Originally Posted by
Australopithecus
That’s the point, Guptar. The majors can sell seats at a loss a lot longer than Rex can. And can refuse to interline baggage. And can tie them up by employing an army of angels to subtly shape opinions on social media. The majors can also manipulate travel agents (admittedly a smaller force these days) They can do many other tricks, large and small, to make Rex become a distant fourth choice when the punters choose an airline.
The rationale for Jetstar was to block any new LCC carrier from establishing itself at the cheap end of the market. Guess how merciless Qantas and Bain will be in the mid-market segment?
Rex is already bleating about Qantas deploying Dash-8s on their previously monopoly routes. That is just the first salvo in a needless market share war that Rex declared.
As has been previously mentioned, their fixed costs are starting to be locked in yet the virus may prevent any meaningful revenue offset for quite a few months yet, You cannot help the timing of that, but it has been a known odds-on possibility for about a year now.
Finally...a small fleet is its own risk: Look what happened to Tiger's reputation when their small fleet prevented service recovery after wx and mx disruptions. People are indeed price sensitive, but they are also smart enough to know when a $10 savings can cost them a day of vacation somewhere. Or to miss that wedding or other significant event.
Anyway...I have been in the industry a lot longer than thirty years, and I am aware that the ratio of failed airlines to remaining ones is probably approaching 50:1. It’s a mug's game.
People need to 'Get Real' as the airline business is commercial warfare and the Marquis of Queensbury Rules don't apply!