Pit Fears Mda Slipping Away

[BoeingBoy]

funguy,

I didn't mean to gloss over the advantages of O&D traffic to a hub - merely saying it is an advantage, not a necessity. You are correct in your elaboration of the benefits of O&D traffic to the bottom line.

I find it interesting that the company never mentions the cost per passenger of the "premier hub", PHL. Whenever it was in the mid 90's that the construction was being done to connect the B & C ticket counter areas, the PHL paper had an article that said per passenger costs would be the second highest in the nation - just under the then new Denver airport and over $9 per passenger. Since then A-west and F concourses have been built while the number of passengers has is not dramatically.different. When you throw in the extra costs of even routine flight ops, I suspect PHL is more expensive than PIT on a per passenger basis. And as I said, the yield premium is eroding already (PHL has the lowest yields of the 3 hubs) and that will only get worse. Our "premier hub" is well on the way to being a high-cost low-yield operation.

Sounds like justification for concession demand #?, doesn't it?

Jim

 

[mweiss]

Our "premier hub" is well on the way to being a high-cost low-yield operation.

Hey, Jim, if PHL is so high-cost for US, is there anything particular about PHL's cost differential vis a vis CLT that wouldn't also put margin pressures on WN? In other words, other than the stuff about US that is inherenely less efficient than WN, is there something else that will make PHL cost more to US than to WN for ops?

 

[BoeingBoy]

mweiss,

Presumably, Southwest will increase service in PHL over time to their normal 8-10 flights per gate. This will make their facilities cost "per passenger" lower than ours. Of course, this is happening in PIT also - while our traffic is down, other airlines traffic is up giving them a lower cost per passenger.

On the other hand, as they increase flights, it will be harder and harder to schedule around our banks of flights, causing delays and increasing the costs of flight operations also - and this is on the good days. When the weather is bad, they will get caught up in the Philly Phactor too.

Jim

 

[mweiss]

Presumably, Southwest will increase service in PHL over time to their normal 8-10 flights per gate. This will make their facilities cost "per passenger" lower than ours.

Well, based on gate leases (which is what I assume you're referring to here; please correct me if I'm wrong), 8-10 733/73Gs would be comparable to, say, 4-5 A330s. So more flights per gate alone wouldn't cut it.

Granted, there's the staffing issue associated with lower gate utilization, but that's more what I was covering by the "inefficiencies inherent to US," such as the bursty nature of hubbing, etc.

I guess what I'm really asking is if WN has a sweeter deal in terms of the kinds of fees they pay at PHL.

 

[BoeingBoy]

mseiss,

As for the sweeter deal, I have no idea. I know that many airports offer incentives to attract the LCC's, but don't know about PHL.

You are correct in that 8-10 737's is equal to 4-5 330's - except we don't run 4-5 330's out of any single one of our gates. The international departure time frame doesn't allow that. Additionally, most of our mainline gates in PHL (as in PIT & CLT) are used for 737's and Airbuses - and we average about 5 flights per day per gate. Assuming that we aren't paying more per gate than Southwest, that means roughly 50-100% more per passenger than they pay once they get up to the 8-10 flights per gate.

You are absolutely correct on the staffing issues with our traditional hub system. The structural differences between U and the LCC's are largely responsible for the "poor productivity" that management complains about - it is rarely a workrule issue.

Jim

 

[mweiss]

...we average about 5 flights per day per gate

Which brings me to several questions, thinking along the lines of reducing overhead within the US system.

1) What's the typical turn time for US (both at the hubs and at the spokes)? Does US block different turns for the different A/C types (e.g., more time for 757 than for 737)?

2) Assuming US were to implement rolling hubs, using the same size fleet as today, am I correct in assuming that it should result in reduced staffing requirements in the hubs (my back-of-the-envelope analysis suggested ~30%)? Also a reduction in the number of gates and amount of ground equipment required?

3) And, the biggie: Could the rolling-hub cost reductions alone sufficiently reduce CASM in PHL to compete against WN?

 

[mbmbbost]

PAX don't care where they connect if they have to connect. They'd rather take a non-stop.

This one cares...I never take it for granted that a trip through PHL will go smoothly. I have had too many bad experiences. And US has no nonstops from BOS to anyplace that I go regularly.

 

[BoeingBoy]

mweiss,

1) Can only give you a guess about turn times - at hubs the 737 probably averages an hour or so. At spoke cities varies pretty widely depending - I've seen anywhere from 35 minutes or so up to 1:45. My guess is that the turns for the bigger planes at the huds are not much different, probably not as short as 35 minutes at the spokes. Of course the European (and maybe Caribbean) are a completely different animal.

2) rolling the hubs would result in somewhat less need for gates/personnel if the number of flights were the same. Alternatively you could add flights to utilize the existing gates/personnel with the extra aircraft utilization resulting from the rolling hub. Frankly, I'm not smart enough to quantify either. My personal preference would be to drop gates (the 2 at D concourse come to mind as a start) and utilize the existing personnel to beef up staffing at the other gates.

3) I doubt that rolling the hub by itself would generate the cost savings necessary to get the CASM (even for just the PHL operation) down to Southwest's, but it"s impossible for me to quantify. There are just too many variables and unknowns for my feeble mind. How much fuel, crew time, etc., would be saved by having a more efficient flow of traffic into/out of PHL, how much extra a/c utilization would be generated, etc.

Jim

 

[mweiss]

1) Can only give you a guess about turn times - at hubs the 737 probably averages an hour or so.

An hour for a 737? Wow! That's awful! Even for long-haul turns of, say, a 738 an hour seems long. Quite a bit of slack to be taken up there, especially since you were talking about long turns at the spokes, too. Should easily be able to get one more segment out of each plane per day, maybe even two in some cases.

2) rolling the hubs would result in somewhat less need for gates/personnel if the number of flights were the same.

Even if the number of flights increases, with the same number of aircraft you're not going to have as many of them at the airport at one time. This should require fewer people to be on staff anyway.

You mention beefing up staffing at the other gates. What would you have these additional people do?

 

[BoeingBoy]

Personally, I would always have two agents at each gate for customer service. Hate to see 15-20 people lined up to check in with one agent. Should have enough ramp people to load/unload both forward and aft cargo bins at the same time - that's six minimum. The shorter turn times mean those bags need to be unloaded/loaded faster. More ticket counter personnel - at least till more people start using the kiosks. I see it as poor service if people have to stand in line at the counter 15 minutes or more. Etc.


On a completely different subject, I was glad to see the announcement that there'd be additional service for the Indy 500 and Kentucky Derby. But that is only a start. Here in High Point, NC, we have what's called the International Home Furnishings Exposition (or furniture market as we call it) twice a year. Lasts a week and people come from all over the world, with folks coming & going all week. United & Delta put 757's on their service during the market - have been for a decade. We have no change at all. I've talked to the folks in RIDC about it till I'm blue in the face, but they just don't get it.

Jim

 

[mweiss]

Personally, I would always have two agents at each gate for customer service. Hate to see 15-20 people lined up to check in with one agent. Should have enough ramp people to load/unload both forward and aft cargo bins at the same time - that's six minimum. The shorter turn times mean those bags need to be unloaded/loaded faster.

Agreed on these. I didn't realize US was staffing gates with single agents. That's bad for many, many reasons. Just thinking off the top of my head, I wonder if the containerized loading of A320s can help reduce turn times as well.

More ticket counter personnel - at least till more people start using the kiosks. I see it as poor service if people have to stand in line at the counter 15 minutes or more.

I disagree here. Not with the 15-minute comment, but with the need for more ticket counter personnel. If the flights are spaced better due to rolling, the existing personnel should be able to handle more pax per day. 'Course, I don't fly US out of PHL (actually, I haven't been to PHL at all in nearly four years), so I don't know if you're severely understaffed at the ticket counter. But if everyone has been getting served, then the overall staffing has been OK; the rolling hub should smooth the rate of people coming through, and thus shorten the queues.

 

[BoeingBoy]

mweiss,

Don't know what the podium staffing is supposed to be, but it's not unusual to see one agent checking in a flight - or 2 agents where 2 gates share a podium.

I hadn't thought of the effect of rolling the hub on the ticket counter - good point.

Jim

 

[Cosmo]

... I wonder if the containerized loading of A320s can help reduce turn times as well.

Are you referring to passengers or cargo?

(Sorry, I couldn't help myself! Just a little humor to make the day go faster.)

 

[funguy2]

I have noticed many airlines seemed to have reduced the number of customer service agents staffing the gates. I assume the justification is that 99.9% of passengers must check-in for their flight prior to security anyway. Therefore, one of their main job functions, passenger check-in, is no longer relavant.