All Aboard! The LCC Gravy Train Now Departing!

[signals]

Article

Money in the bank!

 

[freedom]

all right!!!! woo hooo!!! good job parker and crew!

 

[cltrat]

yeah people were so excited the stock dropped .55 cents 🙄

 

[SolidCactus]

yeah people were so excited the stock dropped .55 cents 🙄

True, but in reality, that isn't bad considering the entire Dow had the biggest one day point drop in history. If it were a normal day, the stock would have most likely held up better with that news...

 

[roosterfish]

might want to thank the demise of ATA for this one...

It's just supply and demand. We just filled in ATA's void.

either way it's good news for us...
when does the contract end? i thought we really didn't have any spare widebodies...

 

[Art at ISP]

Forgive the skepticism, but what's the big deal here? Many airlines have transportation contracts with the government.

Of course it's good news of a sort, but I would imagine the only way they got this was being the lowest bidder--selling product under cost again.....

On the bright side, I guess it helps utilization and keeps people working.

 

[LD3]

Forgive the skepticism, but what's the big deal here? Many airlines have transportation contracts with the government.

Of course it's good news of a sort, but I would imagine the only way they got this was being the lowest bidder--selling product under cost again.....

On the bright side, I guess it helps utilization and keeps people working.

So will you agree that all the carriers listed in this article also sold their product under cost: ARTICLE

 

[Art at ISP]

So will you agree that all the carriers listed in this article also sold their product under cost: ARTICLE

As a matter of fact, LD3, I will agree - and that is a fundamental problem of the airline business. The inability to price according to cost plus markup.

 

[fanlube]

LD3,

Generally speaking and the key word is Generally a government contract is a low bid often below cost or at a razor thin margin affair. Companies that are successful in low bid contracts are usually very well run ultra efficient companies OR ones that need the cash flow to keep the doors open and perform the work on a cost absorption basis.

Conversely one could look to WN who is conspicous in its absence from this type of work to support Art's contention that US is selling below cost in order to get some cash flow as are the others.

All of that said aviation contracts with the government could be a No-Bid affair, however it doesn't appear to be the case and I'm not sure they all have to be widebody A/C which would be another reason WN would be excluded.

Last I checked Blackwater, Haliburton, and god knows how many others were anything but low bid contracts!! It's an infusion of cash that can't be a bad thing.

 

[signals]

Last I checked Blackwater, Haliburton, and god knows how many others were anything but low bid contracts!! It's an infusion of cash that can't be a bad thing.

Sometimes contracts involve risks. You take a chance on not making a profit or sustaining a loss. That is why sometimes higher bids get the contract.

Let me use a simpleton analogy that basically gives the idea of why sometimes Haliburton gets the contract over Meaningless Securities.

If the White House has a bid for mowing the lawn, you may be the lowest bidder and WIN the bid. If it doesn't rain, you make a great profit. If it rains alot you will lose your shirt. If you plow snow and bid low it may be a profitable year during a mild winter.

Big companies can survive the loss.

A total different analogy from the US-Pentagon contract but you get the point!

 

[signals]

Well stated and accurate.

Thanx!

 

[leprechaun]

Only ones riding the gravy train around here are Dougie and Scottie.

 

[ekjkj]

The government doesn't just pick the lowest bidder, they offer up for bids what services they need, then companies who can offer these services place bids to win the contract. If US Airways won the bid they must have met the first criteria or the government would not have entertained the bid (they would not have given the contract on a promise to fly from point a to point b ), so it begs to reason if they meet the criteria they must already fly to where the government needs to go (who is the biggest carrier from DCA? I still think it's US Airways). When the economy takes a dive two thing usually happen, the leisure fliers usually quit taking vacations, and the business traveler teleconferences instead of fling to have a face to face meetings. If that happens the guaranteed money from the government will be more than welcome. Good job US Airways-Ed

 

[oldiebutgoody]

The article says the contract is for "door-to-door" delivery. LCC doesn't even do that. I wonder what the plan is? Is LCC gonna buy UPS or something?

 

[Dog Wonder]

This contract has been around for years. If you have been around that long you would know.

It is about DOD CRAF missions flown on an as needed basis. No new revenue here. Just a continuation of a long standing US Airways contract.