RE:RE:RE:RE:RE:" Geektome " the basher appears again..lolAnother reason the door was wide open for WJ in the early years was the cost of jet fuel, oil was approximately 28-30$ a barrel back then. You may consider this a fixed cost that benefited all airlines but none more so than a new low cost start up. This low fuel price allowed WJ to enter the game and be competitive using old gas guzzling Boeing 200’s which burned about 30 percent more fuel than the NG’s they fly today. The difference being WJ was able to get a B200 on line for about 5 million bucks as compared to a new NG that today runs over 50 million USD and even more for the gas sipping MAX8. By the time a few new start ups tried to move into the market place 6-7 years after their initial launch,WJ already had 25-30 fuel efficient NG’s on line and cash in hand of over 300 million bucks. Canjet launched an expansion westward and Jetsgo hit WJ’s bottom line hard but again it was the new rapidly increasing price of fuel which squashed their attempts. Canjet was using the old Boeing 737-200 which WJ had nearly phased out and Jetsgo the old MD80. By then it was too late, WJ’s costs and balance sheet allowed them to ride out the storm with the other 2 competitors fading away. Transport Can actually stripped away Jetsgo’s RVSM privileges for some reason of non compliance forcing the already cash strapped company to fly their gas guzzlers below 29,000 ft adding immensely to their fuel costs. Game over, rather than being forced to buy Jetsgo from ML for approx 25 million WJ just matched prices ( some as low a buck for the return portion of your flight) and waited it out. 2005 Jetsgo was by by.
Again my point being is the start up costs today by any LCC are astronomical compared to the mid 90’s, this being supported by the high costs of fuel. By the time a new competitor arrives and is able to secure financing on a few NG’s both WJ and AC have the Max8’s on line saving almost another 20 percent versus the NG’s. So again as you can see a completely different playing field today and almost impossible for a new under financed start up airline to be competitive. This is only the first of at least 5 or 6 points to come. This is not a fictional story, if u don’t believe me do your DD and you’ll find all the above to be true. Make your own assumptions. More points to come...standby.