Thursday, September 07, 2006

Boyd Gets It Wrong Again

Michael Boyd and his firm is the perfect example of a group of consultants that feed the legacy carrier's inefficiency. They support the mercantilist system of airlines in the market today and make a lot of money off of it. Good for them...bad for the consumer. It's worth noting that they are not our competitor in any way. The dislike is based purely on the words they say and write.

The biggest problem we have with this presentation is the assertion that Jetblue, Southwest, etc. are LCCs. It's about time the world wake up to the fact that there are no LCCs in the US right now. The lack of passengers Boyd refers to is a myth. The passengers are there, Jetblue just cannot carry them profitably at $60, $70, $80 or even $90 each way. They need $110+ to breakeven and that number is going up by the day. Air Tran is evolving more toward the pure LCC model and is getting more efficient because of it, but they are not there yet.

On to to another item in the presentation...no kidding regarding <70 seat RJs. There is no news in that statement, even though we feel there are a few good places for some of that excess RJ capacity to find a home in this country.

4 Comments:

At 11:04 AM, Anonymous Anonymous said...

Wow, Emerge, don't sugar-coat it -- tell us how you feel about the Boyd Group! LOL

I'm not sure about your statement that athere are no LCCs in the U.S. I think the lines are starting to blur as the legacy carriers shed their costs to be able to compete better with the JetBlues and Southwests of the world. And even Dave Neeleman has admitted in public that he needs passengers to pay more in order for the company to make money.

But I agree with Boyd that there are still many communities that can't or won't be served by the LCCs, which don't have aircraft small enough to serve the routes profitably. JetBlue made a step by acquiring the Embraer E190s, but they are still too big for many communities.

And I agree with you, Emerge, that there are still good places that can be served with RJs. It seems to me that Delta is trying hard to turn over every rock to find those places, although I have to question cities like Wilmington, Del., Trenton, N.J., and Jacksonville, N.C.

 
At 12:57 PM, Anonymous Anonymous said...

New service out of Rockford announced next Wed?

http://www.rrstar.com/apps/pbcs.dll/article?AID=/20060909/BUSINESS/60908016&SearchID=73256342533333

 
At 9:34 PM, Anonymous Anonymous said...

G4

 
At 9:26 AM, Anonymous Anonymous said...

Both

http://www.rrstar.com/apps/pbcs.dll/article?AID=/20060910/OPINION01/109100010&SearchID=73256429873491

 

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