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Non-Tech : VJET - FAA Approval
VJET 0.6400.0%Apr 1 5:00 PM EST
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To: Nicholas J. Begich III who wrote (80)10/1/1996 6:33:00 AM
From: David R. Helms   of 164
 
Nicholas, I guess we are all lowering our expectations on immediate stock price. I still believe JVET will be a winner and here are a few facts to support this:

o The union lost its bid in the courts to fire management (RE: Yahoo).

o Competition:

* KIWI filed for bankrupcy yesterday. They had the best cost advantage against VJET...but they are under capitalized and may be gone soon (JVET's cash box on the other hand, is full).

* Delta Express is touted as the primary JVET competitor. Relative to Delta, they will be able to fly more cheaply on packed eastern US vacation routes with somewhat lower labor rates. That said, there is no way they will be able to compete with VJET cost effieciencies, some of which were mentioned in your VJET company post. Its extremely difficult for a traditional carrier to reinvent itself into a low cost carrier (example: 1980's Continental Airlines blood-letting).

* Southwest: I like LUV, but they are WAY too cautious...mold grows faster than they expand their routes. LUV will be opening a hub at PVD this fall, but the window of opportunity may be gone. At any rate, LUV's routes are not and will not be a threat to VJET.

* USAIR: Get a grip.

The key for JVET is getting back to the number of destinations served pre-crash. This will help cover over-head expences. I do buy the company line on safety. They are the most inspected airline flying and the FAA has put their seal of approval on VJET...the FAA's reputation rides on JVET's success.

Cheers,

David
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