US Airways says load factor up, demand flat

[Todd B]

CHICAGO, July 3 (Reuters) - US Airways Group Inc. said on Thursday that more seats were filled on its planes in June, but it was not seeing a pick-up in passenger yield or business demand.

The No. 7 U.S. airline, which emerged from bankruptcy protection in March, said its load factor -- or the percentage of seats filled on its planes -- rose 1.3 percentage points from a year earlier to 78.6 percent in June.

But revenue passenger miles, or traffic, fell 5.8 percent as capacity contracted 7.3 percent from June 2002, the carrier said.

Although we are seeing a higher percentage of seats filled and reported a record load factor for the month of June, passenger yield shows no signs of improvement and business demand remains flat, said B. Ben Baldanza, US Airways senior vice president of marketing and planning, in a statement.

Airlines have had little pricing power as the industry suffers through its worst downturn ever, leaving yields -- or average fares -- weak.

 

[trvlr64]

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On 7/3/2003 413 PM Todd B wrote:

"Although we are seeing a higher percentage of seats filled and reported a record load factor for the month of June, passenger yield shows no signs of improvement and business demand remains flat," said B. Ben Baldanza, US Airways senior vice president of marketing and planning, in a statement.

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NO Deleted SHERLOCK!! Let's see why there is no improvement shall we?

HMMMM...........you took a lot of flights away after 9/11 and Bush's little incursion into Iraq. Less planes but more butts in them. An interesting scenario don't you think? For reference sake look at how many flights have been removed from PIT and sent to PHL and CLT just in the last 6 months. Less flights to choose from or now you get a lovely RJ to squeeze in to. Interesting!?!

Your airfares are still at low prices to entice the "wal-mart" customers but we have less flights to choose from or we have to be connected through PHL. What a lovely mess PHL is becoming lately.

God forebid I have to make a last minute flight for my job, you love to gouge me. Or certain markets are so overly priced you again force us to seek other airlines for our travel. Check out PIT to DFW leaving on a Monday with a return on Friday, any week of any month. Then go check the codeshare with UA and see that they sell the same flights for up to $500.00 less. What's up with that BBB? Expecting UA to give US some of that money back??

You whine the business demands are flat. Hhmmm again. You guys still won't change your fare structure for the business traveler so we're forced to find alternative airlines to fly with. Those with a cost structure that actually makes sense. Interesting again!?! I'm seeing a pattern here. Make the fares more attractive to those that actually fly all the time, like a business traveler. Oh, and that would be me BBB, one of those cockroaches that helps to pay your salary.

You state you're the Senior VP of marketing and planning. What are you planning BBB? The demise of USAirways? The gameboard easier to deal with than real life? You have done nothing, nada, zip to market this airline post bankruptcy. What are they paying you to do? I'd love to know your marketing strategy and forecast for the life of this airline. So far you've done nothing to attract customers. You are good at irritating us though. God, I'd love to have your job for 1 year.


There I'm done, I've gotten that off my chest. Hey BBB, I'm using miles to fly in ENVOY class to AMS tomorrow for my birthday. And taking 2 friends with me too. We'll drink a bottle of champagne in your honor.

 

[A320 Driver]

Isn''t "Load factors up" and "demand flat" a contradiction?

Just curious. Sounds like more bologna to justify swiping that last 5% from us.

A320 Driver

GIVE IT BACK!!!!!

 

[ClueByFour]

I''ve been buying lots of codeshare tickets on UA. I average almost %40 savings off of the US price, even on US metal.

I realize that UA pays US to haul my butt around, but c''mon. I''d be happy to give US a few bucks more to upgrade.

Upcoming trip MDT-ATL-PIT with a Sat. stay. UA wanted like $238. US wanted $400+. It''s RJs on either carrier down to ATL, and real metal on US in either case back.

Why on earth would I buy the US ticket? To upgrade CLT-PIT coming back?

I''ll get my DM credits. I''ll get some UA miles for booking online. I may even catch an upgrade on the day of.

BBB should look in the mirror and realize that as long as US continues to try to stick it to the "business" traveler, the "business" traveler will take his/her medium and high value tickets elsewhere.

 

[AIRMAIL]

It appears to me that the public is out there and wants to travel. Now is the time for U`s Marketing Dept. to get to work. Upper mgmt should also take a look at the fare structure to better compete with the low cost guys. But all we hear is we need more cuts and you are not going to get your 5% back. U needs some new leadership that wants to lead this company. This leadership was brought in to get us through bankruptcy and now we are out. They have not proven they can run an airline or that they want to either. We should be adding mainline flights and not cutting back. Let`s start setting the pace and get aggressive in getting more pax/s flying U.

 

[wings396]

Do we still have a Marketing department?????

 

[Formatman]

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On 7/3/2003 9:42:37 PM wings396 wrote:

Do we still have a Marketing department?????

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Not an effective one!

 

[USHenry]

NO! US needs to keep cutting capacity in key markets! Then US will get the planes 100% full! Who gives a rat''s butt about long term effects like surrendering entire markets and thousands of passengers to Delta and Southwest? Except of course Philadelphia and Charlotte!!

Heck, I think they should just run 15 planes a day between Charlotte and Philadelphia and DC/Reagan. We can fill them 100 percent!


Can any of you guys slip some testosterone pills in the coffee at CCY?

 

[N628AU]

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On 7/3/2003 800 PM A320 Driver wrote:

Isn''t "Load factors up" and "demand flat" a contradiction?

Just curious. Sounds like more bologna to justify swiping that last 5% from us.

A320 Driver

GIVE IT BACK!!!!!

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It''s not bologna. Load factors are partially a case of how many available seats there are. ASMs dropped more than RPMs did, which is a nice match from a capacity/demand standpoint.

The marketing posts are right on though. Having the same flights with a UA codeshare slight number on US metal priced signifcantly less is ridiculous. Yes we get the revenue anyway if it a US aircraft, but why make the passengers hunt around for that fare. They may come across a DL or CO fare that is less, and we see nothing.

 

[deelmakur]

Self abuse abounds in the executive suite. Each successive downgrade, from meals for sale to thousand mile RJ stages, to reduction in first class seats, to reduced capacity, just seems to add to the downward spiral. You almost get the feeling that maybe the regular customers don''t like some of this stuff. USAirways isn''t the local distributer for this nonsense. The other trunks are getting pretty good at it themselves, and the no frills guys are in the stratosphere. Great example. AA decides to "teach" JetBlue a lesson, so they become "son of discount guy", put the seats back in, and run ads that look just like them. What better way to fix your problems than to start a brawl over $299 transcon fares. So today, Neeleman announces he''s going to take seats out of those JetBlue buses, and give everybody more room. Now what do they do at AA, yank the seats back out? That won''t confuse the customer, will it? Before anybody finds too much comfort in that being an AA problem, take a look at those Brazilian Bombers JetBlue just ordered. They''ll look very good in places like RDU.By the way, if you remove capacity, of course your load factor goes up. Next.

 

[mrplanes]

These guys are genuises at slashing costs. They are bumbling idiots at running an airline. Our business model hasn''t changed other than attempting to insert hundreds of RJ''s and a code share into U. Now lets see where that has gotten AMR, NWA, CAL, UAL etc... Exactly the same place we are. Losing money and wringing our hands wondering why the "business market" hasn''t rebounded. We are pulling out of SNA, a serious business market, with an 80+% load factor. Why? Maybe their business plan is WRONG!!! And we are losing money AFTER we have cut. The others are still working the cuts out of their employees.

Who is making money? Southwest, JetBlue, Airtran. Why? Because those managements have recognized (especially JetBlue) that the airline paradigm has shifted. Just as it did when the hub and spoke came around. Our guys assume RJ''s are the answer to more efficient hubbing. There guys are ordering more LARGE jets because they understand the new paradigm. Hubbing is history. Oh wait. I forgot. Our government approved our business plan so we could get the loan. Yeah, that means our plan is good. Approved by an entity that can''t balance its own books and runs deficits that boggle the mind. Yeah, they surely know a good business plan when they see one.

The only airline that is making any sense with the new paradigm is DAL with Song. Watch and see what happens there. Although I doubt DAL will release any numbers. DAL is attempting to enter the new paradigm by mixing the hubbing with the JetBlueing. Not more RJ''s. I predict DAL will ease out of hubbing very quickly. Their management sees the shift. And they are attempting to do something about it. BEFORE they have the cost cuts.

We have no leadership. No business sense. And not a clue of how to operate in a post 9/11 environment. A true shame the expert cost cutters can''t figure out what to do with the costs they cut. Hopefully the BOD will recognize the ineptness of Dave and Co. before it is too late.

mr

 

[thepoohbear]

I heard our marketing dept new program will have our ads on the sides of milk cartons.
HAVE YOU SEEN THIS AIRLINE?

 

[wench]

Flts are full,but we're not making money is "their favourite line"!

Well that's crap..Even the RJ's are full....Clt flts OVERSOLD.

I board em up and they ARE NOT ALL FREE TCKETS"!

Same old song-let's hear a different one boys!

I'm not playing to your crock of crap..nor am I dancing to your fiddler's tune!

Happy Birthday America!

 

[Tango-Bravo]

Whatever happened to the illustrious "genius" (Siegel) who was sure to turn USAirways into the "template" for successful turnaround to be copied by the other legacy airlines? That was what we heard from the masses at US who couldn't wait to cave in to the draconian demands of Siegel & associates.

Never mind that airline execs routinely condone bait-and-switch tactics on your customers -- they certainly wouldn't do the same to their employees... would they?

Back to the subject at hand, it looks to me like US and the other cartel airlines (or so they try to behave) are proving an axiom to which an exception cannot be cited: no airline has shrunk itself back to profitibility. Less ASMs means a smaller base upon which to spread fixed costs, meaning CASMs go up. There are cases in which airlines have hung around a while longer through shrinking and raping their employees, but it has never proven to be a lasting solution.

As for the decline in business travel alleged by deluded minds like the Baldanzas of the airline world, it's largely a case of business travelers being counted as leisure travelers. In their ongoing revolt against the absurd fare structures obviously aimed at gouging them, business travelers have increasingly perfected the art of beating the airlines at their own pricing games, which means they are no longer seen by the airlines as business travelers.

Oxymoronish as it may sound, higher load factors will probably work as a detriment to the would-be cartel airlines. Load factors going into the Summer travel season were at an unwieldy level to begin with; higher load factors seem to have further reduced service quality and the overall experience (long lines, crammed airplanes, "customer service" delays) to a point where customers will be more inclined to find other ways to reach their destinations or simply stay home -- unless the airlines offer loss-leader fares travelers cannot afford to refuse.

Since the arbitrary post-9/11/01 cutbacks by the cartel airlines, chartering and time sharing of private aircraft has skyrocketed among business travelers and -- surprisingly -- leisure travelers as well. The main reasons given by those who have made the switch from commercial airlines are reduced stress and hassle and time savings -- not necessarily cost savings. Load factors even higher than those that have already driven many of the airlines' "best customers" to seek other means of travel will drive even more passengers to do the same.

The disconnect between load factors and profits reported by the cartel airlines is, IMO, a fulfillment of yet another axiom: you will reap what you sow, more than you've sown (as in "sow to the wind, reap a whirlwind"), long after you've sown. The network/cartel airlines are now feeling the pain caused by what they have sown since the mid-late 1990s -- even though they seem oblivious to why it is happening. In many ways they even continue to sow in the same manner that brought about what they are now reaping.

 

[rvolkcpa]

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On 7/3/2003 9:24:28 PM AIRMAIL wrote:

It appears to me that the public is out there and wants to travel. Now is the time for U`s Marketing Dept. to get to work. Upper mgmt should also take a look at the fare structure to better compete with the low cost guys. But all we hear is we need more cuts and you are not going to get your 5% back. U needs some new leadership that wants to lead this company. This leadership was brought in to get us through bankruptcy and now we are out. They have not proven they can run an airline or that they want to either. We should be adding mainline flights and not cutting back. Let`s start setting the pace and get aggressive in getting more pax/s flying U.

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The public wants to fly, but connecting thru PHL, PIT or CLT can take twice as long as a nonstop flight on another airline. It''s time for US Airways to gradually restore some of the point-to-point flights that were cut, if management wants to retain existing customers and attract new ones.