Rico said:
You know, the idea that the company could obtain another 1 Billion in concessions on a third time seemd impossible a year ago too.
But they did it.
Well, it certainly was impossible outside of a second bankruptcy reorganization. The basic problem with the first one was that the company's strategy was exactly the same as before they filed -- just smaller, with more RJ's, with less debt, and lower labor costs. I think folks will remain skeptical until there's a more substantive strategy than more Caribbean flying and offering GoFares when forced to do so by the competition.
IMO there exists as much a chance now for them to retool our organization and route structure to maximize our advantages. Getting out of the "Worst East-West Hub in the Northeast", and instead turning PIT into a good point to point market is a great start (that many on here are way too biased to accept).
You know, making PIT into a point-to-point focus city probably
would be a good idea -- except the company has done anything but that. PIT is still scheduled like a banked hub, and the company maintains a great deal of service into markets which are quite weak on a point-to-point basis. PIT-ERI, for example, operates 4 times daily. PIT-BUF also has four daily flights each way in spite of the O&D market being barely enough to fill a single 19-seater each way. PIT-ROC has four daily frequencies for 11 passengers each way, per day. There are 4 daily PIT-DAY flights for 8 passengers each way per day and 4 daily PIT-AVP flights for 7 passengers each way, per day. And yet they don't fly PIT-IAH or PIT-MSP or PIT-MKE or PIT-JAX or PIT-MCI or PIT-MEM (all top 40 markets from PIT).
Again, I am not attacking the idea of a focus city and point-to-point flying from PIT; I am pointing out that PIT is not, in reality, operated that way. It is, at present, merely a smaller version of the old hub with fewer flights. While this may change in the future, the "focus" at PIT still appears to be connecting traffic. And it appears that mainline flying from PIT drops by another 10% (to 62 daily flights) in February.
Many fail to see the changes in the Northeastern markets, that favor high density point to point flying from larger markets, rather than having our larger aircraft sit around waiting for connections from Altoona, Hagerstown, or Elmira. Costs can be driven down substantially by concentrating upon those markets that can fill planes throughout the day... Making better use of the assets and people we have is what will drive costs down the fastest. And changing our route structure is the best way.
No, there is room aplenty to change the way we do things for the better, and now is the best time.
There's nothing wrong with this strategy, per se; it's just not happening so far. There have been a few new (Express/MDA) flights added from DCA, and flight times are being shifted at PHL, but aside from that I'm finding it difficult to discern any meaningful change in how the mainline is run.
Well, ask DAL, ask AMR, ask the rest of our competition. Would we be able to pull off FLL as easily if AMR was healthy and aggresive...? Would CLT, DCA, LGA, and BOS be as easy to retool if DAL was the 800lb Gorilla of the past rather, than the multi-billion dollar losing animal it is now...?
Well, right now it remains to be seen if US will "pull off FLL." I can book BOS-SAL-BOS Saturday-to-Saturday (peak days) at the end of February for a fare that works out to a yield of 6.4 cents/mile. My
guess is that AA is taking a wait-and-see approach to what US is doing at FLL -- and will respond if it appears that US will make it out of bankruptcy and if the FLL operation is affecting MIA.
As for Delta, it appears to me that the SimpliFares initiative is the more aggressive stance; US Airways' GoFares have been almost exclusively implemented in response to LCC incursion at PHL (WN/FL) and WAS (DH). Delta's out-of-court restructuring seems to be as wide-reaching as US Airways' -- aside from dumping debt and leases. They've added point-to-point flying in Florida and to Florida from the Southeast, have deployed Song on point-to-point routes from BOS, NYC, and BDL to Florida and LAS, as well as some transcon flying from Florida, and are restructuring their network with the shutdown of DFW and rolling the ATL megahub. It appears to me that the expansion of flying at ATL and CVG are designed, in part, to put even more pressure on US.
Can the LCC's grow fast enough to counter our moves without endangering their own cost structures or established expansion plans...? Not really.
Southwest has 29 net aircraft coming this year while jetBlue and Airtran together also have a similar number of (or more) new aircraft coming. Southwest would
LUV to expand more quickly at the "crown jewel" (PHL), but they don't have enough gates, so they'll settle for PIT in May. They were able to add 41 departures at PHL in six months, even while adding roughly 20 flights in other markets. JetBlue has its eyes set on Delta's old gates at BOS when they free up this spring, and they have 15-20 new aircraft (including EMB190's) coming this year. The LCC's will likely add capacity equal to 25-30% of US's domestic flying this year.
Some might look at this as a glass half empty situation, but IMO we have already turened the corner, and can now take advantage of things to turn it into a glass half full situation instead.
Well, I will agree that management has now gotten the cost cuts from labor which they claim to need. But given the company's track record, I believe it is prudent to remain skeptical (though open-minded) about the company's intent to implement the rest of the promised changes to the business. I suppose that makes me a "naysayer" and a purveyor of negative drivel (
NOT DRIBBLE!!!!!), but I'm still waiting for the truly substantive changes to happen. I'm not holding my breath for "systemwide GoFares"
