Us Airways Searches For Cash

[Winglet]

U will NEVER get the casm down to LCC levels unless they mimic the LCC model. U is trying to be an international major hub & spoke airline with all the much higher overhead that comes with that. If they want to get the casm down, they're going to have to stop European service, modernize/rationalize the fleet, and kill all the fee-for-departure giveaways to the regional contract airlines.

They're not doing ANY of that and can't command a revenue premium . . . so . . . adios U.

 

[PITbull]

A merger like this is an explanation of why certain CCY decisions have been made the way they have played out. I've had this idea sitting in my head the whole time. 🙁

[post="261424"][/post]​

I don't want to sound like one of our notorious pilots, but I did state this some time early last year when the talks came down to AFA to have similar wages of America West, which we did adopt.

I said to mark that day, I believe it may have been in Feb. of last year.

Just may happen to finish this deal.

 

[TheLarkAscending]

I don't want to sound like one of our notorious pilots, but I did state this some time early last year when the talks came down to AFA to have similar wages of America West, which we did adopt.

I said to mark that day, I believe it may have been in Feb. of last year.

Just may happen to finish this deal.

[post="261642"][/post]​

Indeed it was February, 2004

 

[justaumechanic]

Lets ask the all important question here.. Are you willing as a group or a company to accept the work rules of the LCC's? Its as simple as that.

Uh....I think the answer to that question was a resounding yes. Subtract fuel, if you can for a moment...and U has the lowest labor cost of ANY major airline in this country. U has a snowballs chance of making it...but do not discount that it is now a turn-key, low labor cost Northeast franchise. I am no Pollyanna, but the chance is there for U to be the model of things to come. Timing and fuel will probabably kill U soon...but if it does not...well, we will all see soon. Best. Greeter.

[post="261635"][/post]​

What is your point about excluding fuel from the CASM? You can't do that.. Everyone keeps coming up with this magic number because they remove Fuel..

Fuel is all part of it.. Like it or hate it.

So lets look at what you are saying.

Southwest or JetBlue with Fuel added have CASM between 6.5 and 7.5 CASM. US with fuel removed is 6.5 to 7.5 CASM. So your point is what?

Lets remove Fuel from JetBlue and Southwest.. What do their numbers look like?

All of you keep yanking out the price of fuel from the CASM.. You can't do that. Everything factors in.. Face facts.. US has another 2 CASM to go before they can hope to match the LCC's..

 

[USA320Pilot]

Justaumechanic:

Just said: “What are you talking about? In your previous posts you quoted the company as saying the revised business plan accounted for fuel in the 45 range. Now you are saying its quoted for the 50 range.â€

USA320Pilot comments: As fuel prices increased, US Airways adjusted its business plan with additional cost cuts and revenue additions to place into the disclosure statement and the POR. Soem of the additional cost cut items were the GE deal to return 10 A319s/15 B737s during a 3-year period, the decision to remove 11 B737s in June, the elimination of San Salvador and Panama City service, more club closures, more outsourcing, the new Chautauqua “fee for service†contract, and the 5 fare increases in 6 weeks. The cuts/additional equal about $13 per barrel of crude oil expense.

The mid-$40 price was for late last year, but the company had to adjust the business plan to higher energy costs to get creditor support.

Just said: “Adjusted cost per seat mile below Southwest!! Your dreaming.â€

USA320Pilot comments: With all due respect, you’re wrong. When the restructuring is complete the CASM goal presented in the new business plan is expected to be below Southwest adjusted for fuel, but higher than JetBlue.

Just asked: “Lets ask the all important question here.. Are you willing as a group or a company to accept the work rules of the LCC's?â€

USA320Pilot comments: ALPA has effectively done that with its new contract. The company’s opener was for America West pay/retirement and JetBlue work rules. ALPA negotiated an agreement that provided the company with a cost cut greater than the “askâ€.

Just said: “How do you expect US to get to 7.50 casm? You know there is only one way. More Pain, More Layoffs. The workforce must be reduced to 18k to 19k. You need to get your headcount down to 85 per plane. The 737's must go along with the 757/767.. To many fleet types.

USA320Pilot comments: Yes, there will be more layoffs and dependent upon fuel there could be more aircraft reductions. We should know more about that after the severance program is fully implemented. A lot depends of the price of jet fuel.

Regards,

USA320Pilot

 

[awayfrmitall]

ALPA negotiated an agreement that provided the company with a cost cut greater than the “askâ€￾.
Regards,

USA320Pilot

[post="261660"][/post]​

What a great union that gives the company cost cuts that are GREATER than they were even asking for.... why didn't they just volunteer you guys to work for free?

 

[whlinder]

I believe United is weaker than America West or Northwest. Furthermore, I would like to see US remain independent.

Well yeah, UA is in bankruptcy.

IfUS Airways merges, I would rather see the company mege with Northwest then America West in that order because the combined business entity would be stronger than with United, unless the Chicago-based carrier can get its costs down further.

You would rather be a company with 5 domestic hubs and barely any international service than one that flies all over Asia and to Australia and South America and LHR? Or one with little west coast service? Sorry, I just don't see it.

the company has a projected CASM below Southwest adjusted for fuel

Are you saying that the CASM for US Airways mainline excluding fuel will be less than Southwest's CASM excluding fuel? If that is what you have meant by all your 'US will have a lower CASM than WN' claims over the past few months, then maybe, just maybe, I can see that happening if the operation is significantly improved. However, adding in any RJs to US' CASM equation will probably push that number above WN's.

I have no idea what is on Doug Parker's mind

Interestingly, former US Airways CEO Dave Siegel and now Glenn Tilton and Doug Parker are both lobbying for consolidation; therefore, it's on their minds.

[post="261558"][/post]​

I thought you didn't know what was on his mind?

 

[ZMAN777]

...March numbers will be much better than February, cash projections are ahead of plan, and May and June bookings are much stronger than anticipated.

[post="261558"][/post]​

The biggest reason March numbers will be better for all airlines is the fact that the Easter Holiday/Spring Break took place in this month vs April last year. That along with a few extra days make a big difference in the numbers. April will be a bit softer although the fare increases seem to have staying power and will undoubtedly help as well. February is ALWAYS one of, if not the weakest month of the year.

Cheers,
Z

 

[RowUnderDCA]

Hmmm.... well, despite the AZ Republic article on Saturday speculating on the US/HP deal, still, NO postings on the AmWest board, here on USAviation.

 

[funguy2]

I believe United is weaker than America West or Northwest. Furthermore, I would like to see US remain independent.

Right now I would not upset the code share apple cart durng a time when every penny counts.

IfUS Airways merges, I would rather see the company mege with Northwest then America West in that order because the combined business entity would be stronger than with United, unless the Chicago-based carrier can get its costs down further.

I'm not sure how you have arrived at your opinion, but here are the facts:

Airline / 4Q04 CASM / 4Q04 CASM ex-fuel
US / 10.96 / 8.79
NW / 11.36 / 8.87
UA / 10.68 / 8.34
HP / 7.98 / 6.00
WN / 7.59 / 6.22
B6 / 6.32 / 4.74

So, a merger with NW seems ludicrous since, at this point, NW (and YX due to their niche) is the only airline with HIGHER CASM than US Airways. This would do nothing to advance the cause of US Airways becoming an LCC. (If you recall, when the 4Q results came out, I called US's removing itself from the highest CASM airline an accomplishment.)

HP, on the other hand, has competitive CASM and a better CASM-ex-fuel then WN. Of course, this is partly due to HP's longer stage-length, and I have seen Unisys score-cards which show that at the same stage length as HP's average stage legth, WN has a much better CASM number.

And of course, I can only assume that an HP-US merger would kill HP's decent CASM numbers.

So, I think a US-NW merger is a ludicrous proposition, based on CASM alone.

I think that a US-HP merger is intriquing. I can see why US wants it (what are the other options? Not good IMO). I am not sure why HP would want it, particularly including US' "warts and all". While HP is in a tight spot, it will probably find a way to squeek by... They've done that a lot lately. A merger with US would kill any ability to squeek by. However, if a third party decided, "hey, LCC's are the way to make money", I can see a third party acquiring both in order to instantly have an LCC as large as WN. However, this scenario would take a great deal of vision and even more cash... And I don't think there is enough of either to make such a merger successful.

 

[KCFlyer]

YOu know, these CASM "less fuel" figures can become quite meaningful if any of the majors start offering scheduled service on gliders. Until that time though, fuel is going to be a big part of the CASM.

 

[funguy2]

YOu know, these CASM "less fuel" figures can become quite meaningful if any of the majors start offering scheduled service on gliders. Until that time though, fuel is going to be a big part of the CASM.

[post="261758"][/post]​

Nobody debates that. However, since fuel is something everyone is buying, CASM ex-fuel is a good indicator of everything else. For example, HP's relatively low wages and higher aircraft utilization are reflected in its CASM ex-fuel numbers. This is particularly helpful when trying to look at the controlable items. For most airlines, cost of fuel is not very controlable because they don't have enough cash with which to enter hedging contracts.

 

[robbedagain]

the "PAINFUL" layoffs will come in the form of these 30 cities being outsourced and for those who want to work for Piedmont Airlines or Jetstream or FSS.

 

[deltawatch]

Tilton comments on consolidation .... "Tilton also said he sees the need for consolidation among the largest network carriers. Excluding U.S. Airways Group Inc. (UAIRQ.OB: Quote, Profile, Research) , also in bankruptcy restructuring into a leaner operations, there are five major network carriers, he said."

"There are simply too many companies doing exactly the same thing," Tilton said. "I think five is too many, perhaps too many by two."

http://yahoo.reuters.com/financeQuoteCompa...11218623_newsml

 

[USA320Pilot]

Talk about America West, US Airways link heats up

See Story

Regards,

USA320Pilot