US Airways has highest profit margin

[N965VJ]

Clearly! This airline has been written off so many times and still resurrects itself -- people thought US was done in the early 90s, in BK 1, in BK 2 -- it is the dark horse that won't die.

US is like a Cockroach.

The Cockroaches are leaving, though.

 

[PA18]

ABC World News did a story Monday night about how airline profits are soaring, while service and delays keep getting worse. The story specifically tied the rising profits to cutbacks in personnel and amenities, and overcrowded flights. (I looked for a video link on the network's website, but couldn't find it. Sorry.)

At the end of the piece, US Airways was particularly pointed out for having the highest profit margin, while having the worst on-time performance.

While our FF'ers are all too familiar with this problem, at least the mainstream media is finally getting it out to the general public (along with several recent newspaper and TV network news reports about the delays at major airports like LGA and ORD being caused by too many RJ's).

Of course, a quick glance in the back of one of US Airways' aircraft would suggest that not too many of the people sitting there watch ABC World News. They're probably watching Jerry Springer, or one of those stupid "Judge So-and-so" shows at 6:30.

 

[LCC-STEW]

It doesn't matter whether the service sucks, if passengers keep seeing a $200 roundtrip fare on travelocity, priceline, expedia, hotwire etc. They'll continue to book it, that's why US continues to make a profit.

 

[LCC-STEW]

Actually some of the folks in the back look like they have been ON Jerry Springer.

Another difference is Jerry gets that he's a joke. To bad the airline execs don't "Get it"

I don't know what route you've been on, but I haven't encountered those types. Besides, passengers pay our salaries and they deserve to be treated with respect!
I also would rather work in coach with poor passengers than deal with spoiled first class people who think they deserve everything.

 

[leprechaun]

That's the problem with LCC. I'd rather work shuttle flights where you're dealing with an educated passengers. The business passengers pays more on average for his ticket, and is much easier to deal with. Nothing worse than a boatload of Griswolds on an oversold flight to CLT, connecting everywhere.

With some of the fares we have, it's cheaper than taking the bus.

 

[gaucho99]

QUOTE(gaucho99 @ Sep 17 2007, 10:07 PM)
Like I said in the other thread, for accounting purposes, a lot of the costs associated with the east operation were charged to the west bottom line. So, the east in reality was not as profitable as the article portrays it to be and the west fared much better.


Money Talks, Bullsh!t walks.

PROVE IT

If according to Dougweiser your PHX hub was only "Marginally Profitable" and again according to Dougweiser PHL is the Company's "Most Profitable Hub" then square your statement as to what Doug has been saying.

I for one am NOT buying it for a NY minute. The SEC, GAAP, and Sarbanes-Oxley have severely limited the accounting shenanigans that the Sand castle would likely employ to obfuscate the truth regarding AWA's piss poor financials when viewed as a standalone company.

SPIN SPIN SPIN is all Tempe is good at.



It's a fact, all of the administrative costs for the merger get charged to the west. That greatly changes the bottom line and is why US shows the best profit margin and HP the worst. In reality, both are somewhere in between.

 

[leprechaun]

How can that be if the east is three times the size as the west?

 

[longing4piedmont]

QUOTE(gaucho99 @ Sep 17 2007, 10:07 PM)


It's a fact, all of the administrative costs for the merger get charged to the west. That greatly changes the bottom line and is why US shows the best profit margin and HP the worst. In reality, both are somewhere in between.

And this from some one who said shares was tested, the web site was tested, etc, etc, etc.

Reminds me of the old saying....Figures lie and liars figure

 

[gaucho99]

So you say! Again I say PROVE IT! Let's see the numbers.

You see Gaucho99 EVER since Scott Kirby's proclaimation that the "Reservation Migration was "By all accounts a rousing success" I take the view of "false in One, False in All"

I work backwards from the assumption that EVERY word coming from Tempe or anyone working on the America West side is a bald faced lie or at minimum an atempt to obfuscate or decieve. You want to know why? Read your own Companies Press Releases and quotes in the media, don't get angry at me!! Look in the Corporate Mirror folks.

Your vaunted "Just call me Doug" Management team is responsible for the current lack of trust. NOT ME! Don't like it??? Tough Darts.

NEWS FLASH!!!!!!

Another lie perpetuated by Tempe Exposed
So folks who do YOU believe??

The 8-k SEC filing or a member of "The Liars Club" aka Sandcastle? See below. NOTE. Bolding is the posters.

"(B) Shared operating expenses
The operating expenses of AWA reflect expenses for certain services shared with US Airways. During the first six months of 2007, in anticipation of merging to a single operating certificate, operations of AWA and US Airways continued to be integrated, including the migration to a single reservation system in early March. During the second quarter and first six months of 2007, shared services included reservations, technology and data processing services and corporate functions such as tax, legal, compliance,

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finance, operations and sales and marketing, including the costs of the combined Dividend Miles frequent traveler program. These shared costs have been allocated based on AWA’s and US Airways’ respective operational statistics, including revenue passenger miles (“RPMsâ€￾) and passenger sales revenues. The operating expenses of AWA also reflect shared expenses incurred at more than 30 overlap airports where the operations of AWA and US Airways have been consolidated. These shared costs have been allocated based on AWA’s and US Airways’ respective departures at those airports. Management believes that the methodologies underlying the allocation of these shared costs are reasonable. The following details the total shared expenses and airport shared expenses allocated to AWA and US Airways that are included in operating expenses for the three and six months ended June 30, 2007 and 2006 (in millions)"

Seems to me that according to the SEC filing that shared costs are allocated on a proportional basis. So then Gaucho99 I guess the real question is who is the Sandcastle lying to? Employees or the SEC?

They didn't lie to either. The costs you mentioned above are not the same ones referred to earlier. It was some administrative costs from east and west that were charged to west. I don't know how much it was, but it surely could make a difference in the subject of this discusion. East profit margin would be somewhat lower and west somewhat higher. Granted, the majority of the profit would still come from the east, it is much larger than the west, plus the east realized better synergies than the west from the merger.

 

[Bridogger6]

This is something I yanked from Jim (BoeingBoy) over at flyertalk... but it has snippets clipped right out of the quarterly report showing that US east side is gaining a lot of the US west's side revenue as it is being taking under the US side of the business and not the AWA side.. rather than repost the quarterly report I am just quoting Jim's post from flyertalk...


Snippets from the quarterly report.....

"During 2007, the net receivable from US Airways changed to a net payable to US Airways due to ordinary course operating transactions related to increased allocations of shared expenses as discussed in Note 5(B) and the migration of the AWA and US Airways reservations systems into one system where all ticket sales are issued and collected by US Airways."

"During 2007, the net payable to AWA changed to a net receivable from AWA due to ordinary course operating transactions related to increased allocations of shared expenses as discussed in Note 6(B) and the migration of the AWA and US Airways reservations systems into one system where all ticket sales are issued and collected by US Airways."

"Additionally, due to the merger of the AWA and US Airways reservations systems in March 2007, all ticket sales for transportation previously issued by AWA are now issued by US Airways. As a result, while AWA earns passenger revenues when operating flights for US Airways, all revenue adjustments resulting from the periodic evaluation of the air traffic liability account are now recorded by US Airways."

"As discussed above, as a result of the merger of the reservation system in March 2007, all ticket sales for transportation previously issued by AWA are now issued by US Airways. Accordingly, all revenues associated with ticket reissuance and change fees are now earned by US Airways rather than AWA."

"The increase in other revenues [for US Airways - Jim] was primarily driven by an increase in revenue associated with fees charged for ticket and flight changes, the sale of Dividend Miles to affinity credit card partners, and the sale of US Airways vacation packages."

"Other operating expenses [for America West - Jim] increased by 30.4% due principally to higher allocated costs for shared services with US Airways, including reservations, technology and data processing services in the 2007 period."

"Other operating expenses [for US Airways - Jim] decreased by 11.7% due to a $9 million credit to operating expenses associated with a Hurricane Katrina insurance settlement recorded in the second quarter of 2007 as well as lower allocated costs for shared services with AWA including reservations, technology and data processing services in the 2007 period."

There are a few other similiar tidbits, but they all add up to the same thing - revenue that would have gone to America West pre-merger now goes to US Airways, while some expenses that would have been lower at America West pre-merger are now higher.

Jim

 

[WCT]

Can we please not turn this into another who made money, who didn't?? Who saved eathother crapola! WE made higher profit share as a combined company. US Crew, please stop attacking the West please. :down:

 

[PA18]

That's the problem with LCC. I'd rather work shuttle flights where you're dealing with an educated passengers. The business passengers pays more on average for his ticket, and is much easier to deal with. Nothing worse than a boatload of Griswolds on an oversold flight to CLT, connecting everywhere.

With some of the fares we have, it's cheaper than taking the bus.

Stay off the shuttle flights on weekends. That's when they're taken over by the Great Unwashed.