Record Breaking Psgr Traffic

[usair_begins_with_u]

It is my understandings that US Airways’ revenue is improving

Revenue is misleading.. what about costs sir?? I worked for the airlines, I used to (albeit before wolf and gangwhal took over) be privvy to CASM and P/L's on a per O&D basis, and I was always skeptical of thier cost allocations. I dont believe there is anyone left at US who truely understands how to allocate costs to their matching revenues. [Which is one of the MAIN reasons metrojet failed]. Im sure if you exclude anything besides matching operating costs, & revenues, you're not left with much of a pot to piss in, subtract SG&A, and you see red ink. Who is going to bail this group out in october if some how they do make it out of BK this summer?

At 90% LF's, if this group is not rolling ROLLING in dough, they have big, big problems, period. Im not talking doom and gloom, I'm talking reality. 1Q results wont lie.. blah blah blah blame it on the weather, cuz you already milked the employees dry....

 

[BoeingBoy]

It seems to be feast or famine with the passenger loads. As far as making money goes.....

Talked to a pilot who flew ORF-CLT this morning on a 737-400. Overbooked by 20 and they all showed up. Gave away 2 R/T vouchers and $200 each to get the volunteers needed.

That can be the problem with 90%+ load factors.

Jim

 

[USA320Pilot]

In my opinion, US Airways is purposely overbooking flights to ensure no revenue is left behind. If the company has to give a way free tickets, so be it, but right now revenue improvement is critical to offset rising fuel prices. The company must provide a disclosure statement with a positive balance sheet projection and management is getting close to making the airline profitable, in spite of rising fuel prices.

There must be more change with some additional cost cuts, increased revenue, or lower fuel prices, but the airline is much closer today to pulling off another "formal reorganization" than many people believe. The battle is still an uphill climb, but the journey is shorter and the end of the reorganization is "in-sight."

Regards,

USA320pilot

 

[usair_begins_with_u]

In my opinion, US Airways is purposely overbooking flights to ensure no revenue is left behind.

No duh... thats what revenue mgmt is all about.. thats just good business.. If you do a good job, you can overbook without taking massive oversales.. you will get caught here and there, but statisticsally you should not fall outside the norm too frequently.. 20 oversales, means some one screwed up... it happens some times.

filling planes by selling junk is not a viable long term model.. U is only adding fuel to a fire it cannot continue to feed..

 

[BoeingBoy]

Talked to a pilot who flew ORF-CLT this morning on a 737-400. Overbooked by 20 and they all showed up. Gave away 2 R/T vouchers and $200 each to get the volunteers needed.

[post="259222"][/post]​

Overbooking to maximize revenue on the flight is one thing (and just about every airline does it). Perhaps, though, some missed the little "extra" that was being handed out along with the two R/T vouchers so I bolded it in the quote above. How many of those 20 people paid more than $200 for their ticket in the first place?

Jim

 

[ClueByFour]

In my opinion, US Airways is purposely overbooking flights to ensure no revenue is left behind. If the company has to give a way free tickets, so be it, but right now revenue improvement is critical to offset rising fuel prices.

[post="259224"][/post]​

It goes beyond free tickets. There are a few things to keep in mind.

At present, U's policy permits either a RTFC or a voucher for a voluntary bump. Far too many people take the RTFC--which is booked out of the same limited bucket that the 20/25k miles tickets come from. U does this enough, and people will want the travel vouchers, which do represent a loss (I know that the regulars all do, and I've incited enough people to "toe the line" on that score to get at least 8 people on two flights the vouchers instead of the cash).

Involuntary bumps are worse: with the infrequency of service U has to some destinations, you are almost always looking at the $400 or value of ticket scenario, plus honoring the original ticket on the next flight.

These actions are not cheap. For those people who are actually familiar with U's Rule 240 (and yes, U still has one on file with the DOT, last I checked), the compensation can also include just about any flight in any class on any airline that will take a U endorsed ticket, night's lodging, etc. VFFs (who are about the only folks still flying U regularly) know to ask or demand such things. When and if the phrase "Gimme a 120.20/240, whichever applies onto the CO flight to EWR" becomes a common lexicon among the not-so-frequent-flyers, it'll get even worse.

The luggage scenario (and it's associated costs) have been discussed elsewhere.

Smacks of desperation to chase very incremental revenue this way (overbooking flights with fares that don't make money to begin with).

 

[USA320Pilot]

It's not an act of desperation, it's complying with the ATSB and GE requirements for a rapid exit from bankruptcy. What's hurting is energy prices and without the 65% increase in fuel costs year-over-year, the company would be profitable today with a strong disclosure statement/POR.

Regardless, what is encouraging is the load factor, revenue firming, ticket price increases and forward looking bookings that are stronger than expected.

Regards,

USA320Pilot

 

[ClueByFour]

It's not an act of desperation, it's complying with the ATSB and GE requirements for a rapid exit from bankruptcy.

If U could find real backing, it would not need to "rapidly exit bankruptcy." Let's bear in mind how well this strategy worked the first time. Nonetheless, overbooking to the point of paying out mammoth amounts in compensation on fares that are not current supporting a profit sure sounds like an act of desperation.

 

[mweiss]

Perhaps, though, some missed the little "extra" that was being handed out along with the two R/T vouchers so I bolded it in the quote above.

Was that $200 in cash or a voucher? The distinction is important in many respects, particularly for a company so desperately in need of cash.

 

[BoeingBoy]

Michael,

I'm not sure if it was "cash" cash (i.e. crisp green bills) or check, but it wasn't a voucher like they give for travel, hotel, food, etc.

Jim

 

[mweiss]

If it was "cash" in the accounting sense of the word, that's beyond stupid.

 

[ClueByFour]

If the bumps were voluntary (eg, the inducement eventually resulted in "volunteers") it may have been vouchers.

If those were involuntary bumps, it was actual "cash."