I know, it's a long read, but interesting regarding United's business partner USAir. Please note, last paragraph addresses significantly higher fuel costs for UAL's business plan. Someone on this board (several months ago) claimed that the UAL plan had used fuel costs based on the same rate used in the previous plan rejected by the ATSB. Maybe there was some truth to it.
Southwest Airlines Pondering a Bigger Start in Philadelphia
By MICHELINE MAYNARD
Published: April 16, 2004
"Southwest Airlines said yesterday that it was considering adding more flights from Philadelphia International Airport, where it plans to begin service next month, and said that it believed the city could become one of its major destinations.
The announcement highlights the continued heated competition between major airlines and low-fare carriers.
Southwest's chief financial officer, Gary C. Kelly, said Philadelphia had the potential to rank with Baltimore-Washington International Airport as one of his airline's biggest destinations. In the 1990's, Southwest edged out US Airways to become the biggest carrier serving Baltimore.
Southwest, the nation's largest low-fare carrier and the sixth-largest domestic airline, will start Philadelphia service on May 9, reaching 28 departures a day to 14 cities by July. Its original plan, announced last October, was to serve six cities with 14 departures a day.
Its moves have set off a flurry of activity at an airport long dominated by US Airways, the seventh-largest airline, which uses Philadelphia as one of its three hubs.
US Airways, which has 375 daily departures from Philadelphia, has responded by increasing flights to the destinations served by Southwest, and dropping fares on those routes. Frontier Airlines, meanwhile, announced that it would begin service to Philadelphia from Denver and Los Angeles on May 23.
Also yesterday, Delta Air Lines said it would offer 15 flights a day from Atlanta to Philadelphia beginning June 1, up from 11 now. That effort is aimed more at competing with AirTran, which serves the same route, than Southwest, which does not fly to Atlanta.
But Delta's action illustrates the newfound seriousness with which the industry is viewing Philadelphia. US Airways chief executive, David N. Siegel, has used Southwest's imminent arrival as a rallying cry in his bid to wrest a third round of contract concessions from his airline's unions. Last month, Mr. Siegel declared on an employee telecast that Southwest was "coming to kill us."
In a conference call yesterday, Mr. Kelly said the expansion in Philadelphia was the first time in Southwest's history that it had added flights from a new market before it had begun service there. He said advance reservations were the strongest ever for the airline at a new city.
"Are we thinking about more flights? Well, yeah, based on the way things seem to be," Mr. Kelly said.
The increase could be sharp. Mr. Kelly noted that Southwest began service in Baltimore in 1993 with eight departing flights a day. It now offers 162, making Baltimore the airline's third-biggest destination, behind Las Vegas and Phoenix.
"Can we do that with Philadelphia in theory? We don't have a plan that says 162, but it is that kind of potential, and we'll see where things play out," Mr. Kelly said.
Mr. Kelly's comments came as Southwest said it earned $26 million during the first quarter, slightly better than the $24 million it earned a year ago. It was the airline's 52nd consecutive quarterly profit.
But while Southwest was more than 80 percent hedged against jet fuel prices, which have climbed more than 41 percent in the last year, Mr. Kelly said the issue was still affecting the airline's results. "Our costs are up; we're not happy about that," Mr. Kelly said.
He acknowledged that the airline would spend more on advertising in the second quarter, as it begins service from Philadelphia. But he said he hoped stronger business during the summer would offset the expense.
Continental Airlines, meanwhile, said higher jet fuel costs were the major factor in its $124 million loss. That was about half the airline's $221 million loss in the first quarter last year. Continental had hoped to break even for 2004, a prospect executives say is vanishing as fuel prices rise.
In addition, United Airlines, which is under bankruptcy protection, forecast yesterday that its jet fuel costs in 2004 would be $450 million more than expected when it drafted a business plan in mid-December. The plan formed the basis of United's application for $1.6 billion in federally backed loans. United made the disclosure in documents filed with the United States Bankruptcy Court in Chicago."
Southwest Airlines Pondering a Bigger Start in Philadelphia
By MICHELINE MAYNARD
Published: April 16, 2004
"Southwest Airlines said yesterday that it was considering adding more flights from Philadelphia International Airport, where it plans to begin service next month, and said that it believed the city could become one of its major destinations.
The announcement highlights the continued heated competition between major airlines and low-fare carriers.
Southwest's chief financial officer, Gary C. Kelly, said Philadelphia had the potential to rank with Baltimore-Washington International Airport as one of his airline's biggest destinations. In the 1990's, Southwest edged out US Airways to become the biggest carrier serving Baltimore.
Southwest, the nation's largest low-fare carrier and the sixth-largest domestic airline, will start Philadelphia service on May 9, reaching 28 departures a day to 14 cities by July. Its original plan, announced last October, was to serve six cities with 14 departures a day.
Its moves have set off a flurry of activity at an airport long dominated by US Airways, the seventh-largest airline, which uses Philadelphia as one of its three hubs.
US Airways, which has 375 daily departures from Philadelphia, has responded by increasing flights to the destinations served by Southwest, and dropping fares on those routes. Frontier Airlines, meanwhile, announced that it would begin service to Philadelphia from Denver and Los Angeles on May 23.
Also yesterday, Delta Air Lines said it would offer 15 flights a day from Atlanta to Philadelphia beginning June 1, up from 11 now. That effort is aimed more at competing with AirTran, which serves the same route, than Southwest, which does not fly to Atlanta.
But Delta's action illustrates the newfound seriousness with which the industry is viewing Philadelphia. US Airways chief executive, David N. Siegel, has used Southwest's imminent arrival as a rallying cry in his bid to wrest a third round of contract concessions from his airline's unions. Last month, Mr. Siegel declared on an employee telecast that Southwest was "coming to kill us."
In a conference call yesterday, Mr. Kelly said the expansion in Philadelphia was the first time in Southwest's history that it had added flights from a new market before it had begun service there. He said advance reservations were the strongest ever for the airline at a new city.
"Are we thinking about more flights? Well, yeah, based on the way things seem to be," Mr. Kelly said.
The increase could be sharp. Mr. Kelly noted that Southwest began service in Baltimore in 1993 with eight departing flights a day. It now offers 162, making Baltimore the airline's third-biggest destination, behind Las Vegas and Phoenix.
"Can we do that with Philadelphia in theory? We don't have a plan that says 162, but it is that kind of potential, and we'll see where things play out," Mr. Kelly said.
Mr. Kelly's comments came as Southwest said it earned $26 million during the first quarter, slightly better than the $24 million it earned a year ago. It was the airline's 52nd consecutive quarterly profit.
But while Southwest was more than 80 percent hedged against jet fuel prices, which have climbed more than 41 percent in the last year, Mr. Kelly said the issue was still affecting the airline's results. "Our costs are up; we're not happy about that," Mr. Kelly said.
He acknowledged that the airline would spend more on advertising in the second quarter, as it begins service from Philadelphia. But he said he hoped stronger business during the summer would offset the expense.
Continental Airlines, meanwhile, said higher jet fuel costs were the major factor in its $124 million loss. That was about half the airline's $221 million loss in the first quarter last year. Continental had hoped to break even for 2004, a prospect executives say is vanishing as fuel prices rise.
In addition, United Airlines, which is under bankruptcy protection, forecast yesterday that its jet fuel costs in 2004 would be $450 million more than expected when it drafted a business plan in mid-December. The plan formed the basis of United's application for $1.6 billion in federally backed loans. United made the disclosure in documents filed with the United States Bankruptcy Court in Chicago."
