The fewer airlines, the better - Consolidation lowers costs, boosts service

[USA320Pilot]

The fewer airlines, the better - Consolidation lowers costs, boosts service

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USA320Pilot comments: I'm sure Delta Air Lines CEO Gerry Grinstein loved opening up his company's hometown newspaper this morning. Grinstein got to read the OpEd column above the day before he sits down with US Airways' senior management team and his unsecured creditors trying to explain why Delta's yet to be identified stand-alone "exit plan" is superior to US Airways' $8 billion offer to acquire the Atlanta-based carrier.

As an astute member of the national news media told me regarding the proposed US Airways - Delta merger, "money talks".

Regards,

USA320Pilot

 

[USA320Pilot]

Here's a thought...the timing of the OpEd piece above published in today's ATL newspaper, the day before the first sit down meeting between US Airways, Delta, and the Delta unsecured creditors committee, is interesting at best.

The OpEd piece could not have been more supportive of US Airways' overture than if it had been written by the Tempe-based company's corporate communications staff.

Lobbysts at work?

Regards,

USA320Pilot

 

[Flufdriver]

Here's a thought...the timing of the OpEd piece above published in today's ATL newspaper, the day before the first sit down meeting between US Airways, Delta, and the Delta unsecured creditors committee, is interesting at best.

The OpEd piece could not have been more supportive of US Airways' overture than if it had been written by the Tempe-based company's corporate communications staff.

Lobbysts at work?

Regards,

USA320Pilot

"WT" aint gonna like reading this

 

[Itestwell]

"WT" aint gonna like reading this

Has this made it to the DL board yet? :unsure:

 

[whlinder]

"WT" aint gonna like reading this

He's left the building (so he says) after declaring that DL will reject this offer and emerge on their own, immediately print money and take over the world. Then he will return to rub it into other posters that he was right.

 

[Flufdriver]

Has this made it to the DL board yet? :unsure:

I just checked...did'nt see it yet!!

 

[USA320Pilot]

It is my understanding, the OpEd column author, Satish Jindel, is the founder of SJ Consulting Group, a Pittsburgh-based consultancy that provides strategy, marketing, merger and acquisition support, pricing, labor, operation and technology to transportation and logistics industries. He is frequently quoted in business and trade media and has had key roles in RPS start-up and expansion and advising FedEx on the Caliber/RPS/Viking Freight acquisition.

Regards,

USA320Pilot

 

[BoeingBoy]

As much as I chuckle at WT's "world domination by DL" views, I suspect that he might enjoy picking apart the obvious inaccuracies in Mr. Jindel's article. Perhaps Jindel (who's consulting business is based outside Pittsburgh, BTW) should stick to the what he knows best - the freight business.

Jim

 

[jimntx]

As much as I chuckle at WT's "world domination by DL" views, I suspect that he might enjoy picking apart the obvious inaccuracies in Mr. Jindel's article. Perhaps Jindel (who's consulting business is based outside Pittsburgh, BTW) should stick to the what he knows best - the freight business.

Jim

How dare you question the accuracy of an article that USA320pilot has blessed as Gospel truth! It may only be an OpEd piece (aka, one man's opinion), but it agrees with USA320pilot's view that LCC is headed toward 'world domination.'

 

[USA320Pilot]

Fool Fight: American vs. United

Will US Airways gobble up Delta and pummel them both?

See Story

Regards,

USA320Pilot

 

[PHL]

The article is misguided on the simple notion that larger aircraft will equal reduced costs and reduced air congestion. I watched the CNBC show "A week in the life of American Airlines". It could have been about any airline, for that matter. But it analyzed a single 767 flight from JFK to LAX. The profit after all expenses and mx worked out to a few thousand dollars (under $5000). Another flight on a MD80 netted a mere $200, and both flights were either sold out or very full.

Until there's just one airline serving all routes, there will never be a market to justify the larger aircraft between small or even medium sized cities. His premise is based on his years of freight experience. Well, guess what? Cargo doesn't complain and can take flights at odd times, with much less frequency. The passengers have spoken loud and clear over the years that they value more flight options (on smaller planes) than fewer (with larger planes). Until that paradigm shifts, which it won't, there will be no "large" planes on the middle routes.

Interestingly, DL did run a 767 from PHL to ATL in the 90's, but I think it continued onward somewhere as the same flight number. I think they even ran one from PHL to JFK that continued on to Europe as recently as 2001.

 

[Itestwell]

The article is misguided on the simple notion that larger aircraft will equal reduced costs and reduced air congestion. I watched the CNBC show "A week in the life of American Airlines". It could have been about any airline, for that matter. But it analyzed a single 767 flight from JFK to LAX. The profit after all expenses and mx worked out to a few thousand dollars (under $5000). Another flight on a MD80 netted a mere $200, and both flights were either sold out or very full.

Until there's just one airline serving all routes, there will never be a market to justify the larger aircraft between small or even medium sized cities. His premise is based on his years of freight experience. Well, guess what? Cargo doesn't complain and can take flights at odd times, with much less frequency. The passengers have spoken loud and clear over the years that they value more flight options (on smaller planes) than fewer (with larger planes). Until that paradigm shifts, which it won't, there will be no "large" planes on the middle routes.

Interestingly, DL did run a 767 from PHL to ATL in the 90's, but I think it continued onward somewhere as the same flight number. I think they even ran one from PHL to JFK that continued on to Europe as recently as 2001.

Actually, you have it backwards. The MD80 flight (DFW-BDL) produced a profit of a few thousand dollars, while the 767 (JFK- LAX) produced a mere $200 profit.

Insane, aint it?

 

[FA Mikey]

The DFW-BDL flight had a profit of $8,400 VS the JFK-LAX's $200.

 

[flyingcat]

The article is misguided on the simple notion that larger aircraft will equal reduced costs and reduced air congestion. I watched the CNBC show "A week in the life of American Airlines". It could have been about any airline, for that matter. But it analyzed a single 767 flight from JFK to LAX. The profit after all expenses and mx worked out to a few thousand dollars (under $5000). Another flight on a MD80 netted a mere $200, and both flights were either sold out or very full.

Until there's just one airline serving all routes, there will never be a market to justify the larger aircraft between small or even medium sized cities. His premise is based on his years of freight experience. Well, guess what? Cargo doesn't complain and can take flights at odd times, with much less frequency. The passengers have spoken loud and clear over the years that they value more flight options (on smaller planes) than fewer (with larger planes). Until that paradigm shifts, which it won't, there will be no "large" planes on the middle routes.

Interestingly, DL did run a 767 from PHL to ATL in the 90's, but I think it continued onward somewhere as the same flight number. I think they even ran one from PHL to JFK that continued on to Europe as recently as 2001.

This has to do nothing to due with the size of the planes. There are a multitude of factors that explain why a larger aircraft can make you more money and cost less than a fellet of smaller airplanes.

Longer routes burn more fuel.
LAX-JFK has jetblue pricing which is very low and earns far fewer cents per mile in profit than a short haul.
DFW-BDL is a 1000 miles shorter and even with the same price AA earns more.

On certain routes larger aircraft are a tremendous advantage.

For example if md80s could fly LAX JFK it would cost more to take the passengers on 2 or 3 flight than on 1 767 flight. Please note that LAX JFK already has 11 767 flights a day on AA!

This is why the RJ was such a hinderance to Independence air. An airbus 320 or 737 seat can carry a person for a fraction of an RJ. The same holds true of a 777-300 vs 767. The cost per seat goes down but you need to still fill the place with worthwhile fares otherwise you dig yourself a bigger hole for your grave.

If anything recent experience has shown that more frequencies are good but the costs per seat begin to skyrocket due to more aircraft. The 50 seat Rj once touted as the silver bullet for airlines are now more valuable as beer cans. More airlines are switching to 70 and 90 seaters due to better economics.

Frequency is good but in some ways it was over done and many routes could use less frequency but larger aircraft. This will greatly affect delay at airports in a huge way.

 

[jimntx]

Interestingly, DL did run a 767 from PHL to ATL in the 90's, but I think it continued onward somewhere as the same flight number.

And, AA used to fly DC-10's between Austin and Dallas! But, the frequency of flights in that market used to be a lot less than it is now.