Mesa May Help Merger Of Us Airways-america West
- Thread starter jB-Rocks
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Johnny O speaks:
Mesa Would Operate Narrowbodies If Allowed
Aviation Daily
05/02/2005
Jens Flottau
Mesa Air "would operate narrowbodies today, if we had different labor laws," CEO Jonathan Ornstein told delegates at the Phoenix Aviation Symposium.
Current scope clauses now in effect prohibit the regional carrier from moving up in aircraft size. As Ornstein highlighted, US Airways' profitability would improve by $2.8 million each time the airline replaced one of its mainline narrowbodies with an Embraer 170 operated by a regional carrier.
Despite the current restrictions, Mesa plans to finalize an order for Bombardier CRJ-700s shortly, Ornstein said. -JF
Mesa Would Operate Narrowbodies If Allowed
Aviation Daily
05/02/2005
Jens Flottau
Mesa Air "would operate narrowbodies today, if we had different labor laws," CEO Jonathan Ornstein told delegates at the Phoenix Aviation Symposium.
Current scope clauses now in effect prohibit the regional carrier from moving up in aircraft size. As Ornstein highlighted, US Airways' profitability would improve by $2.8 million each time the airline replaced one of its mainline narrowbodies with an Embraer 170 operated by a regional carrier.
Despite the current restrictions, Mesa plans to finalize an order for Bombardier CRJ-700s shortly, Ornstein said. -JF
AtlanticBeach
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whlinder said:
It requires a liberal use of smoke and proper placement of mirrors.
If he is referring to 72 people on an E170 versus 72 people on a B733, the savings is present. That savings is lost with comparable loads.
Yeah we would need to compare segment cost, but I have to wonder if to get that figure he (or whoever came up with that stat) took the yield of 70 highest paying customers to determine the revenue side.
For a single flight example, if the 737 leaves with 100 people with an average fare of 200, but the most expensive 70 tickets are sold with an average fare of 300, is that figure calculating the revenue as 70 x 300? Or assuming that the plane will constantly fly a 100% load factor?
I only thought of this since the word used was *profitability* (implying revenue calculations) and not just cost.
For a single flight example, if the 737 leaves with 100 people with an average fare of 200, but the most expensive 70 tickets are sold with an average fare of 300, is that figure calculating the revenue as 70 x 300? Or assuming that the plane will constantly fly a 100% load factor?
I only thought of this since the word used was *profitability* (implying revenue calculations) and not just cost.
BoeingBoy
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You both have valid points. I was looking at it strictly from the "lower segment cost = less total cost = improved profitability (or less loss)" vantage that assumed revenue stayed the same. Obviously one could play with the yield/LF numbers to come up with whatever answer one wanted.
Jim
Jim
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whlinder said:replace 69 narrow bodies
[post="266069"][/post]
Interesting number. One airline analyst has opined that among the steps needed to make a AW/US merger work would be the parking of 75-100 planes from US's fleet.
[edit - sorry, but the link requires signing in to Fidelity Investments. I'll attach the piece]
Jim
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There is reason to believe the Prudential Equtiy Investment report hyperkinked below (first provided by BoeingBoy) on the potential US Airways - America West merger is looking at US Airways' pre-bankruptcy fleet plan of 281 mainline and 28 (25 flying and 3 to be delivered) MDA aircraft. US Airways is currently scheduled to reduce its fleet by 54 aircraft from the start of the year, which includes 10 A319s and 11 B737s in 2005, 10 B737s in 2006, 5 B737s in 2007 and 28 EMB-170s to Republic.
Of those aircraft, 16 aircraft have already been removed from the pilot/F/A permanent bid and schedule.
Moreover, there are strong indications GECAS desires to take back some of America West's aircraft too, in exchange for merger support that reduce the financier's exposure to the Tempe-based company during the transition. There are better overseas leasing opportunities for older America West B737s for GE, just like with US Airways' B737s., and for continued POR support, GE wants to diversify its U.S. risk. In addition, this would further reduce the combined business entities average fleet age and future heavy maintenance requirements.
Click here for the link provided by BoeingBoy.
Separately, US Airways appears to be managing pilot staffing in anticipation of the merger and cannot effectively support current operations. One ALPA official I talked with today said the union believes the company is understaffed by about 400 pilots, which is why ALAP is having problems with contract interpretations such as "Illegal" days and "Personal Drops" due to serious crew shortages.
With the average pilot age over 53, significant LTD problems, early/normal retirements, and resignations, the pilot staffing problem will become even more acute going forward. For bid 05-02A for the months of May and June, US Airways lost 88 pilots or an average of 44 per month and its is expected high attrition will continue in the future.
Of those aircraft, 16 aircraft have already been removed from the pilot/F/A permanent bid and schedule.
Moreover, there are strong indications GECAS desires to take back some of America West's aircraft too, in exchange for merger support that reduce the financier's exposure to the Tempe-based company during the transition. There are better overseas leasing opportunities for older America West B737s for GE, just like with US Airways' B737s., and for continued POR support, GE wants to diversify its U.S. risk. In addition, this would further reduce the combined business entities average fleet age and future heavy maintenance requirements.
Click here for the link provided by BoeingBoy.
Separately, US Airways appears to be managing pilot staffing in anticipation of the merger and cannot effectively support current operations. One ALPA official I talked with today said the union believes the company is understaffed by about 400 pilots, which is why ALAP is having problems with contract interpretations such as "Illegal" days and "Personal Drops" due to serious crew shortages.
With the average pilot age over 53, significant LTD problems, early/normal retirements, and resignations, the pilot staffing problem will become even more acute going forward. For bid 05-02A for the months of May and June, US Airways lost 88 pilots or an average of 44 per month and its is expected high attrition will continue in the future.
