Is Heathrow DL's next destination

[WorldTraveler]

That is true but travel between the US and the UK is the largest air market in the world. Loosening restrictions on the biggest market at LHR will certainly affect some of those markets simply because there will be much more competition for the same number of slots - and US widebody operators will be much more willing to pay for slots than will some "3rd world" operators.

 

[JFK777]

Demand for slots will only get worse beacuse of India and the Middle East. All the new Indian airlines like Jet Airways, Kingfisher & from the Middle East; Qatar, Etihad and Emirates will compete for slots and given the price of oil today, the Persian Gulf airlines have Billions to spend on new airplanes and slots at key airports to land them at. When I here this argument for" third world" slots for sale I think of Africa and south america. From Africa South African airways will not sale its slots, they are to important to South African commercial interests in the UK, Kenya Airways: highly unlikely they would. Nigeria has a few they might part with and then you have the muslim afrian airlines like Egypt Air & Ram that I doubt will.

From South America, their main european gateway is Madrid and Paris is the second destination for most latin airlines, only Varig from Brazil flies to LHR, 3 times a week. Avianca sold there LHR to BA in 2000 and doesn't serve the UK any more. Aeromexico doesn't fly to the UK, they fly to Paris and Madrid. Lanchile serves Mad & Fra with the same flight nonstop from SCL to Mad with an A340. Aerolineas Argentinas serves LGW with a small airplane, an MD-80, based in Madrid as an extension of Buenos Aires - Madrid service which it flies double daily. So the bank of slots to be harvested from poor airlines is lomited and has been traded by those whom wish to.

 

[WorldTraveler]

While I don't disagree with you, you mention about a half dozen of all the airlines that fly to LHR.

The point is also that demand for slots in London as a whole will improve so Gatwick and even Stansted are likely to grow. Nonetheless, you will see at least DL and CO have a token presence at LHR.

 

[magsau]

Delta will be luck if it can fly to London Kentucky when the cutting is done. They are behind the financial 8 ball and with any luck UA will sink them in the corner pocket.

Once we merge and purge WT will be wishing he had played nicer.

 

[luv2fly]

Delta will be luck if it can fly to London Kentucky when the cutting is done. They are behind the financial 8 ball and with any luck UA will sink them in the corner pocket.

Once we merge and purge WT will be wishing he had played nicer.

While I often don't agree with WT, I think that qualifies as the biggets UA coolaid drinking statement I think I have ever heard. :blink:
BTW, when did UA get in front of the financial 8 ball? I must have missed that press release.

 

[WorldTraveler]

All of those folks at UA fail to remember that UA have been in bankruptcy for three years and have yet to report a year's worth of profits but yet they are ready to head out of bankruptcy with the industry's highest unit costs. If I were magsau, I wouldn't be quite so confident in UA's future just yet. Fuel hasn't been at $50/bbl since UA's POR was released yet that is what they have built the plan upon. DL's plan - $67 for 2005 and $60 f0r 2006, amounts much closer to reality. Now who's in danger of extinction?

 

[JFK777]

Worldtraveler,
I mention half a dozen airlines from South America and Africa because that is all worth mentioning. Mention to me what airline from these two continents is so important with a extensive bank of LHR slots and I will be happy to talk to you about it.

A few I didn't mention, BWIA( has a few lHR slots), Air Jamaica( a few LHR slots too), Taca( doesn't fly to Europe), Copa ( only 737NG in the fleet, they can fly to Buenos Aires and Sao Paulo but not the Atlantic), and Ethiopian Airlines( a great airlines with 787 on order and why would it sell its LHR slots). These airlines together operate a decimal point worth of LHR slots. If Air France & KLM sold their slot banks then that would change the LHR slots equation since we are talking about 20 slots daily, I give that next to zero probability of happening.

 

[magsau]

Now who's in danger of extinction?

According to PB YOU ARE!!@!

Read the article yet wt? Get your sping ready slick as the water is rising around the Delta ship.

UA is set to exit and DL is still trying to figure what to do next. Talk to us in three years big guy. You also said many times that DL would never enter BK. Now that you are in you want to attach timeline wagers on length of stay. You and North by Northwest are really a couple of pills.

I say, "Dl in the corner pocket"

 

[WorldTraveler]

According to PB YOU ARE!!@!

UA is set to exit and DL is still trying to figure what to do next.

I say, "Dl in the corner pocket"

After 3 years, you have no choice but to get out of bankruptcy but you're still not profitable. How was the 3 year anniversary party?

I can assure you DL won't be in bankruptcy in 3 years. Stick that on your calendar and we'll discuss it on Sept 14, 2008. Remember, also DL wouldn't be in bankruptcy if the credit card processors had not demanded credit card holdbacks of over $1B from DL which means DL flew for almost a month with no cash coming in to the business. What is even more notable is that DL was the only large US airline that DIDN'T have credit card holdbacks prior to this fall. If UA has been such a well run company for all these years, why were credit card companies holding back your revenue?

 

[ZMAN777]

All of those folks at UA fail to remember that UA have been in bankruptcy for three years and have yet to report a year's worth of profits but yet they are ready to head out of bankruptcy with the industry's highest unit costs.

Okay, lets play nice. Since WT threw out the cost gauntlet lets take a look at where the various players are. From some numbers I've seen from Airline Capital Associates, Inc., here's what we have. (Feel free to refute these, I'm merely throwing out what I see from ACA Inc.)

Operating Expenses 2004 (Cents per ASM)

Flight Crew Costs Total CASM

Delta 1.69 cents 10.45 cents
Northwest 1.39 cents 11.24 cents
Continental 1.03 cents 9.67 cents
American 1.15 cents 9.85 cents
United .95 cents 9.75 cents
US Airways 1.34 cents 10.80 cents
Alaska 1.48 cents 9.91 cents

Another telling measure would be CASM minus Fuel. I'm hearing that United, for 3Q/2005 was at 7.04 cents and heading lower. I don't have that info for the rest of the industry. If someone has it please pass it along.

So there is a bit more light on the subject. According to ACA Inc., it appears that UAL, at least at the end of 2004 had second lowest CASM of the majors and is continuing to head lower. Delta in the meantime is significantly higher and most likely won't see any significant savings due to BK actions till well into 2006. Enjoy.

Cheers,
Z

 

[Vikedog64]

Okay, lets play nice. Since WT threw out the cost gauntlet lets take a look at where the various players are. From some numbers I've seen from Airline Capital Associates, Inc., here's what we have. (Feel free to refute these, I'm merely throwing out what I see from ACA Inc.)

Operating Expenses 2004 (Cents per ASM)

Flight Crew Costs Total CASM

Delta 1.69 cents 10.45 cents
Northwest 1.39 cents 11.24 cents
Continental 1.03 cents 9.67 cents
American 1.15 cents 9.85 cents
United .95 cents 9.75 cents
US Airways 1.34 cents 10.80 cents
Alaska 1.48 cents 9.91 cents

Another telling measure would be CASM minus Fuel. I'm hearing that United, for 3Q/2005 was at 7.04 cents and heading lower. I don't have that info for the rest of the industry. If someone has it please pass it along.

So there is a bit more light on the subject. According to ACA Inc., it appears that UAL, at least at the end of 2004 had second lowest CASM of the majors and is continuing to head lower. Delta in the meantime is significantly higher and most likely won't see any significant savings due to BK actions till well into 2006. Enjoy.

Cheers,
Z

At the end of the 3rd quarter 2005, DAL's mainline costs per mile(ex fuel) were 7.01 cents..

 

[WorldTraveler]

2004 is ancient history in the airline business. for the 2nd quarter 05, DL had the lowest non-fuel CASM of the legacies and well within shot of several of the LCCs.

And, costs are only one component of the picture with revenue and balance sheet being the others. UA's revenue situation is only going to take more hits w/ the announcement that Virgin America is moving forward w/ service and they are particularly targeting SFO because of its lack of low fare service. WN is doing the same thing in DEN. DL is pretty much "bottomed out" when it comes to potential revenue declines; most other legacies are somewhere in between.

All of the bankrupt airlines will come out of C11 w/ relatively decent balance sheets; how well they manage their business will determine how long it stays that way.

 

[ZMAN777]

2004 is ancient history in the airline business. for the 2nd quarter 05, DL had the lowest non-fuel CASM of the legacies and well within shot of several of the LCCs.

Okay, fair enough. Does anyone happen to have the stats of CASM minus Fuel costs for the various majors and LCC's?

And, costs are only one component of the picture with revenue and balance sheet being the others. UA's revenue situation is only going to take more hits w/ the announcement that Virgin America is moving forward w/ service and they are particularly targeting SFO because of its lack of low fare service. WN is doing the same thing in DEN. DL is pretty much "bottomed out" when it comes to potential revenue declines; most other legacies are somewhere in between.[/quote]

Not sure UA's revenue picture is so bleak as you seem to think. If you've been keeping up on the economy in Japan you'll notice that it's poised to outperform Europe for this year and is looking like it'll continue to take off in 2006. This is a MAJOR revenue steam for both UA and NW. A market that DAL hardly makes a dent in.

Again, wishing my pals at DAL nothing but the best.

Cheers,
Z B)

 

[WorldTraveler]

I never said UA is bottoming out. If you've followed my postings, I've said for years that UA has the best franchise in the US industry - perhaps anywhere in the world. And I agree that there is far less capacity being added to Asia than there is to much slower growing Europe.

However, my point is that DL is pretty well bottomed out in terms of low fare exposure across its domestic network. Every major nonstop route from ATL and a number from SLC, NYC, and FLA have direct LCC competition. UA, AA, NW, and CO all have significantly less exposure and will only see their domestic revenue come under attack, even though they all do have very handsome international revenues. Only US is close to DL in terms of the extent of LCC exposure and they have aggressively changed their business model to deal with the LCC exposure they face.

 

[JFK777]

SFO passenger have LCC alternatives from Oakland and San Jose. San FRancisco is similar to London as the main airport is not friendly to LCC operations. In London Ryanair and Easyjet operate from Stansted, similar to Oakland in Bay Area. Virgin America's model is more Virgin Blue then Jet Blue( it does have many JetBlue characteristics). VA is not a barebones operation. I will with anticipation watch and fly VA when I can if it ever get to Florida. San Francisco to Fort Lauderdale would be a great route for VA. Sir Richard Branson always makes it work so It will be a fun operation.