At least Morgan Stanley analyst William Greene thinks so unless they blow it by trying to lower prices or jack up capacity in order to go after market share. I just hope they take this opportunity to put some deeper oil hedges on.
Airline analysts aren’t overly optimistic, fearing that the industry could reverse course from the very recent trend of cutting the number of flights and seats. As Greene hinted darkly, “falling oil prices introduce the risk of destructive competition as plans for capacity rationalization and revenue discipline fall victim to the seductive cost and market share benefits associated with capacity growth. Such actions would inevitably erode operating margins in an oil-driven up-cycle.”
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