Jump to content

Welcome to AirlineForums.com
Register now to gain access to all of our features. Once registered and logged in, you will be able to create topics, post replies to existing threads, give reputation to your fellow members, get your own private messenger, post status updates, manage your profile and so much more. If you already have an account, login here - otherwise create an account for free today!


Photo

US Airways Shares Slip Despite Merger Chance, Strong Demand


  • Please log in to reply
92 replies to this topic

#73
crazystnic

crazystnic

    Veteran

  • Registered Member
  • PipPipPipPipPip
  • 739 posts

CEO: American Airlines open to merger, but not right away

Click here to read the story.



Kirby says labor must be on board.

AA will not be on board and I hope USAPA is not on board either until they get us a contract that is in line with industry.
  • 1

#74
AAviator

AAviator

    Veteran

  • Registered Member
  • PipPipPipPipPip
  • 1384 posts
Interesting point.

With such a steep climb in labor costs, coupled to a network that has the highest consolidated operating costs in the marketplace, how does this help the LCC argument that they would be an asset in a merger?

Beuller?





Beuller?
  • 0

#75
PullUp

PullUp

    Veteran

  • Registered Member
  • PipPipPipPipPip
  • 739 posts

And, you think the judge will find that merging AA with US will be in the best interests of who? You are barely making a profit. I don't think our execs know how to spell the word. Exactly how would the "money boys" that you think rule the situation make a profit out of merging two messes? Two messes do not make a strong airline. They make one BIG mess.

Also, you forget that the AA guys have access to those same money boys. Why would the execs at AMR walk away and leave Doug in charge when they could get the money boys to fund their continued reign? Hey, maybe AMR will buy US and ground all Airbus a/c, close all duplicate stations, and lay off the US employees affected by these actions. That would reduce capacity in the industry nicely.

First, I never said merging with US was a good idea. I said that employees have no input. Don't believe anything management tells you, because they don't have control either. Everything now is being decided in some back room by a few very powerful people with a lot of cash that want to turn that pile into a bigger pile, and take most of it out of your pocket.
New airplane orders can and will be cancelled. Promises or contracts with employees can and will be abrogated. It has nothing to do with what your management wants or what your employees want. The control is in the hands of the guys with the $$. And, although the judge may look official, he's just there to rubber stamp the plan and make it all legal.
Enjoy the ride. I've been on a couple of them. It's no fun, I know. Best of luck.
  • 2

All for One and One for All.   Cooperate and Graduate.   Live Long and Prosper.


#76
Phoenix

Phoenix

    Veteran

  • Registered Member
  • PipPipPipPipPip
  • 6900 posts

First, I never said merging with US was a good idea. I said that employees have no input. Don't believe anything management tells you, because they don't have control either. Everything now is being decided in some back room by a few very powerful people with a lot of cash that want to turn that pile into a bigger pile, and take most of it out of your pocket.
New airplane orders can and will be cancelled. Promises or contracts with employees can and will be abrogated. It has nothing to do with what your management wants or what your employees want. The control is in the hands of the guys with the $$. And, although the judge may look official, he's just there to rubber stamp the plan and make it all legal.
Enjoy the ride. I've been on a couple of them. It's no fun, I know. Best of luck.

True dat.
  • 0

Uncle Bob's Mystery Pannel Dead Ahead.   :D


#77
PullUp

PullUp

    Veteran

  • Registered Member
  • PipPipPipPipPip
  • 739 posts

Interesting point.

With such a steep climb in labor costs, coupled to a network that has the highest consolidated operating costs in the marketplace, how does this help the LCC argument that they would be an asset in a merger?

LCC has lower labor cost/ASM than Southwest. 0.6 cents lower, which, when you do the math leaves a lot of room for negotiation.
Size matters in a network, and market share (even though that term is out of fashion). Being bigger is better - you have to compete with everyone else and the economies of scale will help float the boat.
LCC, even though it is a smaller major (maybe), still has significant markets in major population areas. Would it be better to incorporate that or compete with it?
I'm not privy to the specific numbers, and you seem more educated on the finer points of it all, but I do think that LCC brings some good things to any marriage.
Cheers.
  • 0

All for One and One for All.   Cooperate and Graduate.   Live Long and Prosper.


#78
AAviator

AAviator

    Veteran

  • Registered Member
  • PipPipPipPipPip
  • 1384 posts

LCC has lower labor cost/ASM than Southwest. 0.6 cents lower, which, when you do the math leaves a lot of room for negotiation.
Size matters in a network, and market share (even though that term is out of fashion). Being bigger is better - you have to compete with everyone else and the economies of scale will help float the boat.
LCC, even though it is a smaller major (maybe), still has significant markets in major population areas. Would it be better to incorporate that or compete with it?
I'm not privy to the specific numbers, and you seem more educated on the finer points of it all, but I do think that LCC brings some good things to any marriage.
Cheers.

You totally missed the point. Do the math and see what your costs are moving seats through the sky. It doesn't matter what you make or cost at the end of the day, its what your business will support. The LCC network has the highest consolidated (to include regional flying) cost going. Period. LCC generates the lowest average fare. Period. Your network is possible and functions due to your low labor costs. Period. If economy of scale were possible at LCC, Parker would be full throttle with the growth, but your costs are too high, and your revenue generation abilities are sub par. PHL-SLC was axed even before it started...

Best -comparative- data, although slightly dated:

http://www.airlinefi...__analysis.html

Explain how your "lower than southwest" labor rate, yet highest industry CASM gives you room to negotiate? And negotiate what?
  • 0

#79
WorldTraveler

WorldTraveler

    Veteran

  • Registered Member
  • PipPipPipPipPip
  • 10057 posts

You totally missed the point. Do the math and see what your costs are moving seats through the sky. It doesn't matter what you make or cost at the end of the day, its what your business will support. The LCC network has the highest consolidated (to include regional flying) cost going. Period. LCC generates the lowest average fare. Period. Your network is possible and functions due to your low labor costs. Period. If economy of scale were possible at LCC, Parker would be full throttle with the growth, but your costs are too high, and your revenue generation abilities are sub par. PHL-SLC was axed even before it started...

Best -comparative- data, although slightly dated:

http://www.airlinefi...__analysis.html

Explain how your "lower than southwest" labor rate, yet highest industry CASM gives you room to negotiate? And negotiate what?

well said. even if others don't want to accept that there are fundamental flaws in LCCs business model that they hope investors will just ignore when US makes offers for other airlines.
PHL-SLC was axed because DL and US have a history of allowing little market skirmishes to escalate... and both realize it wasn't worth it. Given that US was the 'agressor" in this case, they backed off rather than start a blood bath.
Of course, the kind of flying US was proposing (late night into another carrier's hub) makes even less sense at current fuel levels.
  • 0
Celebrating the best in commercial aviation.

#80
BoeingBoy

BoeingBoy

    Veteran

  • Registered Member
  • PipPipPipPipPip
  • 16512 posts
Of course, DL is still flying SLC-PHL. Guess that aggressor DL hasn't realized it isn't worth it...

Jim
  • 0
Silver: No question the [9th] embraced the issue that there was harm to the West Pilots.

#81
WorldTraveler

WorldTraveler

    Veteran

  • Registered Member
  • PipPipPipPipPip
  • 10057 posts
except that DL has a western hub at SLC as does US at PHX. Since DL also has nonstops from SLC to many of the major east coast cities and also carries the majority of traffic from SLC to the east coast even in markets where there are no nonstops, US' attempt to add flights from PHL-SLC at on off-peak hour would have done nothing except depress yields to/from SLC, which is why DL was willing to fight to keep US from allowing the flight to work.
DL has on its own reduced the number of east coast -SLC flights anyway because the MSP hub duplicates many of the same connections that could flow over SLC, MSP is a more centralized hub (less longhaul domestic flying), and MSP has a larger local market which makes it possible to better balance local and flow traffic. DL has the benefit of multiple hubs because of the merger and they aren't about ready to lose the advantages they gained to any other carrier.
UA is in the same position although they continue to work their own network balancing exercise.
Nobody doubts that any carrier should be able to try to make any route work... but the industry is mature and there is very good demand data on how much traffic exists on any given market and what price points are necessary to make new flights work. When it is obvious that a route will come at the expense of good yields for one carrier for a smaller benefit at another carrier, it shouldn't be a surprise when carriers move to protect their markets.
  • 0
Celebrating the best in commercial aviation.

#82
BoeingBoy

BoeingBoy

    Veteran

  • Registered Member
  • PipPipPipPipPip
  • 16512 posts

except that DL has a western hub at SLC as does US at PHX.


So you're saying that DL can fly to anywhere it wants from it's western hub like, say, PHL) but US can't do the same from it's eastern hub without being labeled "the aggressor"???

Jim
  • 0
Silver: No question the [9th] embraced the issue that there was harm to the West Pilots.

#83
WorldTraveler

WorldTraveler

    Veteran

  • Registered Member
  • PipPipPipPipPip
  • 10057 posts
didn't say that at all... I am saying that DL carries the majority of the traffic to/from SLC to/from the east coast. When you throw in an extra flight that was going to be added solely as a direct operating cost flight (maybe collecting a few more pennies worth of revenue at low costs), then it is apparent that pricing the seats on that flight for profitability is not the primary factor.
Remember that large portions of US' hub at LAS were based on DOC flying in the middle of the night. If it didn't make sense for US to do it there, why should DL allow them to do the same thing at SLC?
If US wants to commit real resources to a market and price the flight for its own profitability, then they would compete very well. But since Parker's ongoing mantra is that US obtains lower revenues than other carriers (validated by all kinds of data) and has costs that are higher than other carriers, then why should DL allow US to expand any further on the same basis that it is using now which does nothing good for the industry?
It is noteworthy that the answer to why DL will aggressively fight to keep US from expanding in key DL markets is the same reason why DL will make sure that US does not have the chance to get its paws on AA.
  • 0
Celebrating the best in commercial aviation.

#84
767one

767one

    Veteran

  • Registered Member
  • PipPipPipPipPip
  • 1027 posts

Interesting point.

With such a steep climb in labor costs, coupled to a network that has the highest consolidated operating costs in the marketplace, how does this help the LCC argument that they would be an asset in a merger?

Beuller?

More like Parker? Parker? The answer is Parker and his buddies will make a ton of money so they will of course expect everybody to understand why this merger would be a good idea. Parker will be stunned if nobody goes for his BS again. He will more than likely get another DUI.



Beuller?


  • 0




0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users