- Nov 9, 2003
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ROUTE COMMITTEE REPORT
XXXXXXX, Chairman
March 2004
The Route Committee has continued to enjoy a good line of communication with US Airways management. I have received the required data and cooperation from various departments responsible for dissemination of fleet count and route data.
Fleet Count (Mainline and Express)
The mainline fleet “plan†stands steady at 279 aircraft through 2007, with no current plans announced to grow or shrink the mainline fleet.
The actual mainline fleet count has fluctuated between 280, 282, and 281 aircraft in the November 30, 2003 through January 31, 2004 timeframe (active aircraft count fluctuates between 258-260 units).
Some late breaking recognizance shows that 7, possibly 8 Airbus aircraft been sent to BFM which is where the Mobile Aerospace Maintenance Facility is located. A/C 101, 704, 705, 706, and 707 which had been flying the line arrived at BFM Feb 4-6. A/C 702 & 703 were ferried from GYR storage facility (Goodyear AZ) to BFM on February 22. A/C 701 was also slated to be ferried from GYR to BFM during the week of Feb 23, but at the time this report was being written verification of that movement has not been obtained. The A/C are undergoing the heavy maintenance checks necessary to keep them flying. The maintenance track on those A/C is reportedly 17-21 days and all should be complete by the time you take action on this agenda item. The significance of completing the maintenance on those A/C is that the low numbered -319’s (up to a/c 715), and all -320’s are over water equipped. With a/c 700 already having completed the heavy maintenance cycle at BFM, only a small number of A/C requiring heavy maintenance are in queue for BFM.
The Small Jet count is continuing to increase.
As of January 31, 2004 109 Small Jets (SJ) are in operation,
The planned total SJ increase in 2004 is 106 airframes (wholly owned 89, and affiliates 17).
Total Express, Wholly Owned & Affiliate Small Jet and Turbo-prop airframes stand at 304 aircraft (Wholly Owned 118/Affiliate 186).
Route System Evolution
US Airways continues to morph the route system, and as Small Jets increase in numbers, management continues to look for other opportunities to profitably deploy mainline aircraft. Significant changes are being implemented resulting in revenue enhancements, load factor increases, and profit and loss numbers being positively enhanced. The following discussion will focus on specific areas outlining the evolution of our route system and fleet mix.
International
Transatlantic
January 2004 Revenue per Available Seat Mile (RASM) is up 15.1% year-over-year, 1.7% better than the industry.
Currently, transatlantic frequencies are down from 16 to 11, reflecting the seasonality of the region. Seasonal flights pulled from schedule consist of PHL/LGW #2 (#2 = second daily frequency), PHL/CDG #2, PIT/LGW, PHL/DUB, and PHL/SNN.
The summer 2004 plan calls for new service in PHL/GLA, replacing PHL/LGW#2; the return of SNN and DUB; PIT/LGW will return; and CLT/FRA will upgrade to an A330 for Star feed.
Caribbean
Caribbean expansion, both daily frequencies, as well as weekend flying is on the increase. An example of route evolution, and revenue enhancement opportunities, is the weekend only Caribbean flying (also Florida flying). As a result of low Saturday load factors and yields in hub shorthaul markets, an entire week of positive revenue generation, flying a particular city pair or aircraft routing, can be erased on Saturday alone. This scenario is driving US Airways management to deploy mainline aircraft to weekend only Caribbean/Florida routings, which results in the airframe producing revenue, when historically it was losing considerable revenue in lower LF, lower yielding Saturday hub short-haul markets.
Some significant Caribbean stats include:
Between 4th Quarter 2003 and 1st Quarter 2004 (3 months), the Caribbean market saw 26% growth, from 261 weekly roundtrips to 328.
Weekdays will grow from 33 to 41 roundtrips, while Saturdays will grow from 55 to 74 roundtrips. Note that we nearly double weekday frequencies on Saturdays.
New daily services were added in BZE, CUN, CZM, MBJ, NAS, PUJ, SJO, SJU, and SXM.
In addition to these stations, new Saturday service was added to STT, SKB, PLS, LRM, GCM, AUA, and ANU.
BOS will have 21 weekly round trips, including 7 on Saturday, while LGA will have 10, including 4 on Saturday.
The beginnings of a PHL evening bank to the Caribbean (with connectivity to/from Europe) has begun, with daily 1800 EST departures to SJU and CUN, and Saturday only departures to PUJ.
1st Quarter 2004 verses 1st Quarter 2003, year-over-year, roundtrips are up 37%, from 240 to 328.
By June, Caribbean frequency will be up 45% year-over-year, with 371 weekly roundtrips (47 weekday, 81 Saturday).
We will become the largest carrier to BDA, with 8 gateways (including new MCO/BDA service).
February 25, 2004 we announced increased LGA-Caribbean frequency, effective June 2004 to AUA, STT, and SJU #2.
Also, by the end of February 2004, we will file for US Gov’t authority in FLL/CUN, with the expectation that we will fly it this summer.
An additional significant statistic is with 35% more Caribbean capacity in April 2004 year-over-year, our booked load factor is approximately 5 load factor points ahead of last year, therefore, the Caribbean is clearly a sweet spot that the company continues to exploit. This has not gone unnoticed as the other airlines (AMR, DAL, CAL, UAL, and Spirit) are attempting to keep pace with our Caribbean growth.
Domestic
Highlights:
Saturday flying: Added 5 Saturday point-to-point Florida roundtrips in February (MCO/ALB, BDL, BUF, PVD, and SYR). To date, they have run 90% full, with solid bookings going forward.
To be announced in early March the addition of 5 new Saturday Florida markets, effective June 04: MCO/BWI, CMH, MDT, RDU; and FLL /PVD.
The PHL/Southwest route response was filed in mid February, consisting of additional flights in PHL/ORD (+2 flights to 8), MCO (+1 to 10), PHX (+1 to 4), PVD (+2 to 7), and LAS (+1 to 6).
Mainline Equipment Downgrades
5 mainline aircraft were downgraded to Small Jets in 1st Quarter 2004 to fund mainline Caribbean flying (PHL 3 aircraft, PIT 1, CLT 1).
The emphasis remains on PHL downgrades in the short term, as much of PIT and CLT are already downgraded.
The company looked at Nov 2003 year-over-year market downgrades, and found that load factor (LF) improved 24 pts, from 47% on mainline to 71% on Small Jets.
For the remainder of 2004, the company expects to downgrade an additional 7 aircraft, primarily in 2-3 specific medium-haul markets (including CLT/SRQ, effective May 04).
As a result, Express Small Jet aircraft deployment in 2004 will focus on:
Turbo-prop upgrades (54% of SJ allocations),
New frequencies in existing markets (33% of SJ allocations).
Mainline downgrades will make up only 8% of SJ allocations for the remainder of 2004.
Summary of Route Discussion
In closing, US Airways continues to diversify its route portfolio. An overview shows:
International ASM’s will make up 27% of all mainline ASM’s in 1st Quarter 2004, rising to 29% of mainline ASM’s in Summer 2004, and
Compared to 1st Quarter 2001, Summer 2004 International ASM’s are up over 12% points, nearly doubling from 16.6% of mainline to 29% (Transatlantic 18%, Caribbean 11%), and
Saturday flying, both hub and point-to-point, exploiting revenue opportunities in Caribbean and Florida markets is having a significant positive effect on the profit & loss equation, and
Small Jets are beginning to focus on upgrading the prop product and additional frequencies to existing markets.
In 1st Quarter 2004 verses 1st Quarter 2001 (3 yr comparison), SJ ASM’s are up 141%, and the SJ as a percentage of Mainline have increased from 3% in 1st Quarter 2001 to 11% in 1st Quarter 2004.
The months to come may produce reportable events affecting fleet size and routes. Company plans (TBD) for a competitive response to SWA and other LCC’s, may have a measurable effect on our fleet and routes. I will keep the MEC advised as to any changes.
I have enjoyed serving the MEC as Route Committee Chairman for the past few quarters, and would like to continue to serve in this capacity for another term.
Respectively
submitted, XXXXXXX
XXXXXXX, Chairman
March 2004
The Route Committee has continued to enjoy a good line of communication with US Airways management. I have received the required data and cooperation from various departments responsible for dissemination of fleet count and route data.
Fleet Count (Mainline and Express)
The mainline fleet “plan†stands steady at 279 aircraft through 2007, with no current plans announced to grow or shrink the mainline fleet.
The actual mainline fleet count has fluctuated between 280, 282, and 281 aircraft in the November 30, 2003 through January 31, 2004 timeframe (active aircraft count fluctuates between 258-260 units).
Some late breaking recognizance shows that 7, possibly 8 Airbus aircraft been sent to BFM which is where the Mobile Aerospace Maintenance Facility is located. A/C 101, 704, 705, 706, and 707 which had been flying the line arrived at BFM Feb 4-6. A/C 702 & 703 were ferried from GYR storage facility (Goodyear AZ) to BFM on February 22. A/C 701 was also slated to be ferried from GYR to BFM during the week of Feb 23, but at the time this report was being written verification of that movement has not been obtained. The A/C are undergoing the heavy maintenance checks necessary to keep them flying. The maintenance track on those A/C is reportedly 17-21 days and all should be complete by the time you take action on this agenda item. The significance of completing the maintenance on those A/C is that the low numbered -319’s (up to a/c 715), and all -320’s are over water equipped. With a/c 700 already having completed the heavy maintenance cycle at BFM, only a small number of A/C requiring heavy maintenance are in queue for BFM.
The Small Jet count is continuing to increase.
As of January 31, 2004 109 Small Jets (SJ) are in operation,
The planned total SJ increase in 2004 is 106 airframes (wholly owned 89, and affiliates 17).
Total Express, Wholly Owned & Affiliate Small Jet and Turbo-prop airframes stand at 304 aircraft (Wholly Owned 118/Affiliate 186).
Route System Evolution
US Airways continues to morph the route system, and as Small Jets increase in numbers, management continues to look for other opportunities to profitably deploy mainline aircraft. Significant changes are being implemented resulting in revenue enhancements, load factor increases, and profit and loss numbers being positively enhanced. The following discussion will focus on specific areas outlining the evolution of our route system and fleet mix.
International
Transatlantic
January 2004 Revenue per Available Seat Mile (RASM) is up 15.1% year-over-year, 1.7% better than the industry.
Currently, transatlantic frequencies are down from 16 to 11, reflecting the seasonality of the region. Seasonal flights pulled from schedule consist of PHL/LGW #2 (#2 = second daily frequency), PHL/CDG #2, PIT/LGW, PHL/DUB, and PHL/SNN.
The summer 2004 plan calls for new service in PHL/GLA, replacing PHL/LGW#2; the return of SNN and DUB; PIT/LGW will return; and CLT/FRA will upgrade to an A330 for Star feed.
Caribbean
Caribbean expansion, both daily frequencies, as well as weekend flying is on the increase. An example of route evolution, and revenue enhancement opportunities, is the weekend only Caribbean flying (also Florida flying). As a result of low Saturday load factors and yields in hub shorthaul markets, an entire week of positive revenue generation, flying a particular city pair or aircraft routing, can be erased on Saturday alone. This scenario is driving US Airways management to deploy mainline aircraft to weekend only Caribbean/Florida routings, which results in the airframe producing revenue, when historically it was losing considerable revenue in lower LF, lower yielding Saturday hub short-haul markets.
Some significant Caribbean stats include:
Between 4th Quarter 2003 and 1st Quarter 2004 (3 months), the Caribbean market saw 26% growth, from 261 weekly roundtrips to 328.
Weekdays will grow from 33 to 41 roundtrips, while Saturdays will grow from 55 to 74 roundtrips. Note that we nearly double weekday frequencies on Saturdays.
New daily services were added in BZE, CUN, CZM, MBJ, NAS, PUJ, SJO, SJU, and SXM.
In addition to these stations, new Saturday service was added to STT, SKB, PLS, LRM, GCM, AUA, and ANU.
BOS will have 21 weekly round trips, including 7 on Saturday, while LGA will have 10, including 4 on Saturday.
The beginnings of a PHL evening bank to the Caribbean (with connectivity to/from Europe) has begun, with daily 1800 EST departures to SJU and CUN, and Saturday only departures to PUJ.
1st Quarter 2004 verses 1st Quarter 2003, year-over-year, roundtrips are up 37%, from 240 to 328.
By June, Caribbean frequency will be up 45% year-over-year, with 371 weekly roundtrips (47 weekday, 81 Saturday).
We will become the largest carrier to BDA, with 8 gateways (including new MCO/BDA service).
February 25, 2004 we announced increased LGA-Caribbean frequency, effective June 2004 to AUA, STT, and SJU #2.
Also, by the end of February 2004, we will file for US Gov’t authority in FLL/CUN, with the expectation that we will fly it this summer.
An additional significant statistic is with 35% more Caribbean capacity in April 2004 year-over-year, our booked load factor is approximately 5 load factor points ahead of last year, therefore, the Caribbean is clearly a sweet spot that the company continues to exploit. This has not gone unnoticed as the other airlines (AMR, DAL, CAL, UAL, and Spirit) are attempting to keep pace with our Caribbean growth.
Domestic
Highlights:
Saturday flying: Added 5 Saturday point-to-point Florida roundtrips in February (MCO/ALB, BDL, BUF, PVD, and SYR). To date, they have run 90% full, with solid bookings going forward.
To be announced in early March the addition of 5 new Saturday Florida markets, effective June 04: MCO/BWI, CMH, MDT, RDU; and FLL /PVD.
The PHL/Southwest route response was filed in mid February, consisting of additional flights in PHL/ORD (+2 flights to 8), MCO (+1 to 10), PHX (+1 to 4), PVD (+2 to 7), and LAS (+1 to 6).
Mainline Equipment Downgrades
5 mainline aircraft were downgraded to Small Jets in 1st Quarter 2004 to fund mainline Caribbean flying (PHL 3 aircraft, PIT 1, CLT 1).
The emphasis remains on PHL downgrades in the short term, as much of PIT and CLT are already downgraded.
The company looked at Nov 2003 year-over-year market downgrades, and found that load factor (LF) improved 24 pts, from 47% on mainline to 71% on Small Jets.
For the remainder of 2004, the company expects to downgrade an additional 7 aircraft, primarily in 2-3 specific medium-haul markets (including CLT/SRQ, effective May 04).
As a result, Express Small Jet aircraft deployment in 2004 will focus on:
Turbo-prop upgrades (54% of SJ allocations),
New frequencies in existing markets (33% of SJ allocations).
Mainline downgrades will make up only 8% of SJ allocations for the remainder of 2004.
Summary of Route Discussion
In closing, US Airways continues to diversify its route portfolio. An overview shows:
International ASM’s will make up 27% of all mainline ASM’s in 1st Quarter 2004, rising to 29% of mainline ASM’s in Summer 2004, and
Compared to 1st Quarter 2001, Summer 2004 International ASM’s are up over 12% points, nearly doubling from 16.6% of mainline to 29% (Transatlantic 18%, Caribbean 11%), and
Saturday flying, both hub and point-to-point, exploiting revenue opportunities in Caribbean and Florida markets is having a significant positive effect on the profit & loss equation, and
Small Jets are beginning to focus on upgrading the prop product and additional frequencies to existing markets.
In 1st Quarter 2004 verses 1st Quarter 2001 (3 yr comparison), SJ ASM’s are up 141%, and the SJ as a percentage of Mainline have increased from 3% in 1st Quarter 2001 to 11% in 1st Quarter 2004.
The months to come may produce reportable events affecting fleet size and routes. Company plans (TBD) for a competitive response to SWA and other LCC’s, may have a measurable effect on our fleet and routes. I will keep the MEC advised as to any changes.
I have enjoyed serving the MEC as Route Committee Chairman for the past few quarters, and would like to continue to serve in this capacity for another term.
Respectively
submitted, XXXXXXX
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