Final Union Faces Deadline

[BoeingBoy]

You're looking at historical data? Given the recent entry into service of the E170 and the delay in production of Form 41, I suspect you're seeing data that reflects ramp up costs. Which isn't to say that you're wrong, just that you may be wrong to rely on the Form 41 data released thus far.

[post="230173"][/post]​

You're right, I'm using 3rd quarter data which is the latest available from BTS. Presumably there is still some "ramp up" affect, although less than the 2nd quarter where the Emb-170 data was somewhat "off the chart".

Since deliveries stopped abruptly late in the 3rd quarter, the crew staffing level is high compared to mainline, which affects the personnel cost per flight hour (the Emb-170 is the highest we have on a per seat hour basis).

One oddity is that the daily utilization of the Emb-170 actually went down from the 2nd quarter to the 3rd. It had the lowest utilization of any aircraft type, which obviously affects things like "ownership" cost per hour (and per seat hour).

Still, there are things like fuel that aren't subject to any "ramp up" effect. There the Emb-170 is higher per seat hour than all but the 767 and over $1 higher than the 737's.

The only area where the Emb-170 enjoys an advantage on a per seat hour basis is maintenance, but even there it is not the lowest - the A320 series is.

Jim

 

[Rico]

Jim....

I guess we will never see eye to eye on this issue. I concede that a ERJ-170 will not match a B737 or a A319 on a seat cost basis, that is not the point.

The point is that the end result of revenue produced, subtracted from the costs = profit made is what matters. It is in this case that the ERJ-170 and the larger ERJ-190's can shine because flying full, or nearly so all of the time, the profit produced by these aircraft is what is making them attractive.

Certain markets frequencies favor larger aircraft, yet in return other market frequencies favor smaller aircraft as well. The 737 does not make as much profit on a given flight when it is half full, does it...?

I know your main compalint is the replacement of larger aircraft by these smaller ones, yet if a ERJ-170 can make a consistant profit where a larger mainline aircraft may or may not, it makes sense to use THAT aircraft in place of the larger one, no...?

The few ERJ-170's that we have are not fufilling a "replacement" function so much anymore... Look to the growth in DCA using commuter slots, rather than the replacement of PIT mainline flying that originally was the plan. Look to the growth in PHL in F terminal, while Mainline increases flying at the A, B, C, and D gates.

The downsize of the mainline fleet is more associated with making better use of fewer aircraft, rather than a massive transfer of flying to smaller aircraft. Right now, as CAL did in the 90's, we need to only fly that which is profitable on a consistant basis, rather than what is profitable sometimes and not so profitable at others.


The point is to build something that is profitable into the future, and the majority of the cost associated with bring the EMB-170/190's on has already been spent. From here on out it is time to reap the benifits of this investment, and additioanl aircraft spread unit costs out even further.

Costs matter, but only in terms of the equation (revenue - costs = profit). High fuel costs and competitive advantages add to the overall "big picture" that needs to be taken into account with these new aircraft too.

Doubt I will ever get you to agree completely with me, but over time when the aricraft has had a chance to prove itself operationally and financially we might see eye to eye better.

Peace

 

[BoeingBoy]

Rico,

I think we can agree on this much - smaller planes (call them RJ's or whatever you want) have a place in a network airline's system. I've never said differently.

Just like you wouldn't want a 330 on every route every day, you don't want a 737 or little Bus either. Sometimes bigger airplanes make sense, sometimes smaller airplanes make sense. Obviously, the ideal would be to have a fleet such that no matter what the number of passengers on a segment you could roll out the airplane that just matched, resulting in 100% load factors on every flight. Unfortunately, that fleet doesn't exist and no airline could afford it if it did.

You say the RJ's aren't replacing mainline, but mainline is shrinking (just like the last BK) while the number of RJ's is expected to grow (just like the last BK). You can call that whatever you like, but the fact is that the mainline employees are being beaten over the head with the "competitive cost structure" hammer and adding higher unit cost airplanes (not at mainline) while subtracting lower unit cost airplanes (from mainline) does nothing but make more concessions necessary - but maybe that's the point.

And by the way, looking at the latest BTS numbers for the Emb-170 passenger loads, seems there are plenty of routes where an even smaller plane would make your revenue-costs=profit formula look better. Could it be that we have too many 170's already?

Jim

 

[High Iron]

BoeingBoy spake: ( in bold text )

You say the RJ's aren't replacing mainline, but mainline is shrinking (just like the last BK) while the number of RJ's is expected to grow (just like the last BK). You can call that whatever you like, but the fact is that the mainline employees are being beaten over the head with the "competitive cost structure" hammer and adding higher unit cost airplanes (not at mainline) while subtracting lower unit cost airplanes (from mainline)......

Yes, you've nailed it...squarely. Just connecting the dots of recent history bears this out.


.....does nothing but make more concessions necessary - but maybe that's the point.

Maybe it really is the point. I wouldn't call it a conspiracy as much as a simple "cause and effect" tactic.

"Just because I'm paranoid doesn't mean they're not out to get me"

 

[Winglet]

Never assign conspiracy to things that are easily explained by incompetence.

Personally I don't think the U management team is smart enough to cook up a conspiracy. They're just plain dumb.

 

[USA320Pilot]

Is is my understanding the EMB-170 has a breakeven load factor of 50%.

Regards,

USA320Pilot

 

[BoeingBoy]

There's no such thing as a set breakeven LF - it all depends on the segment unit cost vs the average segment yield. An fleet average breakeven LF depends on average CASM vs average yield.

At the extremes, a high enough average yield will yield breakeven with one paying passenger or a low enough average yield will yield breakeven over 100%.

Jim

 

[BoeingBoy]

Rico,

Just for you I dug into the Form 41 data for September (domestic only is available) to get load factors. Seems that the Emb-170 averaged 56.8% for the month with a high of 97.2% for 3 flights - one each PWM-DCA, BNA-IAD, and IAD-DCA (what was that one about - a "flag stop" on the from BNA?) and a low of 2.8% for one flight DCA-MHT (did the 2 pax know each other?).

For comparison, that's the next to lowest average load factor of specific model in the fleet, just beating out the 737-300 by 1.5%. However, you'll be glad to know that if you look at type instead of model, the Emb-170 takes honors for having the lowest load factor.

I know, if a bigger plane had been on many of those routes, the losses would have been higher. But if a smaller plane had been on them, the loses would have been less, too.

[Edit by me]
Just to be sure, this is domestic only. The 737 and Emb-170 are covered (unless the 170 goes to Canada), but the rest of the fleet types that do at least some international flying don't have complete data.

Jim

 

[N924PS]

I have been there and done that and will continue, I even have the T-Shirt to prove it!

[post="230039"][/post]​

Were the IAM'ers at Eastern wearing those when they ceased opertions?

 

[High Iron]

Were the IAM'ers at Eastern wearing those when they ceased opertions?

[post="230306"][/post]​

Are you suggesting EAL would still be around today ( especially as an employer to said group ) if they gave concessions again?

 

[USA320Pilot]

Bruce Ashby briefed the MEC that the EMB-170 had about a 50% break even load factor.

Regards,

USA320Pilot

 

[BoeingBoy]

It all depends on the assumed yield. Bruce can assume a yield to make the breakeven load factor any number he wants. Doesn't make it so, however.

To get a 50% breakeven load factor, yields would have to be at least 50% higher than mainline - possible I guess, but probably unlikely. If one assumes that yield is about the same as mainline, the breakeven load factor would be higher than mainline - other things being equal, the higher unit cost plane has the higher breakeven load factor.

Jim