MIA new focus city...

[tadjr]

What's that supposed to mean.

All of our planes are currently being used and we dont have plans (known, at least) to get many more to be able to offer the service levels needed to compete with AA in MIA. 1 plane or 1 flight a day isnt going to cut it on many routes if you want to compete.

 

[BoeingBoy]

LCC's cost are in line to compete anywhere.

Actually, probably not yet though we'll find out for sure when the 1st quarter numbers are released.

Based on the latest guidance given, it appears that our mainline CASM will be about 11.5 cents. AA came in at 10.91 cents, CO at 10.35, WN at 8.7 (if they paid what we do for fuel it would be about 9.5), and B6 at 7.84 cents.

Jim

 

[US1YFARE]

All of our planes are currently being used and we dont have plans (known, at least) to get many more to be able to offer the service levels needed to compete with AA in MIA. 1 plane or 1 flight a day isnt going to cut it on many routes if you want to compete.

That is exactly what I meant. US can barely offer the service they need to offer because of the lack of planes--there is no way they could compete against AA. AA has no competition in MIA. AA has no competition at DFW. What other carriers have fortresses like that? Oh, right, US did have PHL and BWI and PIT, but not anymore....AA doesn't run away...they shoot to kill.

And even though AA's costs may seem high, they have DFW. The fares to DFW go up up up up every year. I've been paying $1300 from PHL-DFW for a coach ticket this year.

 

[ALCARLOS]

Actually, probably not yet though we'll find out for sure when the 1st quarter numbers are released.

Based on the latest guidance given, it appears that our mainline CASM will be about 11.5 cents. AA came in at 10.91 cents, CO at 10.35, WN at 8.7 (if they paid what we do for fuel it would be about 9.5), and B6 at 7.84 cents.

Jim

Any idea why the costs are still much ahead of the competition? The salaries still play a part?

 

[BoeingBoy]

Well, salaries always play a part since they're an expense that goes into CASM. But with what the salaries are, I doubt they play a part in our higher CASM.

The guidance was for mainline CASM ex-fuel to be between 7.5 and 7.75 cents vs actual 7.51 cents in 4Q05. In that quarter, fuel related expenses came to 3.5 cents per ASM.

Other than fuel, which affects both East & West, there are some of the "shrinking to profitability" factors - these are 4Q05 vs 4Q04:

East employee cost was down 26.89% in real terms but only 22.4% per ASM.

Aircraft rent was down 2% in real terms, but up 13% per ASM.

Maintenance expense was up 2.5% in real terms, but up 18% per ASM.

Anyway, you get the idea...

Oh, and fuel was up 32.98% in real terms, but up 52.99% per ASM for East.

Jim