Close Location Of Hubs

[ClueByFour]

Perhaps Mr Lakefield will succeed with his superior investment Banking background.

As for the the PIT negotiating team. I witnessed Mr. Roddey show up at the PIT club with 4 County Sheriff's in full uniform with weapons as his security detail to meet with the vertically challenged Former Chief Executuve from US Airways who when he left had Mr. Chiames as his "security" detail. Now you tell me who the ego maniac is?

Are people from PIT that dumb? If you're selling it for $9.00 and I can buy the same thing elsewhere for $3.50 where do I give the bulk of my business? Ok so I have a "monopoly Price structure" from PIT, that means I'll pay a premium of $2.00 or a total of $5.50 NOT NINE FREAKIN' DOLLARS.

Don't worry the Steel Industry Will turn around any day now. Who needs that pesky airline anyway, Big Steel will save us!

A few things:

I've personally met both Onoroto and Roddey, and spoken with Roddey at great length. Your characterization of him is brash, overdone, and clearly exhibits a lack of knowledge about the man as both a business leader and politician. You are, of course, entitled to your opinion, but the reason that Allegheny County is not dead broke like the city of Pittsburgh is Roddey. Period. End of story. That entitles the man to any ego he might have.

Regarding the "if someone else is selling it as cheaply nonesense," I'd invite US to try to find a noncongested airport that allows them to keep their connecting structure intact that has equal or greater O&D to PIT, limited LCC presence, and without another major airline as a hub tenant. Newsflash: such a beast does not exist.

Finally, Big Steel has been dead in Pittsburgh for about twenty years, and there are still a few million folks hanging around. I can take that $25 million that US is getting and seed a whole crapload of small businesses and use it to give incentives to big businesses that are not fresh out of bankrupty and whose business plan is worth more than the TP it's printed on to locate in the region. Giving breaks to viable businesses who support the community is a good thing. Negotiating with terrorists is not, and your characterization of the current Pittsburgh metro area is about 20 years out of date, ill-informed, or both.

 

[BoeingBoy]

Tom,

I'll give you that - WN fares will create a relative explosion of O&D traffic at PHL, especially as they expand their route network there.

Unfortunately for PHL, there are three problems that won't go away.

The first is proximity to NYC and DC. Any other hub airport in the country has between 9% and 13% of the O&D traffic going to/coming from one of these two cities - PHL has 1%. This is largely business traffic that could be expected to pay some reasonable fare premium over WN fare levels. This traffic is using alternate transportation at PHL - train and car. This is a documented phenomina.

The second is facilities cost. While I can't point to any data to support this, I firmly believe that PHL is as expensive as PIT on a "per head" basis, maybe more expensive. I base this on local media reports back in the 90's when the construction to connect B & C ticket counter areas was nearing completion - the cost "per head" back then was in the $9 - $10 range. Looking at all the construction that has gone on since, it's hard for me to believe that the cost has gone down.

The third is flight operations cost. Due to airspace, runway, and terminal design limitations, PHL is going to have a higher flight operations cost than either PIT or CLT. Rolling the hub would definitely help, but won't eliminate this problem.

Jim

 

[mweiss]

In order for US to support the rational fares at PHL, they'd probably have to shift to a sort of DL-like model of bigger planes with the same frequencies as today, just to address the congestion issues.

That wouldn't necessarily be a bad idea, as mainline CASM tends to drop as the plane size goes up (as an industry rule, anyway...can anyone confirm that this would be true for US?).

 

[RWerksman]

Let me just throw out one more cranial crispy here in regards to O&D at PIT.

Consider this - the #1 selling car in Pittsburgh for the last half decade or so (4 years I believe, but dont quote me on that) has been the Chevrolet Cavalier.


What the does that have to do with U you may ask. Well...

The average price of a brand new Cavalier is in the $12,000 area. The best selling new car in America is the Toyota Camry, with an average selling price that is nearly $5,000 more.

with that said.....

Pittsburgh is still very much a blue collar town, so it really isnt surprising that a combination of U having in some cases sky-high fares, and CLE and CAK being so close especially limits O&D at that airport. Money is disporportionatly important in Pittsburgh.

 

[ClueByFour]

There have been plenty of media reports that suggest that PIT loses between 250k and 500k boardings/year to CAK/CLE/CMH due to the monopoly pricing structure.

My anecdotal observation suggests that people will go if the price is right: traffic to CHI and NYC was way up when Airtran went to both places, traffic to the west coast went way up when America West came to town (and for a three month period in 2001 when AA dropped fares to all of the cities that US served at the time in the west in retaliation for something US had done).

 

[EyeInTheSky]

Roddey is a jerk. A friend of mine witnessed him at a press conference when the "new" Pan Am came to town. This person said Roddey was bashing US left and right saying he was glad Pan Am and their flight to Gary Indiana would teach US a lot about running an airline. He went on a major rant about US fares, airport domination a bunch of stuff. Then he realized he was in front of several journalists. He then requested that his commentary/rant be left off the record and they were. Typical politician.

 

[RWerksman]

I base this on local media reports back in the 90's when the construction to connect B & C ticket counter areas was nearing completion - the cost "per head" back then was in the $9 - $10 range. Looking at all the construction that has gone on since, it's hard for me to believe that the cost has gone down.

Assuming that costs have not gone down since and factoring in inflation it is reasonable to assume that price per head is above that.

I am going to see if I can confirm the origional figure we are working off of. (LexisNexis is fun)

 

[ClueByFour]

In light of how US has behaved towards PIT since the 11th hour of Chapter 11, was Roddey really that far off the mark?

Truth hurts, perhaps.

 

[BoeingBoy]

RWerksman,

"I am going to see if I can confirm the origional figure we are working off of. (LexisNexis is fun)"

Thanks. I've tried to find something newer but haven't been able to. I don't have the neat tools though.

Jim

 

[RWerksman]

Roddey is a jerk. A friend of mine witnessed him at a press conference when the "new" Pan Am came to town. This person said Roddey was bashing US left and right saying he was glad Pan Am and their flight to Gary Indiana would teach US a lot about running an airline. He went on a major rant about US fares, airport domination a bunch of stuff. Then he realized he was in front of several journalists. He then requested that his commentary/rant be left off the record and they were. Typical politician.

For quite a while there, Roddey was the steward of Allegheny County. I think it is more than reasonable for him to vent about a conpany that despite being needed is gouging (in some cases) his people.


I have met Jim Roddey. I never got the impression that he was a jerk, or in any way negotiated with U in bad faith. He was intellegent, and thoughtful every time despite remotely reminding me of an old fraile woman.


...Im not a Republican and I respect him.