STUFF I TALKED ABOUT IN THE 1st HALF OF 2021
Feb: A generational opportunity is present for management and labor to extinguish vestiges impeding commercial opportunities over the coming few years.
Feb: Whispers of $100 oil occurring in some trading circles. Improving fundamentals, global stimulus and speculators have some talking about the price point some time in 2022.
Mar: Jamie Dimon, Chmn./CEO of JP Morgan, there is a good chance of a "gangbusters" economy the rest of this year into 2022.
Mar: The fight for relevance among airlines and airports in the short to medium term will be fierce. Product differentiation will matter.
Mar: It feels like the late 80's again when WN was turning small hub airports into medium hubs. Attack the spoke. Protect the hub.
Mar: The real opportunities are in the international space. It is high time that we consider again - foreign investment. The vestiges of labor pushback should be recast as the best opportunities for growth.
Apr: Yesterday's consolidated market is being fragmented again.
Apr: whether after the Spanish Flu or after an economic downturn, recoveries begin with good government policy and innovation through technology. The decade that followed the Spanish flu - the “Roaring 20’s”.
May: As the level of traffic in markets added to the Southwest network get smaller, creating connectivity at certain nodes across their system will be important.
May: Small community air service will be a topic in Washington again. Can the network carriers afford to continue to offer a product that is everything to everyone?
May: Not one to shy away from the unpopular, but isn’t it time to have the conversation that not all airports are created equal? If the probability of fewer airports is greater than zero - it should factor into our thinking.
Jun: Simply the industry was not ready to put capacity back into the system at the pace of vaccine availability.
Jun: The pending pilot shortage that reared its head in 2013 - It is back in a big way.
Jun: Airline economics circa 1992, Mike Levine taught three important things:
1) Size confers advantages and disadvantages. Networks can be an effective way to combine flows and economize on marketing costs, but they come with vulnerabilities to labor, operational and political problems.
2) LCCs and (ULCCs) can be successful, but they face major challenges in growth. A large LCC tends to be more vulnerable to labor cost pressures and must also compromise its commitment to point-to-point service to grow past the limits that route density places on those airlines. THINK SOUTHWEST.
3) No airline model can be successful that does not find a viable solution to the route density challenge.
Allegiant has been brilliant in solving the route density challenge.
Jun: Some said it will not be how we managed the Pandemic on the way down, but rather how will we manage the recovery.
The second half of 2021 continues in the following post.
#swelbar