Summary: The airline industry has changed. How do the remaining big players separate themselves from one another? Tim Dunn detailed Delta's focus city strategy in a recent article - https://seekingalpha.com/article/4167776-deltas-focus-city-strategy-delivers-revenue-advantages - which shows one approach. We look at whether management's story checks out and what it means for investors to consider an oligopoly. Topics covered: What’s going on in this thesis and with the focus city model? (1:30 minute mark) Deconstructing the spoke & hub model (4:30) Management’s flexibility in an oligopolistic market, and the risks of this approach (7:30) What are the competitive dynamics in the airline industry? (12:10) Recalling regional airlines (16:50) Management’s strategy and the impact on investors (18:45) What to do with the airline industry? Regulate, invest, or compile the hate index? (24:20)
