What I find interesting is that US Airways will increase service in PHL and PHX and Southwest is cutting service in these markets. What those interested US Airways' success need to realize is that with the pilot contract minimum fleet count, minimum block hour requirement, and recent Transition Agreement minimum block hour grievance victory, the LGA, BOS and LAS ASMs will be transfered to PHL, DCA, CLT, and PHX. Next year the company's ASMs will be flat with a slight increase in international ASMs and a decrease in domestic ASMs.
Do I like the crew base closures, markets eliminated, and furloughs? No, but I understand the logic. That does not make this any easier on those employees affected by the restructuring. What both Southwest and US Airways are doing is re-deploying assets to cut CASM, increase RASM, and improve earnings. Is that not what management and its employees should focus on?
For example, I was recently told the LGA terminal lease and maintenance expense is $71.5 million per year and when the Delta Slot Transaction is complete the LGA lease and maintenance expense will drop to $4.5 million per year, which is a $67 million per year savings.
Furthermore, the House and Senate have legislation headed to Conference Committee that is expected to lift the DCA perimeter rule in 2010. Once this occurs Doug Parker indicated in a recent Crew News session that US Airways will fly from DCA to West Coast cities, which is expected to further increase the company's RASM.
As far as Southwest moving assets to other markets and away from US Airways' key operations last week the following article was posted on AOL.
Wall Street airline analysts loved the details US Airways executives dished out Thursday to support their optimism that business finally appears to be getting better.
One called the figures President Scott Kirby rattled off to show improving business-travel demand and airfares "refreshingly blunt."
Dan McKenzie of Next Generation Equity Research thinks the executives left out an important factor behind the airline's bullishness: flight cutbacks at rival Southwest Airlines.
US Airways is able to more easily raise ticket prices at two key hubs, Phoenix and Philadelphia, he says, because Southwest is making significant capacity cuts there. The airline isn't growing this year for the first time because of the recession but it has been aggressively starting service in new markets such as Minneapolis, Boston and New York by cutting flights at existing airports.
In Phoenix, McKenzie said in a report Friday, Southwest is offering 10.4 percent fewer non-stop seats each week to cities where it overlaps with US Airways. In the first three months of next year, it will offer 6 percent fewer seats on the same basis, McKenzie said in a report. US Airways and Southwest dominate Sky Harbor International Airport, carrying nearly three out of four passengers.
The Southwest cutbacks on overlapping routes are even greater in Philadelphia, according to his research.
Southwest has 20 percent fewer non-stop seats per week out of Philadelphia to cities where it overlaps with US Airways. In the first quarter, the cut is 22 percent.
At both hubs, the Southwest cutbacks on non-stop routes where it competes with US Airways are significantly higher than overall flight cuts at the airport and US Airways' cutbacks.
"It's really Southwest's capacity cuts in US Airways' markets that give us the confidence that revenues are in fact improving for US Airways," he said in the report.
He said Tempe-based US Airways has one of the better competitive dynamics in the industry right now.
Speaking of Southwest I understand many Southwest Captain's are now being downgraded back to First Officer as the Texas-based company downsizes.
Regards,
USA320Pilot
