History could repeat itself

[speedbird86]

Just wondering what a year from now will look like for US. With all the employee concessions and fresh out of chapter 11, how long can US operate in the red until we''re right back to August of 2002?

Seems to me, and I''m no expert, just my 23 years talking here, but shouldn''t the boys and girls at the top be thinking about increasing revenues instead of reducing cost.

In simple terms....FIX THE FARES STUPID!!!!! Sorry about that....off on a tangent.

Seriously though, how long can we keep going till we run out of cash and have to borrow up to our eyeballs again?

 

[Dea Certe]

Speedbird,

I''m with you! Just how long does it take these "bright and talented" people to figure out a responsible way to fix our company?

What do our pax want? Rationalized fares! A website that works the way it should. How hard can that be to get that sorted out?

Why is there no advertizing? What is marketing doing, other than antagonizing our frequent flyers? I don''t believe the problems of the airline industry can be fixed by beancounters in cubicles. I think they are very ones who got us into this situation!

Labor has been bled white. It''s obvious we need a business plan that will work in todays environment. Is anyone working on it?

 

[USFlyer]

For what it''s worth, fares have been getting better in a number of markets. Granted, this may be due to competition, but I can honestly say I''ve been paying 40 percent less for last minute tickets over the past six months. What''s crazy about this is these trips were all required, regardless of cost, so US lost about $600/ticket by lowering the price. Go figure.

 

[WO/drone]

Can USAirways be profitable before the loan is paid back? What is the payment schedule? Profits are after costs, and the loan is a cost right?

 

[SalesGuyCCY]

Actually, management has a a very good business plan including lots of RJs, a code share with LH and then joining the Star Alliance. Advertising isn''t actually what its all about right now. Customers are price sensitive and being competitive is key, which US is.

 

[trvlr64]

PRICE COMPETITIVE !?! You obviously don't look at the price of a flight on US versus the same flight listed as UA on US metal. UA is typically a few hundred dollars cheaper than US. I even pointed this out to my corporate travel agent. I had to fly to DFW from PIT last week. On US it priced out over $900. On UA it was $650 (noncodeshare flights this trip). I have to book flights to DFW for the next 3 months and I am going to fly UA instead. The price I was quoted for my next 3 trips to DFW priced at $1200 on US, and that's with more than a 21 day advance ticket. If I stay the weekend, which forces me to stay 2 straight weeks in Dallas the ticket drops to $167. Amazing!? U would get more money out of me by pricing this logically. But instead I am going to stay in Dallas, no big deal I practically live there anyway, and U is only going to get a small amount of money out of me. How stupid.

The only area I have seen US be competitive is when they are trying to drive business away from another airline......oh like America West out of PIT now. US is matching the fares to the west coast until 2/2004. For under $200 hell yeah I will fly to the west coast MULITPLE times. And this greedy US1 will fly in first class for pittence. HA!

Dea.......look for this cockroach!!

 

[Singleflyer]

Wo Drone

Loan repayment is not a cost. It comes from profit. Only the interest payment on any loan is considered an expense (cost). This is the same for any equipment purchase, NOT a lease. Equipment, planes, ground equipment, computers, etc that are not leased, are purchase, and must come from profits. They are considered assets just like cash so the company is basically swapping one asset (cash) for another asset, a truck. I beleive most if not all of US planes are lease, so that large cash out flow is an expense.

Therefore when a company lists a large profit, it does not mean they have that amount of cash in the bank. The long and short of it is, Profit does not equal cash

 

[trvlr64]

Piney,

When I check the flights from PIT to DFW (which is weekly), USAirways prices out at over $1000. AA is about equal and UA and DL are much cheaper. So it is not airline related most of the time. So your example is not always true.

I fly to my headquarters in ROC often too. From PIT I can get there a hell of a lot cheaper on UA or DL than US. And since my last altercation at ROC with TSA and a US gate agent I will no longer fly there. It takes me 5 hours to drive there and flying through CVG or IAD takes as long or longer.

I have found that US is not always price competitive to some of the destinations I need to travel to. Maybe your experiences are different. And I''m happy for you.

 

[USFlyer]

One thing to keep in mind is we are not sure how US takes into account corporate contracts when setting inventory and prices. If US has dozens of corporate contracts in a specific city, fares on its web site and thru other outlets may in fact be higher to offset the discounts given to high volume customers. We receive a discount in excess of 30 percent on all fare classes "above" M, which 95 percent of the time makes US the lowest carrier out of DCA. Given how many other contracts US probably has in the DC area, US can afford (so to speak) to be less cost competitive with other carriers in markets out of DCA.

 

[WO/drone]

Singleflyer

I agree with the cost/expense view, what I am getting at is pure profit. Not "book cooking", you know, we don''t make as much this year as last so it is a loss? For years Airways bouhgt planes then resold them to a leasing company to build cash, and recently most are straight leases. My point is cash out vs. cash in, when in the great plan is Airways into positive cash flow? Anyone know? Ideas? Thanks Singleflyer.