More Cuts coming

[700UW]

Story

 

[Harry Callahan]

Word is that Clt will be getting approx 40 new flts around 3Nov or so. Due to this the station bid was postponed due to lack of employees.

 

[Dog Wonder]

Has shrinking to profitability been tried before?

 

[InternationalShannon]

Word is that Clt will be getting approx 40 new flts around 3Nov or so. Due to this the station bid was postponed due to lack of employees.

I know how that feels, I could hold weekends on the number two window at Wendy's and then one of the other Wendy's like fifteen states away laid off people who then moved to my Wendy's with like five minutes more seniority than me and knocked me down nine bid lines. NINE!!
Thursday Friday off if I'm lucky. Frickin fryer oil prices....

 

[gaucho99]

These are not more cuts....they are the cuts that were announced a couple months ago finally starting to take effect.

 

[john john]

These are not more cuts....

This is not my first rodeo

 

[Dorf]

Has shrinking to profitability been tried before?

Yes, by every other management before the boy blunder....he and his cronies didn't try it before, so they thought it might work for them. I seem to remember something about the definition of insanity as trying the same thing over and over and expecting a different outcome!?! The reason for shrinking was $140/barrel oil....now that it's closer to $110 I wonder what their excuse will be!!?? Oh, yea....they need to line their pockets at the expense of employee jobs and passenger perks/service.

Dorf

 

[FutureUScapt]

The reason for shrinking was $140/barrel oil....now that it's closer to $110 I wonder what their excuse will be!!?? Oh, yea....they need to line their pockets at the expense of employee jobs and passenger perks/service.
Dorf

While its great that the price of oil has dropped almost $40 from it's all time high, the latest doom and gloom, most recent a la carte pricing features, capacity cuts, etc were planned with the price of oil at $125/barrel NOT $147. So while oil has fallen almost $40, its only (though still notable nonetheless) dropped about $15/barrel as far as the "budget" is concerned.

A forecast early in the year estimated that US would lose between $400-500 million this year if oil were at $110. Obviously this was before the a la carte pricing structure was implemented and all of the industry capacity cuts were announced. Between the two (with a la carte alone supposedly adding $400-500 million a year to the bottom line) I'd say the US should be able to be break-even to modestly profitable if oil stays at this price.

 

[ussnark]

... with a la carte alone supposedly adding $400-500 million a year to the bottom line......

In 2007 US had ~58 million passenger enplanements. Assuming similar boarding numbers this year, to reach $400 million, each passenger per enplanement, would have to purchase the equivalent of 6.9 cokes, not even including the booze/sandwiches (presuming "a la carte" is different than what US did last year) they normally would have bought.

It seems the "add" is somewhat skewed from reality.

 

[wings396]

I was under the impression that the $400-500 Million figure also included the checked baggage fees.

 

[john john]

I was under the impression that the $400-500 Million figure also included the checked baggage fees.

You mean the NON-REV fee

 

[ussnark]

I was under the impression that the $400-500 Million figure also included the checked baggage fees.

The phrase, "a la carte", is normally reserved for food items.

Then, do the math. See if it is still a "reasonable" outcome. My numbers suggest a closer but still not a reasonable (within anticipated range of error bars) expectation.

About "checked bags". With a corporate discount, I would suggest that a traveler Fedex their potential checked bags. At least the knowledge that the bag would arrive on time would be worth a couple of extra bucks.

 

[FutureUScapt]

In 2007 US had ~58 million passenger enplanements. Assuming similar boarding numbers this year, to reach $400 million, each passenger per enplanement, would have to purchase the equivalent of 6.9 cokes, not even including the booze/sandwiches (presuming "a la carte" is different than what US did last year) they normally would have bought.

It seems the "add" is somewhat skewed from reality.


The phrase, "a la carte", is normally reserved for food items.

"A la carte" refers to the whole new pricing structure, not just food.

Yes, the $400-500 million includes more than just the drinks (which by the way are estimated to bring in ~$30 million, probably much more in line with your estimates). It also includes the fees for the 1st and 2nd checked bag and the preferred seating. I'm not sure about the food being in there, but I would tend to think that it isn't since that has been around for a while and no changes have been made.

 

[ussnark]

It also includes the fees for the 1st and 2nd checked bag and the preferred seating. I'm not sure about the food being in there, but I would tend to think that it isn't since that has been around for a while and no changes have been made.

Isn't "preferred seating" the same as "upgrades"? If so, than the only other change is charging for bags. With all the problems US has with baggage, I am not too surprised to see them charge extra to rip handles off bags and lose them. I am certain the passenger goes through the same calculus. The problem is, now there will be certain and more liability for damage/lost baggage, whereas before, it was kinda/sorta included in the original ticket price. Before, the bag was included in the "but you arrived safely" "contract". By forcing a separate "contract" just for baggage, I imagine there could really be some legal fun when things go wrong.

 

[BoeingBoy]

Isn't "preferred seating" the same as "upgrades"?

No, they're not the same if you mean upgrades to F/C or Envoy. Preferred seats are still coach seats.

There's also the other fees that have been added/increased - booking fee for award tickets, increased fee for booking award tickets less than 2-3 weeks ahead, etc.

Jim