That is pronounced Douche Bank, right?
TR From: Michael Rurik Halaby via Mifnet <[email protected]> Sent: Friday, September 5, 2025 9:07 AM To: Mifnet <[email protected]> Cc: Michael Rurik Halaby <[email protected]> Subject: [Mifnet 🛰 73998] The View (from 35,000 feet) - Key takeaways from 15th Annual Aviation Forum DB holds an annual aviation conference with c-suite speakers. Not my employer; I was sent this by a friend.  Deutsche Bank Research <https://content.markitcdn.com/research.db.com/research/content/images/alerts/db-logo.png> The View (from 35,000 feet) Key takeaways from 15th Annual Aviation Forum 05 September 2025 <https://research.db.com/research/research/Analyst?analystId=171EF727-A49A-B276-ADCE-ACA9EF8A5933&name=Michael%20Linenberg> <https://research.db.com/research/research/Analyst?analystId=171EF727-A49A-B276-ADCE-ACA9EF8A5933&name=Michael%20Linenberg> Michael Linenberg +1 212 250-9254 <mailto:[email protected]> Send email <https://research.db.com/research/research/Analyst?analystId=B5588D57-EA56-422F-81DE-B88AE1C84685&name=Hillary%20Cacanando> <https://research.db.com/research/research/Analyst?analystId=B5588D57-EA56-422F-81DE-B88AE1C84685&name=Hillary%20Cacanando> Hillary Cacanando +1 212 250-3393 <mailto:[email protected]> Send email <https://research.db.com/research/research/Analyst?analystId=93997BD5-80BD-6617-BDA0-7FCD8B533518&name=Shannon%20Doherty> <https://research.db.com/research/research/Analyst?analystId=93997BD5-80BD-6617-BDA0-7FCD8B533518&name=Shannon%20Doherty> Shannon Doherty +1 212 250-5935 <mailto:[email protected]> Send email <https://research.db.com/research/research/Analyst?analystId=8B68C1FF-2285-38F0-91AF-2C597AA43C7C&name=Doug%20Runte> <https://research.db.com/research/research/Analyst?analystId=8B68C1FF-2285-38F0-91AF-2C597AA43C7C&name=Doug%20Runte> Doug Runte +1 212 250-9319 <mailto:[email protected]> Send email Key takeaways from 15th Annual Aviation Forum On Thursday, September 4th, we hosted 18 US, Latin American, and European airlines at Deutsche Bank’s 15th Annual Aviation Forum at our New York headquarters. If we could summarize the day in a single sentence, it would be "Increased competition overshadows improving demand backdrop." The key takeaways are as follows: JetBlue started the day with a markedly improved Sep Q outlook … JetBlue was the only airline to update September quarter as it noted that “demand for air travel remained strong throughout the summer peak.” The company also called out close-in strength (i.e., within 14 days of travel) and provided an early read on the December quarter: “while it is early in the booking curve, JetBlue remains encouraged that current trends may carry-forward through year end.” The company guided to better-than-expected range midpoints for RASM (-2.75% vs. -4.0%), CASM-ex (+4.5% vs. +5.0%), and lower fuel prices ($2.50/gal vs. $2.575/gal). As such, we see upside earnings risk to both our September quarter loss per share estimate of $0.60 and the consensus loss per share of $0.50. … while Frontier and United announced a bevy of new routes … some, of which, backfilled Spirit’s contracting network While investors were encouraged by JetBlue’s commentary, this was offset by headlines announcing new routes by Frontier and United that unnerved investors, who where concerned that their actions would adversely impact margins. Frontier announced 22 new routes (many are 1x and 2x weekly and start in November and December) and United added two new routes as well as additional service between its hubs and key leisure destinations such as Fort Lauderdale, Orlando, and Las Vegas (on sale as of September 4, 2025 with service set to begin January 6, 2026). However, unlike a week ago when Frontier announced new service targeting 18 Spirit city-pairs, its most recent route additions only targeted three Spirit markets, i.e., Orlando – Guatemala City, Orlando – San Jose, Costa Rica, and Orlando – San Pedro Sula. Furthermore, United’s new services from Newark to Columbia, SC and Newark to Chattanooga, TN will backfill two markets that Spirit plans to terminate later this year. On a separate note, United is resuming service from Chicago and Washington-Dulles to Tel Aviv, Israel in November, two markets that we expect to be material contributors to United’s bottom-line (the company’s recently resumed double daily Newark – Tel Aviv service is off to a strong start). Fears of increased near-term competition weighed on airline share prices After starting the day in the “green”, airline share prices sold off as investors became concerned that the sector was heading into a period of intense competition spurred on by Spirit’s bankruptcy. The only US airline stock that appreciated for the day was Alaska Air Group (up 50 bps), which provided a very constructive update on their business and continues to successfully execute on its merger with Hawaiian. Not surprisingly, the Spirit bankruptcy was top of mind for investors The recent Spirit bankruptcy is already having an impact on the industry as airlines look to backfill the company’s cutbacks in service, which includes the termination of flights to 12 cities including Albuquerque, Birmingham, Boise, Oakland, Salt Lake City, San Diego, San Jose, and Sacramento, among others. We believe the company would be targeting aircraft and aircraft-related liabilities for reduction and are estimating that the low fare carrier could scale back its current operating fleet of 157 aircraft by at least one-third in the near-term. Given current Spirit’s cash burn (per its recently filed bankruptcy documents) and the fact that we are heading into a seasonal shoulder/off-peak period, we think we will have a better sense of the direction of the company’s restructuring by the end of the month. Domestic supply-demand backdrop improving; international long-haul remains strong Notwithstanding the aforementioned concerns around increased competition, it is important to note that domestic demand overall is improving as capacity growth moderates: +1.7% year-over-year in July, -0.1% in August, and -0.7% in September. December quarter domestic capacity is expected to be up 2.5% - 3.0% year-over-year, but we expect that to be further revised lower as airlines finalize their year end schedules. The majority of carriers we met with noted that domestic RASM was expected to show the most improvement among all regions with several carriers anticipating the return of domestic RASM growth as we head into year end. Regarding international, American and United noted strength in key long-haul transatlantic and transpacific markets. Conversely, American called-out short-haul Caribbean/Central American markets as being more challenging, although still producing healthy profits. Corporate travel is trending in the right direction; anticipating a solid December quarter Alaska, American, and United all noted varying degrees of improved corporate travel during the late summer with the expectation that would continue into the December quarter. Our call is that we think the improvement in corporate travel would outpace the improvement in discretionary travel in the December quarter in both domestic and international markets. Product enhancement a key focus; a driver of increased premium share Investing in the customer with new products and amenities was a topic of discussion in several of our meetings. More specifically, Southwest announced plans to offer free Wi-Fi and JetBlue highlighted its recent partnership with Amazon’s Partner Kuiper. The Southwest initiative to offer free unlimited Wi-Fi is built around a new partnership with T-Mobile and available to its frequent flyer members effective October 24, 2025. JetBlue, which has been the industry leader when it comes to free Wi-Fi, is looking to augment its current offering with the Amazon service starting in 2027 on a portion of its fleet. On a separate note, Alaska’s new and innovative credit card/loyalty program is expected to help the company “capture” a greater share of the premium travel market as the carrier prepares to expand into Europe next year.
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