4 ms·

It's true that Spirit has competed well recently. Spirit (and other airlines) innovated and temporarily enjoyed a large market share of a second modality of co

by gen220 4y ago

It's true that Spirit has competed well recently. Spirit (and other airlines) innovated and temporarily enjoyed a large market share of a second modality of commercial flight (very low budget travel). But it isn't (and wasn't, if you compare their operating margin over time [1]) a durable advantage. The reason is there's very little preventing you and I from starting Soul Airlines, and copy-pasting the Spirit playbook. Many airlines have, and more will. And this drives their prices down, which is great for you but not for long-term Spirit investors. At the end of the business cycle, the logical limit of their operating margin has proven to be functionally indistinguishable from Delta's. [1]: https://www.macrotrends.net/stocks/stock-comparison?s=operating-margin&axis=single&comp=DAL:SAVE https://www.macrotrends.net/stocks/stock-comparison?s=operat...

giantrobot 4y ago
I wish an airline would copy and paste the Ted playbook. Every seat was basically business class (on the flights I took) and you had the open seating model of Southwest. I only flew on a couple Ted flights and I don't know if my experience was standard but those were comfortable flights.
- gen220 4y ago
  My guess is that it was less consistently profitable than a more typical cabin arrangement. The reality is it's harder to fully book a plane like the one you describe, than one with a distribution of seats that more closely resembles the distribution of the commercial airline customer population, especially when you consider how to pass on the cost of spiky jet fuel to the people in the cabin. On a plan with 8 business class seats, you can pass on most of that price to those 8, and you'll still fill the rest of the cabin and make money on the flight. With "only" 30 business class seats, it's a different story. Missing 6 seats might cause you to lose money. Wikipedia says Ted folded in 2008, amid a spike in fuel prices.
  - giantrobot 4y ago
    Oh I'm sure Ted was only marginally profitable at best. A flight would have the same fixed costs as a traditionally laid out plane with fewer paying seats. Since the cost of the seats wasn't much higher than other airlines' economy class, there weren't many avenues for Ted to make a profit. I am just lamenting the loss of an airline where I, being taller than the average human economy seating is optimized for, was actually comfortable for the whole flight. The only times I've been comfortable on a plane have been in exit rows or the small number of times I've splurged and flown first class.
- pinko 4y ago
  Midwest Express (YX) tried this (a whole plane of quasi-first-class seats for only a little more $$$ than coach on other airlines) for a decade or two and couldn't make a go of it either. It was great while it lasted, though.

by gen220 4y ago

giantrobot 4y ago

I wish an airline would copy and paste the Ted playbook. Every seat was basically business class (on the flights I took) and you had the open seating model of Southwest. I only flew on a couple Ted flights and I don't know if my experience was standard but those were comfortable flights.

gen220 4y ago
My guess is that it was less consistently profitable than a more typical cabin arrangement. The reality is it's harder to fully book a plane like the one you describe, than one with a distribution of seats that more closely resembles the distribution of the commercial airline customer population, especially when you consider how to pass on the cost of spiky jet fuel to the people in the cabin. On a plan with 8 business class seats, you can pass on most of that price to those 8, and you'll still fill the rest of the cabin and make money on the flight. With "only" 30 business class seats, it's a different story. Missing 6 seats might cause you to lose money. Wikipedia says Ted folded in 2008, amid a spike in fuel prices.
- giantrobot 4y ago
  Oh I'm sure Ted was only marginally profitable at best. A flight would have the same fixed costs as a traditionally laid out plane with fewer paying seats. Since the cost of the seats wasn't much higher than other airlines' economy class, there weren't many avenues for Ted to make a profit. I am just lamenting the loss of an airline where I, being taller than the average human economy seating is optimized for, was actually comfortable for the whole flight. The only times I've been comfortable on a plane have been in exit rows or the small number of times I've splurged and flown first class.
pinko 4y ago
Midwest Express (YX) tried this (a whole plane of quasi-first-class seats for only a little more $$$ than coach on other airlines) for a decade or two and couldn't make a go of it either. It was great while it lasted, though.