luvn737s said:
No, they don't have high-rasm traffic because they operate out of low-casm hubs, regardless of WN. Air Tran and Frontier have higher RASM because of their hubs, primarily. There will be many routes where HPU won't overlap with WN, but even where they do, the CASM gap with WN will diminish.
Well, CLT is a "low-casm hub" according to some -- how does US manage to get high RASM there? AirTran's RASM was 1.2% higher than WN's in the first quarter (8.32 cents vs. 8.22 cents) and their revenue yield was actually 2% lower (11.80 cents vs. 12.03 cents). Frontier's RASM (according to their March traffic report) was 7.87 cents while yield was 10.66 cents -- these are both lower than Southwest or AirTran. Conclusion: the hubs don't mean higher RASM.
How do you think you get a fuel hedge without credit?
Fuel isn't US Airways' (or America West's) only problem. And they need cash, not credit, to enter into fuel hedges.
Oh, really? To accomodate WN. As it has done, where else??
As when they took two underused gates in the D Terminal away from US Airways last year. And arguably it makes sense for two reasons: (1) More WN service means more revenue from landing fees, PFC's, parking, etc. for the airport, not to mention lower fares in more markets and (2) WN already has significantly higher utilization of its gates at PHL.
I think you would be surprised by HP's yield management.
Surprised by what? A profit? They generally don't achieve a RASM premium of more than about 10% over WN in markets where they compete head-to-head, and this is only achieved by being willing to accept WN taking 70-90% of the market in most routes under 750 miles.
HP's trans-con yields are dismal. WN has better yields on BWI-OAK and BWI-LAX than HP does on BOS-SFO or BOS-LAX.
Nor should it be. WN doesn't go there (although they claim they do) so why dilute yield.
Short-term this strategy sort-of makes sense; that's why US continues to keep fares at nose-bleed levels in many markets. Long-term, fare gouging attracts LCC's to your markets. Delta's SimpliFares are an attempt to make their own key markets look less attractive to LCC's.
Delta still has higher labor costs, structural inefficiencies and far lower fleet utilization, so aside from the unrestricted fares, I don't see any comparison between HP and DL.
Agreed -- so unless they manage to stay out of bankruptcy, they'll be bringing labor costs down just like US did in about a year. And WN's employees will still be paid more and have higher productivity.
