Why Can''t US Do it Too?

Bradly71

Advanced
Aug 20, 2002
141
2
As I am about to celebrate my one year anniversary of being laid off, I am a bit out of the loop aside from what I see and read on here. I have seen all over the chat rooms and message boards today about the new DL low cost carrier Song that will operate out of LGA and initially run to FLL. What is it they can do that JethroJet didn''t? I realize the problem with MJ wasn''t the service or equipment, but as with everything else.. it was the fare strucure. Song plans to compete with JetBlue in that arena by having only 4 fare types. Had MJ done that it would still be around today and making money. So has there been any talk about increasing the US service in the LGA/BOS/DCA to FLL/PBI/MIA markets? I worked in the IND Res office and we did the MJ reservations, those flights were always full, even in the summer. We often said they should pull a 757 or 767 and paint it red and fly them instead of the 737''s. I''d be very interested in hearing if anyone has heard anything on the subject.. thanks~!
 

sfb

Veteran
Aug 21, 2002
771
1
www.usaviation.com
My view on Metrojet vs. Delta Express vs. "Song" is that there are/were several vital differences between US's low-cost carrier-within-a-carrier and Delta's.

I believe one of the key differences relates to the hub structure of the two airlines. Delta has ATL, US has CLT. Before 9/11, ATL was operating at or near capacity. Delta was, in part, using capacity at its smaller hubs like DFW to reduce some of the load on ATL. DL Express flights operating point-to-point also reduced traffic flow through ATL, freeing up seats for higher-margin connecting traffic or O&D traffic through that hub. Compare that with CLT. US Airways' O&D traffic at CLT was 21% of the size of DL's O&D traffic at ATL in 2001. In order for the hub to be viable and to offer a schedule with frequent departures, US Airways can't afford to siphon much traffic away from CLT. To put that into perspective, demand from CLT to/from BOS in Q2 2002 was roughly 175 passengers each way -- enough to justify roughly two daily A319's just for O&D (compare this to 8 daily round-trips on the route). Demand between BOS and ATL was nearly 1,040 passengers each way per day. When US Airways was overflying CLT with point-to-point Metrojet flights, the flights into the hub were drawing fewer passengers, making them less profitable.

Another key flaw in Metrojet was strategic. IMHO, it was initially viewed as a loss leader to slow Southwest's East Coast expansion and to protect market share in the Washington/Baltimore area. I believe that was a grave miscalculation, given Southwest's dramatically lower cost structure and what was clearly a long-term plan to build a major operation at BWI. WN was in a position to make a profit even while directly competing against a money-losing Metrojet, and would have been able to do so indefinitely. And, moreover, US ended up competing against its own mainline operation, both for connecting traffic and by causing spill from PHL to BWI.

Metrojet also lacked a consistent strategy. Management bounced it in and out of routes with flights to places like MKE, SYR, etc. -- in some cases, routes with little to no low-fare competition.

As for the 757's -- today is a bit different than three to four years ago. At the time, US actually didn't have many aircraft aside from the 757's which were suitable for the higher-density long hauls to the West Coast; the addition of the A320's/IGW A321's has helped in that respect. And the 767's were needed for the transatlantic routes, of course.
 

757fixer

Advanced
Aug 20, 2002
226
2
A big problem with Metro Jet was the airplanes they chose.They were 20 year old gas hogs with questionable reliability.We used to joke that they should have been painted U.S.Mint green.Just about every time one rolled up to the gate you got a thumbs down from the crew.A lot of mechanics made a lot of money on them.A much better choice would have been 300's and 400's.
 

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