Dear readers,

As you know, J.P. Morgan held its annual Industrials Conference in New York this week, the most influential analyst conference for U.S. airlines. In my last newsletter, I highlighted the presentations of United, American and Delta. Today, I focus on the three U.S. airlines that call themselves LCCs — Southwest, JetBlue and Alaska.

Southwest’s CEO Bob Jordan stumbled over a barbed question about technology, while Alaska shared interesting information about its domestic first class cabin. Meanwhile, JetBlue is confused why the U.S. Department of Transportation is still investigating its proposed merger with Spirit. I’ll start with what I consider the fireworks of the day — a zinger of a question from J.P. Morgan’s Mark Streeter to Southwest’s Jordan.

Remember that most sell-side analysts do not ask the toughest questions because they work for big banks that partner with airlines on loyalty schemes and advise them on mergers. Sell-side analysts are ethical and produce compelling independent reports, but you can imagine why they may not want to sharply criticize their bank’s big customer.1

So when I heard Streeter, a long-time sell-side analyst for J.P. Morgan, unleash a zinger on Jordan, I gasped. He set it up with a compliment, calling Southwest one of the world's best airlines. Then he made a sharp pivot: "With the best balance sheet and the most cash flow," Streeter said, "why don't you have the best of everything? Why don't you have the best technology backbone?”