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Robert Lange, Head of Business Analysis and Market Forecast, said today that the fragmented cross-border travel regulations and uneven vaccinations continue to inhibit passenger traffic recovery from the COVID pandemic. International traffic recovery sharply lags domestic recovery, Lange said. But there is a major pent-up demand. Looking at just the United Kingdom, Lange said Airbus saw a spike in trip selection.
In a subsequent note to investors, two segments are worth reprinting here. Why double-down on Boeing? We asked about the MAX 7 vs. A aka the old C Series procurement process.
Pilot training cost, simulators, technology, buildings, basically the entire sunk cost infrastructure of course created a high bar for Airbus to hurdle to make the A work. Southwest management also highlighted the fact that the opportunity to really hedge the fleet by adding a second type will come when the MAX is replaced timing TBD, but we have long held the view that the MAX is a transitional program with a production lifespan that will likely be shorter than prior versions.
Is an international rebound this summer really off the table? True, American could stretch utilization closer to 14 hours if redeploying said aircraft to, say, a Transatlantic segmentlike Rome, but bookings wouldhave to start from scratch and profitability would suffer.
We think this is an important point. So the NG had a 21 year run. The Max-7 which competes with the A will not be replaced by the either the NSA or NMA those aircraft will have a base model too large to be competitive if shrunk that small.