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If you surveyed 100 people and asked them what’s the biggest traffic flows between regions, a lot of people would surely answer the transatlantic route (North-America to Europe). And boy would we all be wrong…
I’m not sure I guy the cycle on slide 18 in the second deck. Aren’t some plane/routes profitable even if not right sized? Sure, I’ll buy that right-sized yields more. But we’re missing some equations here. Because companyX might prefer to buy a bigger plane to use on some other routes where it would be right-sized yet ill-sized on some routes BUT still be profitable (even if yields less). And, in the end, the conclusion that better yields open more routes, I’m not sure of the logic there. As long as it’s profitable, smart money will come in to fund more of these profitable routes (right sized or not). So, anyway, I’m not sure I follow the logic here. I guess I’m not to sure of the part of that chart where it says: “Greater Profitability” enabling “New Markets”… It’s not the greater profitability that enables new markets. It’s the new planes themselves that make it economically feasible to create new city-pairs. So, it’s not really that it’s more profitable, it has more to do with the fact that the profitability suddenly emerges from “red” to “well into the black”. Maybe we’re saying the same thing here 😉