High Cost Hindrance

[ITRADE]

Usa320pilot,

Why do'nt you get management to adress the real problem here at USairways, which is the HIGH COST of operating RJS? Mainline employees should not be required to subsidize the RJ operators at USAirways!!!! :down: :angry:

Interesting thought. So, what;s your solution here? Running 40 passengers in a 737-300 from CLT it FAY isn't one of them.

 

[unit4clt]

Itrade,

Why do you continue to defend managements MISUSE of the RJS at USairways??
USairways uses RJS to transfer flights from MAINLINE to the RJ operators. The cities like STL,MEM,MKE,SRQ and others support MAINELINE flights. Yet it seems management uses RJS as a means to beat labor over the head.

The use of RJS to small communities is perfectly understandable, I have not read where anyone debating the RJ issue from laors side suggest there is no place for RJS.

I just think that when a business plan is a failure, you need to make a change not continue on the same path. The lack of leadership, will continue to cause mistrust among the workers.

 

[ITRADE]

Itrade,

Why do you continue to defend managements MISUSE of the RJS at USairways??
USairways uses RJS to transfer flights from MAINLINE to the RJ operators. The cities like STL,MEM,MKE,SRQ and others support MAINELINE flights. Yet it seems management uses RJS as a means to beat labor over the head.

Not sure what you mean by misuse. So, to probe, lets take a look at some of the cities that you've mentioned:

MKE: CO flies from three cities - IAH, CLE and EWR. From EWR you've got 4 RJ flights. From CLE you've got 5 RJ flights. From IAH you've got 3 RJ flights. All of American's flights to MKE come from ORD, STL, and DFW. They're all RJ flights. Same with United. US's flight scheduling is not out of line here.

SRQ: United doesn't even fly there. Nor does American. Continental operates one single 733 from EWR and two RJs from IAH.

STL is an AA hub, so no issue there. CO flies three mainline jets there each day and 11 ERJs each day. United splits about 50/50 its jet/RJ service to STL.

So, I'm not seeing the huge discrepancy here.

 

[700UW]

And NWA uses 1-A319s, 2-757s and 3-DC9 on six flights from MKE-DTW.

MKE-MSP uses 2-757, 1- A319, 757-300, 2-DC9 on six flights

MKE-LGA uses 1-A320

MKE-DCA uses A319, and 2-757s

MKE-MEM uses A319 and 2-DC9

So your RJ analogy about MKE does not work when NWA is using Big Jets.

 

[ITRADE]

And NWA uses 1-A319s, 2-757s and 3-DC9 on six flights from MKE-DTW.

MKE-MSP uses 2-757, 1- A319, 757-300, 2-DC9 on six flights

MKE-LGA uses 1-A320

MKE-DCA uses A319, and 2-757s

MKE-MEM uses A319 and 2-DC9

So your RJ analogy about MKE does not work when NWA is using Big Jets.

True, but at least three other majors have made the decision that the RJs are the correct route to take.

And, BTW, can you tell me about NW's service to SRQ by chance?

Again, we can post examples all friggin' day for various routes. NW runs about two or three RJs to CHS - US uses 4 mainline jets from CLT.

The fact of the matter is that US and the ALPA have screwed around on the RJ issue - for years - dallying around with notions of mainline pilots flying RJs and calling RJs "small jets" and other associated BS. Now US is paying the price and playing catch up.

 

[700UW]

And those four mainline jets to CHS and back are usually full. And US could have chosen to do what Air Canada has which is make RJs mainline equipment. I believe your buddy Rakesh had the same idea until he quit.

And if you check all NWA's SRQ flights connect through CVG and are operated by Delta Connection.

 

[ITRADE]

And US could have chosen to do what Air Canada has which is make RJs mainline equipment. I believe your buddy Rakesh had the same idea until he quit.

What a stupid idea that is. Why exacerbate US's cost disadvantage by adding additional costs?

And if you check all NWA's SRQ flights connect through CVG and are operated by Delta Connection.

Well, if you want to accept that flight as a measure of NW's presence, then you'll have to accept US's code share on a United flight as a sign of US's presence on routes.

 

[funguy2]

I researched the CASM of most airlines. Here is what I found. All of these are operating CASM, include fuel, exclude "Express" operations, exclude "Special items", and are not stage adjusted. These are all from Q1 reports, except Spirit (they are privately held, therefore are not required to report publicly). Spirit's is from their website.

Airline CASM
jetBlue 6.08c
ATA 7.34c
America West 7.60c
Southwest 7.82c
Spirit 7.97c
AirTran 8.26c
American 9.49c
Continental 9.49c
Midwest 9.59c
United 10.18c
Northwest 10.23c
Alaska 10.36c
Delta 10.71c
US Airways 11.68c

A couple of things I found interesting:

CO's CASM was noted kind of oddly... They noted 9.76c including a special charge of 0.27c. When you remove the Special charge, the CASM is 9.49c (identical to AA's... hmmm)

Midwest's CASM had come down Year-Over-Year by almost 20% from 11.70c last year. I assume this has to do with employee concessions and adding seats on the MD-80 "Super Saver Service", they are running.

ATA's CASM was 7.34, but their RASM was 6.94c, or a loss per ASM of 0.40. That translated into a $65mil loss for Q1... Just when you thought all LCC's are profitable.

At first look, Southwest's CASM looks high for its peer group. However, their CASM was on an average stage of 600miles or so. jetBlue's CASM was on an average stage of 1300 miles or so. I looked into a UNISYS report which showed Southwest's CASM for Q2 over the last several years adjusted for stage length. It showed that Southwest's CASM at 1300 miles would be less than jetBlue's at 1300 miles, around 5.98c. Also, America West's stage length was around average 1100 miles. That means that where AWA and Southwest compete head to head (like PHX-BWI), Southwest maintains a CASM advantage, even though it does not appear so here... We discussed this in a different thread as well.

Lastly, Frontier has not yet reported Q1 earnings.

 

[700UW]

What a stupid idea that is. Why exacerbate US's cost disadvantage by adding additional costs?

How is it a stupid idea? It keeps the money in the group instead of pouring hundreds of millions into Johnny O's wallet. You negotiate the pay rates with ALPA just as ALL operators of RJs have done.

We pay Mesa or anyone else a gauranted profit on their RJ flying, plus reimburse them cost of fuel, landing fees, ground handling, insurance, lease and then we have NO quality control over them. The costs are gonna be there, why not keep them money inhouse as we would not have to pay a revenue gauranted profit to them and the profits could and should remain inhouse!

 

[TheWatcher]

Interesting thought. So, what;s your solution here? Running 40 passengers in a 737-300 from CLT it FAY isn't one of them.

FAY could have used the heavier lift during the war build up. US has to get better at matching a/c size with demand especially in and out of areas that contain military bases during military campaigns. RJ's are fine when the demand is low, but once it peaks, the equipment size should either increase or the number of daily flights should increase, or both if the market demands it. Does US have people in place to anticipate all of these things or is this one the fault of labor as well?

Any thoughts?

 

[ITRADE]

How is it a stupid idea? It keeps the money in the group instead of pouring hundreds of millions into Johnny O's wallet. You negotiate the pay rates with ALPA just as ALL operators of RJs have done.

Ummm, theres a lot more to a RJ operation than the ALPA wage scale....

I don't see AMR or Continental or Northwest making their RJs mainline craft.

 

[TomBascom]

FAY could have used the heavier lift during the war build up. US has to get better at matching a/c size with demand ...

Any thoughts?

They're so convinced that high load factors are the goal that they don't realize that when the LF exceeds 70 some percent that they're chasing customers away and need to add capacity...

 

[700UW]

Ummm, theres a lot more to a RJ operation than the ALPA wage scale....

I don't see AMR or Continental or Northwest making their RJs mainline craft.

AA and Northwest purchased the RJs, AA owns eagle, CAL owns Express Jet and NWA owns Pinnacle and leases other RJs to their non-owned.

US does not even keep them in the group until recently with PSA.

 

[Light Years]

How is it a stupid idea? It keeps the money in the group instead of pouring hundreds of millions into Johnny O's wallet. You negotiate the pay rates with ALPA just as ALL operators of RJs have done.

We pay Mesa or anyone else a gauranted profit on their RJ flying, plus reimburse them cost of fuel, landing fees, ground handling, insurance, lease and then we have NO quality control over them. The costs are gonna be there, why not keep them money inhouse as we would not have to pay a revenue gauranted profit to them and the profits could and should remain inhouse!

Exactly. Air Canada has mainline CRJS. US is trying to outsource the 70 *cough* 90 seaters.

Lets say for simplicity U had a standard fleet with four pay rates

A332/A333
A319/320/321
E170/175/190/195
CRJ

Four different pay rates for pilots, lets say the CRJ rate is similar to Comair and the EJets to Jetblue.

Flight attendants would be qualified on all but have different work rules dependant on aircraft type, for example, on all CRJ/EMB flights no premium pay, cleaning at all stations etc.

There might be some hidden costs to a single list but look at what costs disappear by merging the ML/WOs into a single carrier.

* Payments to a multitude of different airlines.
* Three seperate owned airlines, each with seperate management, facilities etc performing the same mission. Cuts down on a lot of redundant administrative costs to take care of one company rather than 11.
* Elimination of operational inflexibility (airline x cant fix or staff airline y's aircraft, or fly the route for them)
* No more silliness and inconvienience to customers to make departure fee from US (planes leaving 10 hours late so its not shown as cancelled, control over dispatching aircraft in ways that protect revenue).
* Not a cost issue directly but a single identity and agenda for all employees makes an operation smoother than having different airlines at different hubs ground handle many more airlines each with its own culture, terminology, agenda, rules etc. Big morale boost.
* Quality control. No more complaint letters about employees that US wouldnt have hired in a million years.
* Training costs would go down as there are more oppotunities at a single company and incentive to stay, as opposed to most commuters that are merely a brief, sad chapter in most people's careers.
* Eliminates back and forth scope issues. Company can actually fly appropriate sized aircraft where it wants, and however many without having to worry about scope.
* Can introduce 190/195 on many routes, replacing the 737 with a lower cost, higher comfort, right sized plane that only requires two F/As. Can utilize Airbus narrowbody fleet more appropriatly.
* Discontinue negative "Express" connotation with single branding.
* No worries of anyone pulling an ACA (take your routes, terminal, and passengers and start your own airline) or Midway (stop operating).
* Allows employees and mgmt to help bring thier airline forward rather than spend every day trying to argue that the companys employees should actually staff the place and defend ones job daily.

The list is endless on how much would actually be saved, in money and drama by in-sourcing the flying. With the new "SJs" the lines have been blurred even more, and sooner or later, some airline and its unions and management will agree that a plane is a plane, and an airline cant be run as a franchise.

 

[700UW]

Very good post Light Years, maybe you should replace Ashby.