Is time running out on DCA, LGA or BOS

[ClueByFour]

These inherent cost-savings allow them to compensate their employees at a higher rate of pay while also at the same time, allowing them to operate in their markets profitably (like BWI and PIT) when USAirways cannot.

Capisci?

Yeah, and what happened in California and BWI is going to continue to repeat itself. The only reason the demise has slowed is two bankruptcies. US Airways still can't compete.

Where do you suppose that "profitable" flying is that's not out of PIT? PHL? That dog will only hunt until LUV gets more gates. PHX? By Dougweiser's standards, they should close up shop--it's not making money.

LGA and DCA? This is actually a probability--US likes markets with artificial barriers to entry so that they don't actually have to compete.

BOS? Do you think it's a coincidence that US has been pulling that down ever since B6 came to town?

The little eastern seaboard markets? DL has now artificially slaughtered their costs in BK.

Dougweiser and Scotch can continue to reshuffle and shrink the fleet. Absent another bankruptcy, that strategy will fail eventually.

 

[SKY HIGH]

Yeah, and what happened in California and BWI is going to continue to repeat itself. The only reason the demise has slowed is two bankruptcies. US Airways still can't compete.

Where do you suppose that "profitable" flying is that's not out of PIT? PHL? That dog will only hunt until LUV gets more gates. PHX? By Dougweiser's standards, they should close up shop--it's not making money.

LGA and DCA? This is actually a probability--US likes markets with artificial barriers to entry so that they don't actually have to compete.

BOS? Do you think it's a coincidence that US has been pulling that down ever since B6 came to town?

The little eastern seaboard markets? DL has now artificially slaughtered their costs in BK.

Dougweiser and Scotch can continue to reshuffle and shrink the fleet. Absent another bankruptcy, that strategy will fail eventually.

sky high states: Thoughtful post. Clue. Sheesh, I never thought I'd HOPE for another MERGER.



only stating opinions

 

[JAMAKE1]

Yeah, and what happened in California and BWI is going to continue to repeat itself. The only reason the demise has slowed is two bankruptcies. US Airways still can't compete.

I don't entirely agree with you here, Clue. USAirways has achieved lower costs and somewhat better operating efficiencies and while they may not be able to compete on a point-to-point basis with Southwest, they CAN compete and remain in the market provided there are customers connecting to higher revenue flights (such as transatlantic) as well as significant O&D numbers. PIT lacks these two important variables.

LGA and DCA? This is actually a probability--US likes markets with artificial barriers to entry so that they don't actually have to compete.

Point well taken...But this is not unique to USAirways...so does AA, CO, DL, NW, and UA.

The little eastern seaboard markets? DL has now artificially slaughtered their costs in BK.

And so has USAirways.

I know it's not what people want to hear, but it makes sense to reduce the flying and close the bases in PIT, from a business standpoint. Remember, the demise of PIT has been a work-in-progress through at least three different management regimes at US. Tempe is just putting the final nail in the coffin. Strategically speaking, it is not cost-effective to have two hubs within such close geographical proximity to one another. Other than nice connecting facilities, PIT has little else going for it to make it an economically viable hub. I'm just being honest. As I've mentioned before, every network carrier has re-allocated their resources to their market strengths (read: to hubs that are CASH COWS). Over the course of the past few years, UA has left MIA; DL has left DFW; AA has left SJC. US leaving PIT is no different, other than the fact that there is a great deal of sentimental value and Allegheny Airlines legacy attached it. Unfortunately, such sentiment doesn't add to a company's bottom line...

 

[ClueByFour]

I don't entirely agree with you here, Clue. USAirways has achieved lower costs and somewhat better operating efficiencies and while they may not be able to compete on a point-to-point basis with Southwest, they CAN compete and remain in the market provided there are customers connecting to higher revenue flights (such as transatlantic) as well as significant O&D numbers. PIT lacks these two important variables.

That's a bit confused, no? If customers are connecting to higher revenue flights, O&D is not particularly germane. If 8 million a year is not significant O&D, can you explain how CO makes CLE work (with Southwest) and DL makes CVG work?

And let's also remember that "achieving lower unit costs" is a very kind way of putting "abusing bankruptcy." There are three bankruptcies between the pieces that are the current US Airways. Neither management has shown the ability to survive in a competitive environment with LCCs without employing bankruptcy as a business tactic. This has been used in all three to extract concessions from employees and beat lease/paper/bondholers. These will not be possible again--the revamped laws make it too difficult. So what happens when CASM rises?

Point well taken...But this is not unique to USAirways...so does AA, CO, DL, NW, and UA.

"They are coming to kill us." How many hubs and/or "focus cities" have AA, CO, DL, NW, and UA closed due to LCC pressure?

And so has USAirways.

Look, the point here is that it's not PIT that's the problem. It's US Airways. If you read the internal propaganda, you have to know that the Sandcastle will admit "it's all about the LCCs lowering fares," or some variation on that theme (O&D traffic at PIT has dramatically increased during the downsizing, so that dog won't hunt). US can leave PIT, but after a fashion it's going to run out of places to run. Southwest, Jetblue, Airtran, et all are taking aircraft which will work their way into smaller and smaller markets. At some point, tempe will run out of places to run and planes to park (which is the basic strategy at this point--coupled with the bankruptcies, of course).

CLT is next. If I'm Gary Kelly and I want to do what Herb did in the 90s, that's where I'd go.

PIT will end up looking like BNA and RDU (minus the LGW flight). That's not a bad thing.

 

[JAMAKE1]

That's a bit confused, no? If customers are connecting to higher revenue flights, O&D is not particularly germane. If 8 million a year is not significant O&D, can you explain how CO makes CLE work (with Southwest) and DL makes CVG work?

Delta has significantly reduced CVG flying. With the exception of a few transcons and perhaps a tranatlantic route or two, the hub has been reduced to DL Connection flying. I wouldn't be so quick to infer that DL is making CVG "work." As for CLE, same thing: Since 9/11, CO has turned most of it into Express flying. (Again, with the exception of some westcoast transcons and a LGW route that has traditionally operated seasonally). Only recently has CO announced a build-up in CLE in order to reduce some of the operational nightmares that have plagued its EWR operations in recent months. I wouldn't qualify either of these hubs as being entirely successful.

"They are coming to kill us." How many hubs and/or "focus cities" have AA, CO, DL, NW, and UA closed due to LCC pressure?

Well let's see:

AA has reduced its focus city at BOS and continues to pull down its operations there ever since Jet Blue entered the BOS market.

During the mid 1990's, UA had a sizable operation across the bay in OAK, with flights to PDX, SEA, LAX, SAN, ONT. They retreated across the bay back to SFO. The only westcoast market that has remained out of OAK is LAX, due to the size of UA's large hub operation there.

DL: Song has been pulled down and its MCO operations have been drastically reduced with Jet Blue's and SWA's market penetration there.

AA has nearly abandoned SJC, having retreated from nearly all of its west coast markets inherited from Reno Air because they cannot compete with SWA. A select few AA Eagle flights remain in the LAX-SJC and SNA-SJC markets. AA scrubbed its SJC-JFK and SJC-BOS flights the minute Jet Blue entered the market.

 

[BoeingBoy]

Delta has significantly reduced CVG flying. With the exception of a few transcons and perhaps a tranatlantic route or two, the hub has been reduced to DL Connection flying. I wouldn't be so quick to infer that DL is making CVG "work."

You might want to check that ........

DL mainline service from CVG:

ABQ, ATL, BWI, BOS, ORD, CMH, DEN, FLL, RSW, BDL, LAS, LAX, MIA, LGA, JFK, SNA, MCO, PHL, PHX, PDX, SLC, SAN, SFO, SEA, TPA, DCA,

CUN, PTY, SJU

FRA, LGW, CDG, FCO

Jim

 

[JAMAKE1]

Just before Delta went into Bankruptcy, they had announced that the CVG hub was being reduced from nearly 130 daily departures to less than 95. They've reduced the hub by 26% during the past 2 years...

 

[BoeingBoy]

They've reduced the hub by 26% during the past 2 years...

It's still considered a major hub - by the BTS, no less. Now, how does that compare to the US reductions at PIT? Isn't just this latest announcement a reduction of mainline flights by 29% and total flights by 37%?

Also, the East 2/3 of the airline still has the highest costs of any network carrier despite two trips thru BK. Even averaging in the West 1/3, the problem is competing with the other network carriers. Forget about competing with WN, point-to-point or not, since US' CASM is about 50% higher (or 100% if stage length adjusted).

Jim

 

[FlyUs]

Yeah, and what happened in California and BWI is going to continue to repeat itself. The only reason the demise has slowed is two bankruptcies. US Airways still can't compete.

Where do you suppose that "profitable" flying is that's not out of PIT? PHL? That dog will only hunt until LUV gets more gates. PHX? By Dougweiser's standards, they should close up shop--it's not making money.

LGA and DCA? This is actually a probability--US likes markets with artificial barriers to entry so that they don't actually have to compete.

BOS? Do you think it's a coincidence that US has been pulling that down ever since B6 came to town?

The little eastern seaboard markets? DL has now artificially slaughtered their costs in BK.

Dougweiser and Scotch can continue to reshuffle and shrink the fleet. Absent another bankruptcy, that strategy will fail eventually.

Boston hasn't been pulling down ever since. When Metro Jet was discontinued after 911, all non stop flights to Florida were not restored to mainline. That's about it. Service to the Caribbean have increased as well as flights to PHX and LAS because of the merger.

 

[Be Careful What You Wish For.]

It's still considered a major hub - by the BTS, no less. Now, how does that compare to the US reductions at PIT? Isn't just this latest announcement a reduction of mainline flights by 29% and total flights by 37%?

Also, the East 2/3 of the airline still has the highest costs of any network carrier despite two trips thru BK. Even averaging in the West 1/3, the problem is competing with the other network carriers. Forget about competing with WN, point-to-point or not, since US' CASM is about 50% higher (or 100% if stage length adjusted).

Jim

I'm still trying to wrap my mind around these numbers. Why is this after 2 BKs????

So, the east is no better shape in regards to our competition than we were before?

 

[LGA / 037]

Outside of PHL which is a bleeding ca$hcow , BOS,LGA&DCA are the next biggest moneymakers! Together, they make more money then PHL 10 fold! CLT , with their current and future growth, along with the west coast structure, which obviously the old Airways never could structure, if Airways fixes Philly which noticably has come ALONG WAY, This airline, under the new direction of Isom goes back to the old school way of accountability, and hopefully will get this airline back on track to even more profits grow even further!

 

[LGA / 037]

Outside of PHL which is a bleeding ca$hcow , BOS,LGA&DCA are the next biggest moneymakers! Together, they make more money then PHL 10 fold! CLT , with their current and future growth, along with the west coast structure, which obviously the old Airways never could structure, if Airways fixes Philly which noticably has come ALONG WAY, This airline, under the new direction of Isom goes back to the old school way of accountability, and hopefully will get this airline back on track to even more profits grow even further!

 

[LGA / 037]

Outside of PHL which is a bleeding ca$hcow , BOS,LGA&DCA are the next biggest moneymakers! Together, they make more money then PHL 10 fold! CLT , with their current and future growth, along with the west coast structure, which obviously the old Airways never could structure, if Airways fixes Philly which noticably has come ALONG WAY, This airline, under the new direction of Isom goes back to the old school way of accountability, and hopefully will get this airline back on track to even more profits grow even further!

 

[BoeingBoy]

I'm still trying to wrap my mind around these numbers. Why is this after 2 BKs????

Primarily two reasons, although there's plenty of minor items hiding here and there.....

1 - fuel cost. See chart in this post.

2 - shrinkage. Lower expenses were achieved but ended up spread over much fewer ASM's, so CASM didn't go down as much as the decline in expenses would suggest.

So CASM wouldn't have gone down as much, in percentage terms, as expenses because of ASM reductions, and increasing fuel costs offset what CASM reduction there actually would have been.

Jim

 

[ClueByFour]

Boston hasn't been pulling down ever since. When Metro Jet was discontinued after 911, all non stop flights to Florida were not restored to mainline. That's about it. Service to the Caribbean have increased as well as flights to PHX and LAS because of the merger.

Upstate NY? Virtually gone. Florida? Gone. Lot of the nonstops to the midlevel markets in the southeast? Gone.

Not all of that was after 9/11. Some was before. Somewhere I have a late 1990s timetable--when I can dig it up I will report back on BOS then versus BOS now.