Earnings

[FrugalFlyerv2.0]

You seem to think you know it all...and boy are you showing Piney Bob how silly he is, US with their loss while CO made money. But the simple fact is FrugalFlyerv2.0, YOU ARE WRONG!!!

FFers and VFFers HAVE left the airline....while they may not be able to be gone physically, their pocket books left long ago.

And for the US folk out there....I read the entire "About US" for January 24....I'm afraid management STILL doesn't get it. They are still stuck to this "if we land on time with luggage, we're reliable and people will chose to book us." That's just wrong....just like I don't expect to get in an airplane crash when I board and airplane..when I buy a ticket, I expect to arrive with my bags, thats actually part of the CofC.

The real difference is the overall way in which a passenger is managed and the quality of the product itself.

From disgusting, unkept airplanes (which are a little cleaner but have a ways to go) to a completely stupid fare structure, all the way to plastic party tumblers...."Business Casual" is not a product I will ever bond to in it's current existence.

Van, PB, etc. - all y'all need to relax a little bit.
I'm not disagreeing about the fact that US is an operational mess, the quality of other airlines business class products & service, etc. I'm of the opinion, that Tempe does not care about elite frequent flyers whatsoever. FFOCUS et al. are irrevelant in the decisions that Tempe makes. PB is lying to himself and others by stating otherwise. As far as I'm concerned, US has not made any significant moves to lure back or to cater to the elite frequent flyers. As a matter of fact one could argue that they're doing the opposite - attracting more lower customers who hunt for the super low fares and hoping to make up the difference in volume - and it seems to be working - for now.

 

[vantheman63]

Van, PB, etc. - all y'all need to relax a little bit.
I'm not disagreeing about the fact that US is an operational mess, the quality of other airlines business class products & service, etc. I'm of the opinion, that Tempe does not care about elite frequent flyers whatsoever. FFOCUS et al. are irrevelant in the decisions that Tempe makes. PB is lying to himself and others by stating otherwise. As far as I'm concerned, US has not made any significant moves to lure back or to cater to the elite frequent flyers. As a matter of fact one could argue that they're doing the opposite - attracting more lower customers who hunt for the super low fares and hoping to make up the difference in volume - and it seems to be working - for now.

I agree with, for the most part, what you are saying here. Good points.

I do think they have tried, a little bit...by trying to get better food catered in F, upgraded BoB boxes, etc. I do believe you are right, they don't listen to ANYONE...not just FFOCUS, they listen to NO ONE. I've never seen arrogance defined and demonstrated the way they have. Heck, I've spent LOTS of money on this airline and it's product for years (until the last year or so) and sent them receipts, gripes, applause, etc....they don't care.

The only time they have EVER responded with any sort of response was after I sent pics in of how shabby the CLT club looked with all the ripped and soiled chairs....someone from management with the initials EE replied, "we're trying to get this under control." Curiously, I saw ripped, soiled chairs at the DCA club....last week.

Anyway....

As for PBs prediction that FFers will leave in droves, he's right. I believe FFers have left..there are WAY too many people I know who buy a ticket on US "only when it's absolutely necessary" for me to believe otherwise. Their yields are down....their costs are up....it's not a good scenario.

But I think you make an excellent point as well....."they don't give a rat's behind." Sadly.

For my part....I'm over the anger with US for rippiing me off the past year or few months. I know now where the product fits with me: "Buy rock bottom fares so there is no disappointment in a product that does not deliver." If I get upgrades, super. If not, oh well, I knew going in. And in fact, I've purposely asked to be "downgraded" a few times because the emergency exit row on some aircraft is better then F....the A321 comes to mind. That airplane, like the East B752s is a joke...exit row seating is better.

Thanks anyway...I'll book CO whenever I can.....

 

[BoeingBoy]

and it seems to be working - for now.

Or do the 4th quarter results indicate that their plan may not be working.....

As I said, the largest quarterly loss of the legacies with the possible exception of NW, who hasn't reported yet. According to the balance sheet, burned up about $500 million in "cash" (cash, cash equivalents, and short term investments) in the 4th quarter alone. Lower bookings than anticipated on the new European routes. The second lowest PRASM of the legacies reporting so far. Even WN reported a higher yield than US mainline - 13.64 cents vs 13.44 cents.

Jim

 

[gaucho99]

If what you say is true then explain why CO outperformed US in the ONLY category that really matters, PROFIT as in Q4 and full year?

The biggest reason is because CO has a much higher percentage of international flights which are performing better than domestic. US has the smallest percentage of international routes than any of the majors.

 

[autofixer]

Great...another round of mis-management for this airline. And the Westies wonder why we Easties are so negative. Just wait until the folks realize we are in a recession (I hope we are not). This low yeild leisure traffic will vaporize like the morning fog. All we can do is pay off our personal debt and save some cash and wait for the next shoe to kick us in the teeth. This is getting old. What is this, round 4 or 5?

 

[prechilill]

Great...another round of mis-management for this airline. And the Westies wonder why we Easties are so negative.

Well, I actually am wondering why you are so negative. I'm all ears...

 

[gaucho99]

Much higher?? As in how many flights? Let's see some numbers?

If CO had the same number of International Flights Year over Year and their profit performance still improved doesn't that fly in the face of US's increased International Flights and lesser Q4 & full year performance against CO?

Yield is below WN now by a few cents and that in my mind can't be good. Where did the East Coast and FF revenue premium that was bragged about in Newsletters past go? To Fargo, ND? Or a more logical conclusion would be to other carriers.

Looks to me like CO is kicking arse and taking names. As I stated before doesn't really matter HOW you made the profit it just matters how much you make. US made LESS period, spin in any way you like. 542 is MORE than 427.

Continental is performing better than US Airways. It is also performing better than just about all the Legacy carrirs. 542 is more than 427 but not a lot more, especially when you consider US is smaller and relies more on domestic flying. Also, high fuel prices affect US more than other carriers while low fuel prices benefit US more than other carriers. This is because the cost of fuel is a higher percentage of the total costs for US than other airlines. Below are a few quotes that may interest you.


We continued to grow our revenue at almost twice the rate that we grew our capacity," said Jeff Smisek, Continental's president, in a statement. "While the domestic system suffers from yield pressure, the international system is performing superbly, and rewards us for our decade-long focus on international expansion."

International operations now made up 47% of Continental's total revenues, up from 22% a decade ago, and this would increase further, Summerford said.

US Airways, though, suffered more fundamental problems. International flights – the biggest moneymakers and the industry's future – account for only 20 percent of US Airways' business

 

[legacy-to-LCC]

Continental is performing better than US Airways. It is also performing better than just about all the Legacy carrirs. 542 is more than 427 but not a lot more, especially when you consider US is smaller and relies more on domestic flying. Also, high fuel prices affect US more than other carriers while low fuel prices benefit US more than other carriers. This is because the cost of fuel is a higher percentage of the total costs for US than other airlines. Below are a few quotes that may interest you.


We continued to grow our revenue at almost twice the rate that we grew our capacity," said Jeff Smisek, Continental's president, in a statement. "While the domestic system suffers from yield pressure, the international system is performing superbly, and rewards us for our decade-long focus on international expansion."

International operations now made up 47% of Continental's total revenues, up from 22% a decade ago, and this would increase further, Summerford said.

US Airways, though, suffered more fundamental problems. International flights – the biggest moneymakers and the industry's future – account for only 20 percent of US Airways' business

thanks for the primer on contemporary airline economics--it was swoosh-a-licious!!

the reason continental is successful is because: they have talented leadership. swoosh does not.
they care about their employees. swoosh does not.
they make impressive investments in ammenities for their most valued customers. swoosh does not.

with that kind of core, the rest is really semantics...

 

[700UW]

And remember too CO still offers free food in coach.

 

[FWAAA]

And remember too CO still offers free food in coach.

Good point. CO offers free food in coach and one of the industry's best business class products, and clearly has a better 4th quarter than US.

UA has a better quarter than US as well. What does UA offer? Economy Plus for those stuck in coach and, for those up front, a better F and J product than anything offered by LCC.

Something ain't working all that well for Parker & Co.

Continuing the beatings until morale improves might work against the employees since so many of them are glued to their employer by the seniority system. But I don't think it's as effective against the Higher-Yielding business passengers. Sure, frequent flyer miles and status can account for some inertia, but that inertia can be overcome rather easily. Starting over at the bottom as a frequent flyer is nothing like starting out at the bottom as an employee.

 

[Singleflyer]

maybe it revenue management.

My sister purchased a ticket to PHX for the superbowl @260.00 RT plus fees.

dp PVD sat AM to DCA - PHX

Dp PHX Wed AM to CLT to PVD.

Why would they sell a ticket below break-even to P{HX for the superbowl. MY brother in law purchased 3 tickets two weeks ago (with antisipation of NE winning) for less than $200.00 each.

Just plain stupid.

Don't gouge but at least Break-even for the super bowl.

 

[back2CLT]

Pfffww....PVD...that's in RHODE ISLAND....everyone knows Rhode Island isn't near, wait, Patriots play near Boston, right? Boston....oh yeah, that's in Massachusetts....Rhode Island isn't anywhere near....wait, someone get out the map.....ahhh crap, we fcuked up again......did we at least gouge at LGA? we didn't? ah crap.....memos to everyone.....1st weekend of February next year, triple all fares to Phoenix...what? It won't be in Phoenix next year? ahhhh crap...lousy NFL.

Editted to add follow up conversation....

Do we at least have a Patriots or Giants paint scheme? You're kidding me....well, at least the Steelers made the playoffs....oh right, I forgot, we've scheduled that one to get repainted....our customer are going to LOVE our new NASCAR paint schemes.

 

[gaucho99]

Let's look at margins via simple divison.

US Annual Profit $427 divided by $11.7 Billion in Annual Sales = a profit margin of 3.649%

CO Annual Profit $542 divided by 13.5 Billion in Annual Sales = a profit margin of 4.01%

Seeems like no matter how you slice, dice, mince, parse the numbers US still come up on the short end of the stick.

Your figures do better to support my position. US finishes the year with a profit margin a fraction below the best airline in the country. An airline that has a big advantage internationally that has come out and said that the international flying is where they are making their money. That their domestic flying is suffering from poor yields and losing money. Yet, US which is mostly a domestic carrier, battling the same low yields, only to a much greater extent, finishes just slightly below this great carrier. And this with all the problems we had this year with the reservation fiasco, poor ops etc. We are now at or near the top of on time performance.....we will be either 1 or 2 for December and a lot of the other headaches are going away. it will be interesting to see how we fare in 08 compared to the industry as a whole.

You and others have proposed US is a train wreck of major proportions. Sorry, but train wrecks of major proortions do not fare this well.

 

[signals]

How do these profits and losses compare to other years? A difficulty is factoring in fuel costs from then and now.

Just like Retail stores start Christmas sometime in October, when does airline Holiday Travel begin? Does it seem to begin earlier? Maybe once it started just before Thanksgiving, and now it gets estimated at around early November. Numbers are deceiving and figures can be 'dolled up/down' to suit one's bottom line.

Do the losses include lawsuits? Do the figures include the results of boycotts? LCC claimed it would lose profits during the Holiday travel. I didn't see it in my area as we were just as busy as any other year.

You can look at Continental and say how great they are. How they have all these foreign routes that now seem to be the way of the future.

It don't mean a thing unless your airline lays the 'golden egg!' What's the egg? Non-stop Miami-Mecca is my guess. h34r:

 

[BoeingBoy]

Also, high fuel prices affect US more than other carriers while low fuel prices benefit US more than other carriers.

I let the international excuse slide, but this one was too much.....

You do know that CO paid nearly 33 cents per gallon more for fuel than US in the 4th quarter, don't you? If they'd had US' fuel cost their 4th quarter profit would have been nearly $130 million higher. Conversely, if US' fuel costs had been the same as CO, US' loss would have been about $95 million greater.

Jim