This may be why LCC chose A350 over 787...

[Elevation]

In business there is a phrase that applies to what you factually point out. We need to "Look inside the numbers" to determine exactly what they tell us. Some of the things they clearly tell us are:

Let's do that Whiney Blob

Much of the profit was the result of artificially low wages, Have you looked at your paycheck lately?

You make sound easy to turn a profit in this business. Old USAIR had taken concessions to there wages prior to merger, fuel was what $30-40 a barrel, and still they made no profits, but LOST a lot of money, not so easy to turn a profit is it.

ALL of the profit came from the East side of the business where the Revenue Premium exists from the type of flying done and the types of customer willing to pay for it.

USAir made $0 profit from 2001 until merger and passenger numbers where declining, AWA made money=FACT

Profit sharing for the employees only exists as a result of organized Labor in the East negotiating it. The current management didn't give it to you, You Labor brethren in the East did.

True

The EMB 190 is a solid addition to the fleet. US East was already headed down that road with the E-170. Again more ground work laid by the East.

East sold the planes(E170) and the employees away, to a crappy regional on par with Mesa, great ground work.

Both merged airlines needed ATSB assistance or we wouldn't be here debating the fine points of the '06 financials. I will heap credit on both predecessor companies for their financial acumen. The one thing that US management then and now exhibited is strong financial skills.

Are you praising both companies for instituting artificially low wages? You can't have it both ways there whineyblob.

US & HP saved each other, Parker said so himself. With the turn in the economy US would have likely emerged from BK and survived as would have HP, but neither would have the financial health they enjoy as one. As far as I'm concerned the TRUE HERO of the merger is and in my mind Bruce Lakefield. Between him, John Luth & Seabury Group the monies got found to make the merger go.

The money valves were open when AWA tried to buy ATA in DEC 2005. Which was prior to the USAIR deal.

I also get the impression that Jeff McCelland was really the brains of the outfit and his passing has left a huge hole in the Management Team at Tempe. One that frankly given the current operational shortcomings and subsequent customer ire Scott Kirby and others have yet to fill.

Solid statement

While I agree there are things to be happy about and there is certainly hope that things will get better. But OTOH I can't just sit here and lie about the facts and they are that as a Chariman's Preferred I'm paying the same or more and getting less on several different levels.

Keep up the good work. 😉

 

[luvn737s]

Pay Cuts from East, E-190 was ordered way before the merger,paying the ATSB off via other loans! Do some homework first. Risk of harming HP? lol They do that themselves (Sandcastle). Who was almost blacklisted by the FAA?

Why do folks think that pay cuts are temporary? The East had feet of clay in adapting to the new realities of the airline world. Painful, yes, but certainly not unexpected. Nothing will be restored. Going forward, the industry may evolve into one that can support somewhat higher costs, but not in the near term.

And there would have been no E-190's on the property if the rest of the fleet had been repossesed.

A word to the wise, don't touch the third rail of safety; the Rustbucket's record ain't pretty.

I also get the impression that Jeff McCelland was really the brains of the outfit and his passing has left a huge hole in the Management Team at Tempe. One that frankly given the current operational shortcomings and subsequent customer ire Scott Kirby and others have yet to fill.

Kirby is no McClelland. Do you want Al back?

Hey, we finally agree on something. What did you do to Piney?

Open the trunk and untie him NOW!

 

[BuffaloJoe]

Do you want Al back?

Yeah, he's CEO of US now.

Doug AL K HALL Parker! 🙄

 

[BoeingBoy]

(do I need to go on?)

Probably....

How about simplified fare structure,

Yes, on the HP side - when's it coming to the East? Picked CLT-MIA at random, over two weeks out, and see 4 coach fares each way ($118 to $586 ex-taxes/fees). That means 16 different R/T fare possibilities ranging from $236 to $1172 (ex-taxes/fees). Not very simple.

paying off ATSB loans,

Sure takes a lot of talent to pay off one loan with the money from another. Millions of people do that every year when they refinance their home - where's the "multi-million dollar acumen" in that?

most ambitious merger in airline history while making a profit all along,

Most ambitious? That's saying something when viewed in the context of airline history. Making money all along? Exactly how many of the 6 quarters since the merger have been profitable? On the HP side that Doug was running so successfully all along?

profit sharing,

Thanks to the East. You're welcome, even though you didn't say "Thanks".

E190 rollout,

Oh, you mean those airplanes US got because of the order by pre-merger US?

saving US from extinction at the risk of harming HP

According to Kirby, the money from the outside investors is all that kept HP from filing BK. Maybe those folks should get the credit.

Jim

 

[Elevation]

Probably....

Yes, on the HP side - when's it coming to the East? Picked CLT-MIA at random, over two weeks out, and see 4 coach fares each way ($118 to $586 ex-taxes/fees). That means 16 different R/T fare possibilities ranging from $236 to $1172 (ex-taxes/fees). Not very simple.

Sure takes a lot of talent to pay off one loan with the money from another. Millions of people do that every year when they refinance their home - where's the "multi-million dollar acumen" in that?

Most ambitious? That's saying something when viewed in the context of airline history. Making money all along? Exactly how many of the 6 quarters since the merger have been profitable? On the HP side that Doug was running so successfully all along?

Thanks to the East. You're welcome, even though you didn't say "Thanks".

Oh, you mean those airplanes US got because of the order by pre-merger US?

According to Kirby, the money from the outside investors is all that kept HP from filing BK. Maybe those folks should get the credit.

Jim

First retirement, then senility....so sad 😛

 

[BuffaloJoe]

First retirement, then senility....so sad 😛

And what is your excuse? Having a G.W. Moment? :bleh:

 

[BoeingBoy]

First retirement, then senility....so sad 😛

When you refute the facts, use insults......

Jim

 

[FWAAA]

Even assuming that the article is completely factual, wouldn't Airbus have to discount the A350 further to undercut Boeing's 787 price? The article claims that Airbus merely matched the discounted Boeing price. Given Airbus' historical difficulties with overpromising and underdelivering, you'd think that it would have to offer a significant purchase price advantage to help overcome the risks the buyers are taking on.

 

[PBI2FLL]

It's all SPECULATION at this point folks...but we we'll find out very soon! It wouldn't surprise me to see both the 787 and A350 ordered. The 787-8 would certainly be a great replacement for the 767/757 fleet.

 

[nycbusdriver]

No other airline wants the POS!

I "grew up" Boeing, having flown the KC-135 in the military, then on to the 727 (all 3 seats), and left seat on the 737, 757, 767. No doubt about it, Boeing makes very nice airplanes that last far longer than the Airbuses were designed to last. Just go look at the aircraft boneyards and what do you mostly see? Boeings! All those airplanes were acquired at premium prices because they lasted so long, and now the last 1/3 of their life (the supposed reason for paying the premium) is being flushed down the toilet. Great cost effectiveness, huh?

I now prefer the Airbus products that I've flown (A320 series and A330) over the Boeing for pure creature comfort. The automation is better (once you acquire an open mind and realize that it's NOT a Boeing and isn't trying to be a Boeing,) and the airplanes are more comfortable both for the cockpit and cabin. If the A350 is engineered like the 320 and 330, I think Parker made a great choice.

 

[fr8tmastr]

I "grew up" Boeing, having flown the KC-135 in the military, then on to the 727 (all 3 seats), and left seat on the 737, 757, 767. No doubt about it, Boeing makes very nice airplanes that last far longer than the Airbuses were designed to last. Just go look at the aircraft boneyards and what do you mostly see? Boeings! All those airplanes were acquired at premium prices because they lasted so long, and now the last 1/3 of their life (the supposed reason for paying the premium) is being flushed down the toilet. Great cost effectiveness, huh?

I now prefer the Airbus products that I've flown (A320 series and A330) over the Boeing for pure creature comfort. The automation is better (once you acquire an open mind and realize that it's NOT a Boeing and isn't trying to be a Boeing,) and the airplanes are more comfortable both for the cockpit and cabin. If the A350 is engineered like the 320 and 330, I think Parker made a great choice.

Good points, so why does Air France fly the 777? Why cant the 321 fly across the country as well as a 25 year old 757? Why did several far eastern countries opt for the Boeings after already taking delivery of 330 and 340's? I know part of the answer, range and payload. (from Aviation Week and Space technology)
Why did Delta remove the Airbus from their fleet? (sold to Air Jamaica Mon)

Discaimer, I have not flown either, so this is not about how they fly, I am basing my assumptions on the facts of other airlines and how the 321 performs at Airways especially compared to the Boeings which are all much older designs.

I think part of the reason there are so many retired Boeings is because of all the outsourcing, planes had to be parked, so they parked the oldest ones. Also fuel burn.

 

[nycbusdriver]

Good points, so why does Air France fly the 777? Why cant the 321 fly across the country as well as a 25 year old 757? Why did several far eastern countries opt for the Boeings after already taking delivery of 330 and 340's? I know part of the answer, range and payload. (from Aviation Week and Space technology)
Why did Delta remove the Airbus from their fleet? (sold to Air Jamaica Mon)

Discaimer, I have not flown either, so this is not about how they fly, I am basing my assumptions on the facts of other airlines and how the 321 performs at Airways especially compared to the Boeings which are all much older designs.

I think part of the reason there are so many retired Boeings is because of all the outsourcing, planes had to be parked, so they parked the oldest ones. Also fuel burn.

It's so funny that the old 321 argument ALWAYS seems to pop up very quickly in the Boeing Vs. Airbus debate. The 321 is manufactured because the airlines want it. It fills a niche, and when management has a clue, it fills that niche rather well. And I would wager that the 321 burns a lot less fuel to get those passengers to the same place as the 757. The passengers are oblivious to the fact that they are flying at 31000 feet instead of 39000 feet. They just know that getting stuck in a B or E seat on a 321 for hours is far more tolerable than a B or E seat on the 757. (Pilots always tout the vast power that the 757 has, and indeed it does. I always say that pilots (mostly males)love the 757 because it has big tits. I guess that's a bit Freudian, but that's how I see it.)

And the airline that took the Airbus out of their fleets likely did so for many and varied reasons. It's not necessarily that they didn't like the Airbus, its probably just didn't fit as economically in their fleet plan.

And with your last paragraph, you made my point! Thank you. After about 15 or 20 years, the technology of airliners is so vastly changed that things like fuel burn and wing/fuselage begin to make a difference. So why design (and charge a premium for) an airplane that the airlines won't likely want after about 15 or 20 years? But an even better question is: why pay a premium for those extra 10 or 15 years of service life if there is little likelyhood that those years will be in active fleet service?

 

[BoeingBoy]

But an even better question is: why pay a premium for those extra 10 or 15 years of service life if there is little likelyhood that those years will be in active fleet service?

It comes back to PineyBob's comments - pay up front (not a given considering the competitiveness of the market) or pay later. An airplane with a 25 year design life is more likely going to cost more to maintain at the 15-20 year point than one with a 40 year design life.

Of course, it's highly unlikely that US will just buy the airplanes anyway. They'll either lease them, buy then do a sale/leaseback, or mortgage them (EETC). So the question becomes which has the lowest lease/EETC cost vs lease/EETC cost plus operating cost.

Also, your argument about technology changing every 20 years or so (while somewhat accurate), leads to the conclusion that US shouldn't order narrowbodies now. The designs available are approaching that age, and new technology is 8-10 years away. So the "why buy old technology" would have US waiting for the next versions of the 737/A320 (or whatever else might become available).

Jim

 

[legacy-to-LCC]

It comes back to PineyBob's comments - pay up front (not a given considering the competitiveness of the market) or pay later. An airplane with a 25 year design life is more likely going to cost more to maintain at the 15-20 year point than one with a 40 year design life.

Of course, it's highly unlikely that US will just buy the airplanes anyway. They'll either lease them, buy then do a sale/leaseback, or mortgage them (EETC). So the question becomes which has the lowest lease/EETC cost vs lease/EETC cost plus operating cost.

Also, your argument about technology changing every 20 years or so (while somewhat accurate), leads to the conclusion that US shouldn't order narrowbodies now. The designs available are approaching that age, and new technology is 8-10 years away. So the "why buy old technology" would have US waiting for the next versions of the 737/A320 (or whatever else might become available).

Jim

as usual, a very helpful analysis!
at this point do either airbus or boeing have a "clean sheet" narrowbody replacement project?
between the 380 delays and 350 launch/re-launch debacle, airbus seems to have its share of distractions...
and, i suspect, boeing is waiting for performance stats from the 787 technology to possibly integrate into a 737 "replacement"?

 

[BoeingBoy]

at this point do either airbus or boeing have a "clean sheet" narrowbody replacement project?

Neither have a firm proposal that I've seen anything on. Boeing seems to be a little further along (my impression only), shopping around the idea of 2 replacements - a twin-aisle at the larger end of the 100-230 seat range to slot in under the 787 and a single-aisle at the lower end, with both obviously using "lessons learned" from the 787 (including composites, aerodynamics, and engines).

Neither is saying anything firm, apparently fearing that too much info too soon will take away from 737-7/8/900 and A319/20/21 orders - one of Boeing's good sellers and about the only Airbus sales success right now.

Actually, though I was chiding nycbusdriver a little, now is a pretty good time to be ordering a narrow-body replacement - assuming that they could come pretty quickly. With Parker's propensity to lease (HP leases all of their planes), having current generation new equipment for 8-10 years or so would make the timing of replacing them about right for the next generation designs.

Jim