Originally Posted by L Dude 7
Using the food analogy, the major airlines are like Burger King. Present everywhere, and selling hamburgers for a few bucks. DH is the new upstart burger chain. They come in and open up restaurants right next to existing Burger Kings. They serve burgers for a penny each. They get praises for bringing down the price of hamburgers. However, they only sell hamburgers, fries, and coke. And they are not in all the locations of Burger King. Burger King has been forced to match prices on the humburgers. However, they have kept their other menu items at their regular prices, and even raised some to make up for lost revenue on hamburgers.
Hamburger lovers really enjoy the low prices of this new chain. However, chicken sandwhich lovers are a little upset.
No. UA is Chili's and DH is Burger King. Practically the same thing but for more money.
Originally Posted by L Dude 7
United reported an operating profit for last quarter. DH reported an operating loss. If DH is a 'lean' operation and UA still has a lot of fat to trim, then there is significant hope for UA's model - but not much for DH. Enjoy the low fares while you can. They will need to go up. Maybe DH can stay around and raise them to levels that can sustain it. Or maybe they will go away.
How much money did UA lose in the preceeding 4 qtrs? How does that compare to DH? How much were they losing before they filed? Keep in mind that they are operating in Ch11, which isn't a fair comparison since they got to stick it to a good number of their suppliers and of course, the employees.
I don't think you can compare an airline operating under BK protection for the last 37 months with one that (essentially) just got started 12 months ago. DH is still paying their bills.