Airline Conference
ARLINGTON (theHub.com) - Yesterday’s JPMorgan 2005 Airline Conference provided a venue for several airline executives to speak on the future of the industry and the roles individual carriers will play in that future. A number of media outlets covered the remarks at the New York conference.
When the perennial topic of consolidation arose, executives weighed in. United Airline’s CEO Glenn Tilton said the industry is carrier heavy and that “there need to be fewer network legacy carriers.†He went on to say that when United emerges from bankruptcy later this year, a merger would not be necessarily in the cards, but would be best for the carrier and the industry overall.
Continental President Jeff Smisek disagreed, saying the elimination of weak carriers, not mergers, will cure the industry’s excess capacity. American Airlines CEO Gerard Arpey said, “It takes a lot of money to successfully integrate two complex, large organizations,†referring to American’s acquisition of Trans World Airlines’ assets in 2001.
Southwest has taken the most recent steps in the consolidation game, with its acquisition of six of ATA’s Chicago Midway gates. But even Southwest felt the pinch of overcapacity in the marketplace, said its CFO Laura Wright. “There’s just a tremendous amount of seats in the market,†which caused Southwest to lower its fares by 5 percent last month as compared to January 2004.
Delta, with its “SimpliFares,†is attempting to keep Southwest at bay. Delta’s CFO Michael Palumbo said his company is competing with Southwest and other low-cost, low-fare carriers on close to 70 percent of its routes.
However, Delta received a share of criticism for reducing its fares and affecting industry revenue. Several executives commented that airline balance sheets would continue to weaken as a result. Said Continental’s Smisek, “Our friends in Atlanta kind of finished off the domestic system for us.â€
Subsequently, some carriers are reducing growth domestically and instead focusing on international routes. The majority of Continental’s expected 5 percent expansion may occur internationally.
Likewise, Northwest’s CEO Doug Steenland said his carrier is “prepared to lower the overall level of flying,†adding, “When people really look at the overall contribution that some of these marginal flights are making, they will come to the same conclusion -- they are better off shrinking a little bit than keeping the same number of shells in the air.â€
Heavy Bookings
ARLINGTON (theHub.com) - Almost 144,000 customers are booked on US Airways mainline today, and another 62,000 are expected to travel with US Airways Express. Adding US Airways Shuttle’s 8,000 customers and MidAtlantic’s 7,000, over 221,000 customers are scheduled to fly us today to begin the President’s Day holiday weekend.
President's Day typically marks the start of peak season to Florida and the Caribbean. And this year, for US Airways, to Latin America.
Today also marks a record day in the number of customers scheduled to travel from Ronald Reagan Washington National Airport. Due to increased seating capacity, Washington today will board close to 15,000 customers. This compares to the more than 12,000 customers who flew during Thanksgiving out of Washington.
In the Charlotte hub, employees will board almost 46,000 customers today. This will result in an 80.9 percent load factor overall for the station, including both US Airways and US Airways Express.
Regards,
USA320Pilot
ARLINGTON (theHub.com) - Yesterday’s JPMorgan 2005 Airline Conference provided a venue for several airline executives to speak on the future of the industry and the roles individual carriers will play in that future. A number of media outlets covered the remarks at the New York conference.
When the perennial topic of consolidation arose, executives weighed in. United Airline’s CEO Glenn Tilton said the industry is carrier heavy and that “there need to be fewer network legacy carriers.†He went on to say that when United emerges from bankruptcy later this year, a merger would not be necessarily in the cards, but would be best for the carrier and the industry overall.
Continental President Jeff Smisek disagreed, saying the elimination of weak carriers, not mergers, will cure the industry’s excess capacity. American Airlines CEO Gerard Arpey said, “It takes a lot of money to successfully integrate two complex, large organizations,†referring to American’s acquisition of Trans World Airlines’ assets in 2001.
Southwest has taken the most recent steps in the consolidation game, with its acquisition of six of ATA’s Chicago Midway gates. But even Southwest felt the pinch of overcapacity in the marketplace, said its CFO Laura Wright. “There’s just a tremendous amount of seats in the market,†which caused Southwest to lower its fares by 5 percent last month as compared to January 2004.
Delta, with its “SimpliFares,†is attempting to keep Southwest at bay. Delta’s CFO Michael Palumbo said his company is competing with Southwest and other low-cost, low-fare carriers on close to 70 percent of its routes.
However, Delta received a share of criticism for reducing its fares and affecting industry revenue. Several executives commented that airline balance sheets would continue to weaken as a result. Said Continental’s Smisek, “Our friends in Atlanta kind of finished off the domestic system for us.â€
Subsequently, some carriers are reducing growth domestically and instead focusing on international routes. The majority of Continental’s expected 5 percent expansion may occur internationally.
Likewise, Northwest’s CEO Doug Steenland said his carrier is “prepared to lower the overall level of flying,†adding, “When people really look at the overall contribution that some of these marginal flights are making, they will come to the same conclusion -- they are better off shrinking a little bit than keeping the same number of shells in the air.â€
Heavy Bookings
ARLINGTON (theHub.com) - Almost 144,000 customers are booked on US Airways mainline today, and another 62,000 are expected to travel with US Airways Express. Adding US Airways Shuttle’s 8,000 customers and MidAtlantic’s 7,000, over 221,000 customers are scheduled to fly us today to begin the President’s Day holiday weekend.
President's Day typically marks the start of peak season to Florida and the Caribbean. And this year, for US Airways, to Latin America.
Today also marks a record day in the number of customers scheduled to travel from Ronald Reagan Washington National Airport. Due to increased seating capacity, Washington today will board close to 15,000 customers. This compares to the more than 12,000 customers who flew during Thanksgiving out of Washington.
In the Charlotte hub, employees will board almost 46,000 customers today. This will result in an 80.9 percent load factor overall for the station, including both US Airways and US Airways Express.
Regards,
USA320Pilot
