning or have they adapted their original plans?
5.
Are there start-ups besides Aha Airlines that we should be monitoring in the domestic LCC airline industry?
6.
Could you elaborate on how fleet could evolve for LCCs and ULCCs, given you mentioned Breeze increased its A220 aircraft order? How could this evolution differ from the major carriers?
7.
What do you expect around the availability and cost of narrow-body aircrafts, the workhorse planes of the leisure market? Are there still a lot of parked and available planes? What are your thoughts on used vs new aircrafts? How could deliveries play out?
8.
What are your thoughts on United Airlines’ June 2021 announcement around its aggressive fleet expansion? It’s the largest in the company’s history. Will it factor into how LCCs develop their fleets or is it too far down the road and uncertain when Boeing and Airbus will get these orders?
9.
How do you distinguish ULCCs such as Allegiant and Spirit if United, Delta Air Lines or American Airlines don’t want to target the same passengers as them?
10.
Have coronavirus and leisure travel changed any significant routes or opportunities? You touched on Burbank, but where might have competitive dynamics changed?
11.
Could any changes reverse or did the availability of liquidity reduce the likelihood of what could have been a big scramble for real estate at airports? Now that government funds are being returned, I’m not sure what the statuses of slot waiver exemptions are.
12.
What are your thoughts on the US government trying to stop the JetBlue-American merger? What impact would a successful merger have? Would it be shut down by the government?
13.
What capacity additions do you expect in Q4 2021 and in 2022? What could it mean for pricing?
14.
What can you tell us about Southwest Airlines joining Sabre’s GDS [global distribution system]? Is this significant? What are your thoughts on distribution channels and what that might mean for LCCs?
15.
How could labour costs play out in the domestic LCC airline industry, given you mentioned that costs are high? There have been pilot shortages and a Southwest pilot is suing the airline. What trends or concerns do you expect?
16.
Are there any emerging issues that we haven’t covered yet and investors should be aware of?
