AANOTOK
Veteran
- Oct 10, 2009
- 4,627
- 2,242
Would that even be a question?
Merger News
- Thread starter chellow
- Start date
Many of the US flights are seasonal to low-yielding secondary destinations like Athens, Greece; Lisbon, Portugal; Venice, Italy; many of which are operated with 757s. Great for US to chase after the low yielding leisure travelers traveling to PIGS while AA on the other hand flies to fewer cities but with more frequencies to higher yielding business centers like London Heathrow while US only has a single flight to LHR (soon to be two). AA flies to places people actually want to go, from major markets and for the most part with suitable aircraft.
And US is not part of the AC/LH/UA joint business venture like AA has with BA & IB, so US has to serve more of these markets directly.
Josh
You are correct, people from NY don't travel to PHL for a flight but many from PHL travel to NY for international flights. There is no comparison in the number of international carriers,destinations and flights that are available from NY as opposed to PHL.
I think PHL will be drawn down a bit as the airport is maxed out and no room to grow.
- Banned
- #19
The majority of flights are on 767s and A330s.
UA uses more 757s to Europe than any other carrier.
And US makes a nice profit on the flights to Europe and earns more RASM than a lot of carriers to Europe.
When the US pilots and FAs are willing to work for hundreds of millions of dollars less each year than UA, DL or AA wages, the profits aren't a major accomplishment.
According to the airliners.net chart you recently posted showing the 3Q2012 international numbers, US had the lowest TATL yields among UA, DL, AA and US:
http://www.airliners.net/aviation-forums/general_aviation/read.main/5668991/
A low-wage airline with low yields. Aren't the low revenues from the US hubs the excuse that Parker has used to justify the low wages all these years? And now he's promised everyone big raises at US and AA. I'll bet those raises make the highly profitable PHL hub even more profitable.
- Banned
- #22
Willing?
Guess you forgot the fact that the pilots havent been able to get a new CBA because of their internal union dispute.
The FAs have voted down two TAs.
Guess you dont realize if the company wont step up to the plate and offer something that the groups would accept and the refusal of the NMB to release the parties, that isnt either unions fault nor their members.
Last time I checked 20% yield is a larger percentage than the other airlines.
Atlantic
AA - 16.16 - 15.93 - 13.77 - 1.4%
DL - 14.78 - 12.93 - 14.07 - 14.3%
UA - 15.53 - 13.75- 14.41 - 12.9%
US - 16.07 - 13.39 - 13.26 - 20.0%
Perhaps a few of them, but the current schedule shows a dozen flights a day LGA-PHL between 0600 and 2000, mostly on CRJs with a couple of Dashes thrown in the mix.
Are you that obtuse? The third column from the left shows the yield in cents, the forth column is the margin expressed as a percentage. Do you not know how to read a chart and interpret data? And you served on a negotiating committee?
Josh
- Banned
- #25
Guess you cant read that a 20% yield is a higher percentage than the other airlines.
I was not talking actually money, but the percentage of yield.
And you call yourself a banker?
No wonder why the financial industry had a meltdown and the US had to bail them out.
I was not talking actually money, but the percentage of yield.
And you call yourself a banker?
No wonder why the financial industry had a meltdown and the US had to bail them out.
No, your Arrogancy, I didn't forget anything and I do realize why the employees are paid significantly less.
The plane fact is, were it not for the substandard wages accepted every day by the low-wage US employees, there's likely be no profits at all.
No, the yield is the 13.26 cents per mile number - representing the lowest average TATL fares in the industry. The margin of 20% is big, due to the very low wages at US. Wonder what that margin will be with the new higher wages at US and AA? I doubt PHL or CLT will be as profitable as they currently are with the very low wages paid by Parker.
- Banned
- #27
http://web.mit.edu/a...E PERSONNEL.htm
US had higher mtc employee costs than AA in and DL in 2011
And higher ramp costs at US
http://web.mit.edu/a...G PERSONNEL.htm
Higher FA costs than DL
http://web.mit.edu/a...T PERSONNEL.htm
Higher widebody costs than AA and UA
http://web.mit.edu/a...Y EQUIPMENT.htm
Really good data here: http://web.mit.edu/a...mpensation.html
So how can this be? lol
US had higher mtc employee costs than AA in and DL in 2011
And higher ramp costs at US
http://web.mit.edu/a...G PERSONNEL.htm
Higher FA costs than DL
http://web.mit.edu/a...T PERSONNEL.htm
Higher widebody costs than AA and UA
http://web.mit.edu/a...Y EQUIPMENT.htm
Really good data here: http://web.mit.edu/a...mpensation.html
So how can this be? lol
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #28
With a highly biased crowd in my audience, I'm not sure I'll be any more successful with data points than anyone else but DOT data clearly shows that US has higher average fares over the Atlantic than AA both when looking at the entire TATL systems of both airlines as well as a comparison of NYC vs. PHL.
The simple fact is that AA's TATL local market share from NYC is less than half of DL's and almost exactly half of UA's - ie DL has a higher percentage of the local NYC market to NYC than UA and both are at least twice as large as AA's share of the market.
Both DL and UA have higher average fares than AA from NYC.
Part of the reason for AA's lower average fares is distance; AA is very weak to continental Europe. The simple fact is that other carriers have come into LHR and they are obtaining average fares comparable to what AA is obtaining and they also have a presence in continental Europe which generates higher fares, again partly because of the greater distance.
It has been often said that AA's strategy is to focus on the biggest markets in the world and funnel traffic thru those cities by using partners in those regions. The problem is that other carriers have taken a much more holistic approach to developing their networks and serve not only the destinations AA serves, but a whole lot more as well.
Size matters in the airline industry and AA is at a disadvantage when competing against other carriers to Europe because those carriers have bigger networks.
Given that yields go down with distance but so do costs, it is very possible that a carrier can make more money flying further even though the yield is lower, but so are the costs.
Given that AA is half the size of DL and UA from NYC to Europe, it is very hard to think that AA can successfully compete in any market in which DL and UA also serve.
In fact, we see clearly that the markets where AA has the highest average fare premium to DL and UA from NYC are the longhaul markets to S. America - which are either limited access or where AA is so much larger than their peers that they can dominate the market.
I'm not sure why some people struggle so hard w/ understanding that the same principle -size -that gives AA an advantage to Latin America is also what puts it at a disadvantage to Europe as well as Asia.
AA is in a highly competitive situation with multiple international carriers and is #3 to its US peers but US is the dominant carrier from PHL.
AA and US' total size over the Atlantic is now very close to the same.
The notion that US only flies trash across the Atlantic is not accurate based on current data. Although they most certainly were a bottom feeder for many years, that is not current reality. Their increased profitability of late is driven precisely because they are obtaining decent quality traffic.
There is no doubt that US' low labor costs help their profitability - but US is not a bottom feeder to Europe in a macro sense.
As for your data, 700, it is good data... but remember that DL has added a number of new personnel while also aggressively offering early retirement programs to incentify more costly employees to leave. DL has hired well over 1000 FAs in the past couple years - better than 5% of their FA workforce. Those FAs that were hired make far less than the topped out FAs that left, bringing down average salary data.
The same principle has been used elsewhere at DL.
US' average salary data for many job categories is high because they have not lost near as many topped out employees - and a big part of the reason that has happened is because employees who have lost their pensions are much more reluctant to leave. DL has had far more success in getting employees to retire early because their pension benefits are frozen, not terminated, and DL's pensions allow benefits to begin as early as age 52.
Terminating pensions has the unintentional side effect of forcing workers to stay working longer to make up for the benefits they lost, which forces costs back up again.
But the data from MIT is indeed good.
The simple fact is that AA's TATL local market share from NYC is less than half of DL's and almost exactly half of UA's - ie DL has a higher percentage of the local NYC market to NYC than UA and both are at least twice as large as AA's share of the market.
Both DL and UA have higher average fares than AA from NYC.
Part of the reason for AA's lower average fares is distance; AA is very weak to continental Europe. The simple fact is that other carriers have come into LHR and they are obtaining average fares comparable to what AA is obtaining and they also have a presence in continental Europe which generates higher fares, again partly because of the greater distance.
It has been often said that AA's strategy is to focus on the biggest markets in the world and funnel traffic thru those cities by using partners in those regions. The problem is that other carriers have taken a much more holistic approach to developing their networks and serve not only the destinations AA serves, but a whole lot more as well.
Size matters in the airline industry and AA is at a disadvantage when competing against other carriers to Europe because those carriers have bigger networks.
Given that yields go down with distance but so do costs, it is very possible that a carrier can make more money flying further even though the yield is lower, but so are the costs.
Given that AA is half the size of DL and UA from NYC to Europe, it is very hard to think that AA can successfully compete in any market in which DL and UA also serve.
In fact, we see clearly that the markets where AA has the highest average fare premium to DL and UA from NYC are the longhaul markets to S. America - which are either limited access or where AA is so much larger than their peers that they can dominate the market.
I'm not sure why some people struggle so hard w/ understanding that the same principle -size -that gives AA an advantage to Latin America is also what puts it at a disadvantage to Europe as well as Asia.
AA is in a highly competitive situation with multiple international carriers and is #3 to its US peers but US is the dominant carrier from PHL.
AA and US' total size over the Atlantic is now very close to the same.
The notion that US only flies trash across the Atlantic is not accurate based on current data. Although they most certainly were a bottom feeder for many years, that is not current reality. Their increased profitability of late is driven precisely because they are obtaining decent quality traffic.
There is no doubt that US' low labor costs help their profitability - but US is not a bottom feeder to Europe in a macro sense.
As for your data, 700, it is good data... but remember that DL has added a number of new personnel while also aggressively offering early retirement programs to incentify more costly employees to leave. DL has hired well over 1000 FAs in the past couple years - better than 5% of their FA workforce. Those FAs that were hired make far less than the topped out FAs that left, bringing down average salary data.
The same principle has been used elsewhere at DL.
US' average salary data for many job categories is high because they have not lost near as many topped out employees - and a big part of the reason that has happened is because employees who have lost their pensions are much more reluctant to leave. DL has had far more success in getting employees to retire early because their pension benefits are frozen, not terminated, and DL's pensions allow benefits to begin as early as age 52.
Terminating pensions has the unintentional side effect of forcing workers to stay working longer to make up for the benefits they lost, which forces costs back up again.
But the data from MIT is indeed good.
Once again the margin is expressed as a percentage, yield is reported in cents. Yes, US had a higher margin than AA in the Atlantic market but AA had a higher yield.
Please educate yourself:
http://www.investopedia.com/terms/p/profitmargin.asp
Josh
