Mike Boyd Makes No Sense

[Rico]

Mike Boyd makes no sense, here is a link to his recent predictions for the upcoming year in airlines.

Aviation Predictions 2005

I do not get it.

He thinks US Airways is a "goner" on one hand, but then you read through everything he writes, US Airways does not seem to be in such a bad position afterall...

For example -

- Things like the LCC's growth slowing, costs rising, fight for brand loyalty...

- Indy Air's troubles...

- Or how the Southeastern US is such a growth market, yet no mention of how well positioned our hub in CLT is for that. No mention of the possible Star Alliance connections to Asia and the EU...

- How great the new EMB-170/190's are, but no mention that we are the ones leading the way with the use of, and one of the only legacies with scope that allows the larger models to be placed either...

- Mentions the "Legacies" getting their costs down, but takes no notice that we have led the way in that regard...

- Claims small jets (50 seats and below) are past their prime, while we have the fewest of any legacy, and only own a reasonably small number of our own, can shed a contract or two in BK, and have already steered towards larger and more profitable 70/90 seaters instead...

No, what Mike Boyd says about us makes no sense, until you remember that he is a consultant first and foremost. Meaning he is a "gun for hire" when it comes to his viewpoint. And it tends to be pro-union (clients), pro smaller market airports (clients), and so on...

Too bad he is so biased, some of his points make sense. But I am sure that is like the pot calling the kettle black eh...?

No, I think I will read between the lines of what he wrote, and see that US Airways has a brighter outlook than he (or many others) are willing to admit.

 

[USFlyer]

Mike Boyd will say whatever it takes to be quoted in every major newspaper. He lost credibility with me many moons ago, as did Holly Hegeman.

 

[jimntx]

Mike Boyd makes no sense, here is a link to his recent predictions for the upcoming year in airlines.

Aviation Predictions 2005

I do not get it.

He thinks US Airways is a "goner" on one hand, but then you read through everything he writes, US Airways does not seem to be in such a bad position afterall...

For example -

- Things like the LCC's growth slowing, costs rising, fight for brand loyalty...

- Indy Air's troubles...

- Or how the Southeastern US is such a growth market, yet no mention of how well positioned our hub in CLT is for that. No mention of the possible Star Alliance connections to Asia and the EU...

[post="243122"][/post]​

I'm not taking sides here, but it's one thing to say that all these things are going to happen which might benefit US Airways. It's another thing entirely to say that US Airways will take advantage of those events. I think US Airways management has "lost credibility" with Mr. Boyd.

It's like saying that DL pulling out of DFW will automatically benefit AA. Maybe, maybe not. It depends on whether or not someone else fills the gap, and who that someone is.

 

[Rico]

I think US Airways management has "lost credibility" with Mr. Boyd.

Well, IMO that might be because they used other consultants than Boyd Group. But you would have to write and ask him.

All I am saying, is that IF he predictions are more or less true (and he has had a decent track record in that regard), then it makes little sense that he forsees the downfall of US Airways on one hand, while on the other hand predicting things that would help our outlook...

I noticed that he has covered his bases by stating "unless somethng changes".

 

[jimntx]

Well, IMO that might be because they used other consultants than Boyd Group. But you would have to write and ask him.

I noticed that he has covered his bases by stating "unless somethng changes".

[post="243136"][/post]​

Well, no wonder Mr. Boyd has no faith in UAIR! Nothing gets you a bad rating from a consultant than signing a contract with his competitor. It's a clear sign of bad management decision-making.

Covering bases is a well-known past time in this country. It's like saying the coming elections in Iraq will bring democracy and peace to the Middle East. (Unless, of course, it brings civil war.)

A consultant is someone who steals your watch in order to tell you what time it is. (I ought to know. I was one for 20+ years.)

 

[Rico]

IMO it comes down to where he predicted US Airways would be toast by now, and like many he was wrong, So he does not want to change his tune.

 

[DLFlyer31]

- Things like the LCC's growth slowing, costs rising, fight for brand loyalty...

LCC's growth isn't slowing. JetBlue, Southwest and Airtran all plan to pick up somewhere in the range of 25 - 35 new aircraft this year (with no retirements). Excluding fuel, costs at the LCC's are not rising. They are either stable or declining.

As for brand loyalty, it is dying at all the legacies. None of them have been able to deliver enough value to inspire real brand loyalty. They just keep flooding the market with frequent flyer miles in the hope that they can cling to their customers.

- Indy Air's troubles...

In another article, Boyd did address Indy. It's collapse will have minimal benefit for US. US was hemorraghing cash long before Indy was ever heard of.

- Or how the Southeastern US is such a growth market, yet no mention of how well positioned our hub in CLT is for that. No mention of the possible Star Alliance connections to Asia and the EU...

The Southeastern US is a growth market, but I'm not so sure US is really poised to take advantage. Throughout the Southeast, US has been steadily shrinking. Many markets have gone from 737's to RJ's. US keeps slashing capacity which undermines the effort to cut costs.

- How great the new EMB-170/190's are, but no mention that we are the ones leading the way with the use of, and one of the only legacies with scope that allows the larger models to be placed either...

US might have an advantage with the EMB's, IF they use them correctly. If they are simply used as mainline replacement...US won't realize many benefits. If they are used for new routes and to replace smaller RJ's, then they have a greater potential.

- Mentions the "Legacies" getting their costs down, but takes no notice that we have led the way in that regard...

You have? Despite your first bankruptcy, you still had some of the highest costs in the industry. What makes you think this time is better? As you well know, labor cuts alone won't save US (or any other carrier).

- Claims small jets (50 seats and below) are past their prime, while we have the fewest of any legacy, and only own a reasonably small number of our own, can shed a contract or two in BK, and have already steered towards larger and more profitable 70/90 seaters instead...

US might have an advantage here. But as I mentioned before, that's only if the EMB's are used correctly. If US simply uses them to replace mainline in many markets, it won't work. If US insists on using smaller EMB's against other carriers 737's, A320's, etc...it won't work. The bigger planes will have a lower CASM (remember you're not the only carrier cutting costs).

I don't agree with many of the things that Mike Boyd says, but your analysis is certainly no better than his.

 

[Rico]

The LCCs are looking at a slowing of growth opportunities. There are limited markets where a 737-700 can make money. Lots of markets, to be sure, but they're still limited...

There is his quote. He wrote it sport, not me...

But he is right IMO, and that is why JB is getting the EMB-190's to allow profitable service to a larger variety of markets, just like AirTran is doing the same adding larger aircraft with longer range to their fleet...

As for INDY, you are right, not having someone around offering 49$ fares all the time will have no effect whatsoever

As for the EMB-170's, IMO the company has left behind the Dave Seigel idea of using the E-170's to replace mainline (out of places like PIT) in favor of using them to add service or add frequency into strong markets. Our competition will have a tough time countering such with CRJ's or ERJ's... or running a half empty narrowbodys (if able to find a avail. slot).

As for our costs, they are now 1 Billion dollars a year cheaper, and that number continues to grow with changes, closures, and new agreements being made on almost a daily basis.

So yeah, I think we are leading the way, Sure, Delta dropped "crew meals" to save a few bucks too, but I think that hardly compares to our efforts pal.

US has been steadily shrinking. Many markets have gone from 737's to RJ's. US keeps slashing capacity which undermines the effort to cut costs.

Geeze, look who is talking, DAL is stuck with so many RJ's they have no choice but to use them on routes they are not well sutied for. DAL is pulling out of DFW, while we are building up the CLT hub, so I think that our presense in the SE is going to grow, not shrink... Not to mention our plans in FLL either, that will have a strong effect on our SE market too.

We are not slashing capacity anymore, rather gaining increasing capacity from increased utilization. That will cut our costs, while other legacies are stuck with a glut of aircraft and assets, we are not.

US Airways has a long way to go to reach our goals, but we are headed down that path. In time, even guys like you and Mr Boyd will have to accept that fact.

 

[Light Years]

I'd like to see the 170 used to open up new (well, return) markets as well- AUS, SAT, ELP, COS, ABQ, OMA, LNK... they are great aircraft to stretch the Charlotte hub.

Rico, how many 50 seaters do you think US needs? Not all markets and frequencies will support 70 seats, but there isn't a need for an "armada" of 50's either. I'm just curious how many would serve a purpose in the system.

I still think US should be brave and refurbish the Dashes to identical CRJ interior, soundproof them, and custumers would never know the difference if marketed properly (jetways etc). The silver lining to US lagging in the RJ madness is that they are not stuck flying 37 seat jets unprofitably. If kept up nicely and marketed the right way, the Dash 8 and CRJs would be the same product to the customer. Between the two Dashes and the larger and smaller CRJs, we could provide a consistent product between 37-70 seats in Express markets. In larger markets the 170-195 family would be consistent in the 72-100 range.

 

[mweiss]

LCC's growth slowing

Because of an inevitable end of markets supporting 125-seat aircraft. What's left is not enough to support US.

costs rising

But remaining lower than the legacies. WN's potential troubles start to surface in 2007, when the hedges run out. Will the other LCCs have a cost advantage over WN at that time? If so, how will head-to-head look among them? This is an interesting question for US only if US is able to hang in there for another couple years. That's a pretty massive "if."

fight for brand loyalty...

Funny thing about brand...it's a hungry beast. US Airways has a negative-value brand in much of the country. Don't believe me? Ask people in California (the nation's most populous state) what they think of US Airways.

Indy Air's troubles...

The very troubles that reinforce the dire position of US Airways: low fares and RJs do not mix.

Or how the Southeastern US is such a growth market, yet no mention of how well positioned our hub in CLT is for that.

Perhaps because ATL is a much better positioned hub for most of the nation's traffic to and from the southeast?

How great the new EMB-170/190's are

There was no mention of how great they are; just a mention that there's a lot of them being ordered. The two statements are not synonymous.

Mentions the "Legacies" getting their costs down, but takes no notice that we have led the way in that regard...

Moving the farthest is not as remarkable a feat when you have farther to go. US has had much lower-hanging fruit than the other legacies.

Claims small jets (50 seats and below) are past their prime, while we have the fewest of any legacy

You also have the smallest fleet of any legacy, period. What matters is not the number of these jets; it's the percentage of the ASMs served by these jets. In that metric, US is not looking good.

 

[ISP]

he is an idiot

 

[Rico]

Well, I have to run an errand or two before I address MWeiss, but I will quickly talk about my opinion on the 50 seaters.

How many do we need. Well, IMO just about the amount of CRJ's that PSA owns... Otherwise I think those routes are better handled by a Mainline aircraft, a MDA aircraft, or by a DHC-8 in most situations.

IMO RJ's are just like the Dash 8, in that they are well suited for a soft route of a duration of an hour to an hour and a half. Obviously that is a greater range in the RJ's than dashes,so that is why you need some RJ's for some of the routes. I think you get the idea. Anything longer than that and the passengers get real uncomfortable in a hurry, and the load limiations of the ERJ's in particular start to cut into the payload (with weather or delays factored in)

IMO they are better used out of CLT for now, as we compete with the CRJ's of DAL and NWA, and because many of those markets fit inside the 1 to 1.5 hr range. I thin that for the time being that LGA and BOS are also decent places for the same reasons (at least unitl we get additional 70 seaters)

As for the Dashes, I admit I am biased..., But the lease rates and fuel cost comparison to RJ's is so low nowadays, that you can swap out some of the old 37 seaters (like they are doing) for newer, quiter, faster, and nicer 50 seaters for pretty much the same costs, and use them on the really short haul markets rather than a jet (ABE-PHL, CLT-GSO, so on...) Horizon has proven the use fo the DHC-8/400 to be successful, so if an opportunity to obtain those cheap arises, I think that they would serve well into certain markets (like PHL-ISP for example). I think the time has also come to upgrade into these cheaper DHC-8s, and leave behind the 19 seaters, J-41's and S-340's.

But, I still think the most important issue for "Express" to concentrate on, is to maintaining our lead in the E-170 markets for now...

 

[Rico]

Uh oh, the board is doing that strange double/triple posting thing again... :blink:


**Edited duplicate posting**

 

[Bob Owens]

Rico,Jan 28 2005, 05:09 PM]
Well, IMO that might be because they used other consultants than Boyd Group. But you would have to write and ask him.


Yea well I suppose it could have nothing to do with the fact that the company has floundered in BK for over 2 years, alienated its employees with several rounds of concessions, with mainly older workers who are simply trying to ride it out to retirement remaining, and still has not come up with a plan to make the company profitable.

USAIR is history, the heart just doesnt realize that the brain is dead.

 

[Light Years]

As for the Dashes, I admit I am biased..., But the lease rates and fuel cost comparison to RJ's is so low nowadays, that you can swap out some of the old 37 seaters (like they are doing) for newer, quiter, faster, and nicer 50 seaters for pretty much the same costs, and use them on the really short haul markets rather than a jet (ABE-PHL, CLT-GSO, so on...) Horizon has proven the use fo the DHC-8/400 to be successful, so if an opportunity to obtain those cheap arises, I think that they would serve well into certain markets (like PHL-ISP for example). I think the time has also come to upgrade into these cheaper DHC-8s, and leave behind the 19 seaters, J-41's and S-340's.

But, I still think the most important issue for "Express" to concentrate on, is to maintaining our lead in the E-170 markets for now...

[post="243191"][/post]​

I agree, except I think the EJet family should be branded as mainline and the DH8/CRJ as Express (or something snappier).

US should look closely at Alaska and how they use the Dashes and RJs. For the core of the US system, 50 seat Dash 8s provide the same customer experience as the CRJ at better costs. The jets would be used on longer- thin routes like CLT to smaller midwest markets.

I'm all for consistency. If a route supports 70 seats at some points during the day, but only 40 at others, that would be a Dash/CRJ market. If it supports 70 throughout the day, but at other times 90, it would be an EMB market. Of course, anything over an hour and a half should be on the EMB anyway- no one should have to suffer those CRJ seats for longer than that.