Where's The Growth From Efficiency

[PITbull]

The stage length of the a/c is to increase by approx 1.5 hours more per day.

My take, the fares are not sustainable. The company can not extract anymore cost savings from labor, or non-labor.

The only other thing they can do is take out first class, add more seats, and ditch ITD flying.

But, again, I believe the company is floating now, just looking for an investor or merger.


If I were in marketing, I would start a program where if you have fares that are less than $200 round trip, there should be no FF miles granted.

I have over 100,000 Hilton points, and no matter when I want to use them, I always get a song and dance when I go to cash them in for free overnight stay. They tell me, oh, but this is a black-out time for this city". Or, they say," the rooms that are "blocked" for Hilton club members are all full"...blah, blah, blah. I have never been able to cash any of these points in for overnight stays.

Only our industry do customers get loads of FF miles and can cash them in any time. Did you know that 57% of the FF miles are obtained by not flying, rather by car retals, restuarants, credit cards, etc....

If a customer spends above $200 round trip, than FF miles are granted to the customers account.

If a customer spends $600 round trip, they can get a F/C upgrade for future travel, space vailable, and FF miles in their account.

This should be offered as promotional events during non-peak travel times.

But what the heck, that's why I'm labor. Those genius' up there know what they're doing, right?

 

[sfb]

Looking at the Feb schedule for mainline, we took mainline airplanes off routes like PIT-ALB, BUF, ROC, BDL, SYR, MDT, etc and put them on routes like FLL-BOS, EWR, BWI, BDL, SDQ, SJU, SAL, GUA, KIN, etc. So in essence what we have done is farmed out the short haul flying to express and increased the stage length in flying for mainline. Where an airplane used to fly 8 segments a day, it may now only fly 4-5. Thus reducing ASM's, even with the increased productivity.

This honestly doesn't make any sense. The idea behind flying fewer, longer stages per day is to produce more ASM's with the same aircraft, since the planes don't spend as much time on the ground between flights at the hubs or focus cities. For example, a 6-hour flight from PHL to LAX produces slightly more ASM's than ten one-plus-hour flights between PHL and PVD.

Putting the express aircraft on the short flights from the hubs is an attempt to increase yields/RASM in those markets -- NOT to improve productivity. The longer flights should reduce CASM given less time spent on the ground and more miles flown, on average, per block hour, but yields tend to decrease as stage length increases. The yield on a $50 ticket from PHL to PVD is roughly equal to the yield on a $500 ticket from PHL to LAX -- but one is considered cheap while the other is considered expensive.

The fact that mainline ASM's are only increasing about 2% in spite of what are billed as significant productivity improvements (and the returned A319's amount to less than 4% of the fleet) says that the true increase in mainline productivity is probably only in the 6-7% range. Increasing production of express ASM's does not equate to increased productivity.

 

[BoeingBoy]

This honestly doesn't make any sense. The idea behind flying fewer, longer stages per day is to produce more ASM's with the same aircraft, since the planes don't spend as much time on the ground between flights at the hubs or focus cities. For example, a 6-hour flight from PHL to LAX produces slightly more ASM's than ten one-plus-hour flights between PHL and PVD.

[post="245789"][/post]​

sfb,

I know you were talking about another post, but I borrowed your words anyway.....

Supposedly, average daily utilization is going from 10.5 hours to 11.5 hours - that's a 9.5% increase. Now it could be that the extra utilization is providing an extra 1 hour (block time) flight per day for most of the aircraft, so the increase in "productive" time when ASM's are produced would be less than that - say 40 - 45 minutes. But I thought the increased point to point flying was supposed to increase the average flight time, so for lack of accurate info, say we'll have an extra 9.5% in "productive" utilization, as well.

Even factoring in the loss of 10 A319's during the remainder of this year - they're the lowest capacity mainline aircraft and won't disappear all at once - we should still see something like 5% or more growth in mainline ASM's this year.

Yet, the company is saying there'll only be a 2% increase - less than the 2004 increase over 2003, a period where the PHL wasn't depeaked and utilization didn't increase appreciably.

Something just doesn't add up and I don't have any idea why....

Jim

 

[funguy2]

OK... Well, a couple of thoughts here...

In the "New CASM" thread, we were discussing exactly this topic... I will go back there and calculate another best guess based on 2% ASM increase... If you recall, I based my assumptions on the 10% ASM increase stated by Baldanza, and then reduced it by the 2-3.5% to accomodate the departing A319's. If there are less ASM's, the denominator will get smaller and CASM will rise...

Boeing Boy... We have been discussing this for a while... Or at least I have... And that is, where did the Transformation Plan go? There was supposed to be increased point-to-point services based on rolling PHL and scheduling at the spokes differently. In essence, adding flights from efficiency. This is not occuring. We've heard announcements about relocated flying (from PIT to FLL, for example) and new E170 flying (new DCA flying), but nowhere has there been a press release saying, "US Airways adds new flights by scheduling more efficiently". That is what I have been waiting for. Again, management actions do not back up what they have told us. They will fool some people and say, "but we opened FLL and DCA", but we know that those flights are not based on efficiency.

Indeed, things are just not adding up the way management predicted... I'll go update my New CASM thread calculation now...

 

[Dea Certe]

Didn't U start its FF plan under Mr. Wolf? And wasn't that around the same time we started the wonderful First Class we used to have? I don't think either was sustainable in the long run unless the merger with UAL had happened.

The FF plan would have brought a lot of loyal flyers to the UAL table, making U, with all its warts and pesky labor groups a lot more attractive. Wolf stood to make a bundle, had it not been for that darn old DOJ!

Flying has just got too complicated for the consumer. It seems to me most just want a comfortable ride delivered as promised at a reasonable fare. It's my opinion this is why SWA is so
successful.

Can you imagine how pleasant it would be for everyone if they just had a little extra leg room, cheerful, competent employees and a fare structure that didn't require an advanced degree in airline economics to understand?

Yeah, yeah, I know. I still miss my go-go boots, too.

Dea

 

[700UW]

Crandal at AA came up with FF plans.

And U had a FF plan before Wolf, Wolf changed it to Dividend Miles.

 

[mweiss]

Crandal at AA came up with FF plans.

[post="246504"][/post]​

Well, sorta. It was during his tenure that AAdvantage was developed, but it wasn't his idea.

 

[PHL]

But what the heck, that's why I'm labor.  Those genius' up there know what they're doing, right?

It's a good thing you AREN"T in marketing, PitBull....

Is it easy for you to look up at a plane of passengers with hatred because they all paid under $200? Well, actually we all know that a small percentage of the seats actually sell for the low/advertised price. Do you just look at them and think "CHEAPSKATES!!"? Because, that's what your post is implying. Screw the frequent travellers.

Look, your management(s) have failed miserably. Don't blame your passengers who, like every true-American, want the best price. If that wasn't the case, then WalMart wouldn't be the WORLD'S largest retailer. And, translated into the airline business, Southwest wouldn't have had so many consecutive profitable years.

And, you're right, a large percentage of FF points come from non-flying activity. But guess what - THE AIRLINE IS PAID FOR THOSE POINTS. When I buy flowers, 1-800-flowers kicks back some $$ to USAirways for giving me those points. When I rent a car, Hertz kicks some cash US' way for those points that I elected to go into my DM account. When I transfer points in from my AMEX Membership Rewards account, US is compensated for them. So, when you say the "geniuses up there know what they're doing...", they actually do in this case. Every bit of revenue helps. This airline would probably be ancient history now if it weren't for the FF program and loyalty of the elite members. But, it's actually remained one of the best FF programs in the industry despite all the other cutbacks. Do you know why??? Because your most loyal fliers would be long gone by now, and you would really be a Southwest or JetBlue.

To the other questions about the origins of the DM program - it was started long before the Piedmont merger, actually. I got my first card in 1988 (during the Frequent Traveller Program days), and the program had already been in effect for some time by then. The Piedmont merger wasn't completed until 1989.

 

[diogenes]

Yeah, yeah, I know. I still miss my go-go boots, too.

Dea

[post="246501"][/post]​

Got any pictures?!?

 

[JayBrian]

US Airways is now celebrating 20 years of Dividend Miles.


http://www.usairways.com/dividendmiles/6855.htm


Celebrating 20 Years of Dividend Miles:

1984 Piedmont Airlines introduced the Frequent Flyer Bonus Program.

1985 USAir unveiled the Frequent Traveler Program and launched the co-branded credit card.

1989 Piedmont Airlines is integrated into USAir.

1997 USAir became US Airways and the program was relaunched as Dividend Miles. Chairman's Preferred status was created.

2002 US Airways began partnership with United.

2004 US Airways joined the Star Allianceâ„¢ network with award travel to over 770 destinations worldwide.

 

[UseYourHead]

Jim,

Does this weeks news about hub depeaking and so on influence your viewpoint at all? In your view, anything positive happening?

Michael,

That was my thought. 2004 ASM's were up 3.5% over 2003, with no depeaked hubs, big push of p2p flights, etc. Sure sounds like the other half of the cost reductions (the TP) have gone out the window.

Jim

[post="245585"][/post]​

 

[funguy2]

Crandal at AA came up with FF plans.

Well, sorta. It was during his tenure that AAdvantage was developed, but it wasn't his idea.

[post="246619"][/post]​

This is rather nit-pickey. This is how our society works... In popular circles, George W. Bush gets the "credit" for 9/11/01, even though this was only 8 months into his presidency and certainly in the planning stages for years, while Clinton had several opportunities to kill bin Laden, as well as deal with increasing al quaida attacks such as the '93 bombing of the WTC, embassy bombings, etc, yet his "reputation" is left untarnished (by 9/11/01 anyway).

(Note: I am not saying W. and his administration are blameless, however this event was not 100% their fault as many would have us believe...)

Crandall gets the credit because he was the boss at the time. It was done under his leadership because he directed the company to invest the time, money, and research into various customer retention programs, like FF, the hub development (retain customers by being able to take them everywhere they go), Sabre (retain people by putting AA's product on the best "shelf") and others...

 

[mweiss]

This is rather nit-pickey. ... It was done under his leadership because he directed the company to invest the time, money, and research into various customer retention programs, like FF, the hub development (retain customers by being able to take them everywhere they go), Sabre (retain people by putting AA's product on the best "shelf") and others...

[post="247191"][/post]​

I just wanted to be sure that it was clear. You are correct that it happened in part because of his willingness to invest in new ideas for making customers "sticky." Crandall's biggest legacies (hee!) at AA came from fostering a culture where thinking outside the box was rewarded.

 

[crusher]

Where is the efficient use of a/c? Yesterday in DCA we had a 733 terminate at 0730 and did not leave again until 2100. How is parking an a/c all day an improvement in efficiency?

 

[a320av8r]

Was it due a maintenance check of some kind?