PIT vs CLE - sorry another PIT topic

[BoeingBoy]

15% more passengers at $30 more per passenger.....not exactly getting the market handed to them by WN.

But two years earlier, in the 1st quarter of 2005, US had 82.93% of the PIT-PHL market at an average fare of $269......

Jim

 

[Travelpro72]

All you PIT bashers only need to check out that "average" fare as BoeingBoy posted and you'll see why US can't make PIT work for them. They can't cram those kind of fares down peoples throats anymore. The threat to leave has passed and folks are now flying other airlines. The city and surrounding metro area STILL is alive and well. I'm personally not delusional enough to think a US hub is ever in the future. It's simply astonishing to me that others agree with the decisions made by old management and carried out today even more severe by the current management. I said it before and shall again, "The PIT hub issue is purely personal and political".

 

[PHX PHLyer]

But two years earlier, in the 1st quarter of 2005, US had 82.93% of the PIT-PHL market at an average fare of $269......

Jim

Ummmm.....ok......that pretty much applies to every market that WN enters that already has an incumbent flying it. Your market share obviously goes down (unless WN never flies a passenger on any of the new flights on any day of the week), and the average ticket price is going to drop. This isn't unique to US. I think that it is a good thing that US actually still has a majority of the traffic honestly. There are several routes out there where other airlines can no longer say the same.

 

[SS255]

Exactly. Usairways can't even hold their on on the PIT-PHL run. It kills me when you have these folks that say PIT is dead and PIT can't work. This company has been badly managed for years and NOW has THE WORST management we have ever had. The majority feel they can do no right in any area EXCEPT when it comes to PIT. Put your issues with the city, the people, the sports, the food etc aside and SEE that the place could be a sort of relief airport to PHL if they applied themselves. The company has lied about numbers and the reasons for the failure that is now Usairways operations in PIT. As for support, the numbers and trend proves that the people and money are there. They simply are NOT willing to fly to PHL and experience Sh!tty service so now connect since thats the norm on any other carrier. No airline is going to set up shop there for the SIMPLE fact that all (legacy and TRUE LCC'S) are pretty much set up in their hubs/focus cities already. Other carriers HAVE and CONTINUE to add service slowly. Between that and the fact that folks are flying in record numbers PROVES that Usairways blows and has NO ability to run an airline. Yeah PHL is the big money maker but look around at your money maker and the state of the airline as it continues to crumble all around us. Keep putting all your eggs in one basket US Americawestways and see where you are in a few years. Can't even hold your own on PIT-AVP which was pretty much ALL O&D and FULL ! ! !

Well said! We used to have 4-5 mainline flights a day to PIT which were always full or nearly full, and now we're down to ZERO! Now AVP'ers are driving to Pittsburgh, because it's absolute insanity to fly through PHL when your final destination is PIT. And since AVP'ers are no longer flying to PIT, US can "rightfully" claim that there is no demand for this route. I'm sure it's the same story with ABE, and any number of the smaller airports dotting PA.

 

[PHX PHLyer]

All you PIT bashers only need to check out that "average" fare as BoeingBoy posted and you'll see why US can't make PIT work for them. They can't cram those kind of fares down peoples throats anymore.

YES!!! You basically just made the case as to why PIT can no longer work. The only way that it could work with such low O&D numbers was to charge outrageous fares to the local population to subsidize all of the connecting passengers on the flight. They had a monopoly on the PIT market, and that was the only way that it could work as a hub city. Enter AirTran, jetBlue, Southwest, Frontier, etc., and now they can't charge those fares (as you say), and it can no longer work for them. It's simply called economics.

I'm not a PIT basher....I have connected there and found it to be a great airport....but I am in the aviation consulting business and know why it can no longer work as a hub, and make no excuses for it (unlike most all the PIT loyalists here). It can't work as a hub if there is competition....period...sounds kind of ridiculous to hear that (ripping people off was the only key to success)....but it's true.

 

[Travels2mch]

All you PIT bashers only need to check out that "average" fare as BoeingBoy posted and you'll see why US can't make PIT work for them. They can't cram those kind of fares down peoples throats anymore. The threat to leave has passed and folks are now flying other airlines. The city and surrounding metro area STILL is alive and well. I'm personally not delusional enough to think a US hub is ever in the future. It's simply astonishing to me that others agree with the decisions made by old management and carried out today even more severe by the current management. I said it before and shall again, "The PIT hub issue is purely personal and political".

You hit the nail on the head here.....it's all political then and now. And the ones that started it are no longer in office/power at both US and Allegheny County. It's just that this enept new management is too stupid to do anything about it.

And as usual, as soon as you mention the dreaded 3 letters P-I-T, everyone's panties get twisted tight (like EMB.....man did she get hit by a tug in PIT that she has such a bug up her a$$ about it??). Dinner and a movie folks!!

Anyway....continue to bash on.......back to you Bob!

 

[CynicalResAgent]

But CO can make CLE work. Why is that? WN has a much larger operation in CLE than they do in PIT and you have CAK just south of the city which is almost as convenient for some people in the southern metro area and FL has a pretty good sized operation there. Plus the facilities in CLE are nowhere as nice as PIT. So LCC competition is there in CLE.

CO evidently see's money to be made otherwise they would not be expanding.

 

[PHX PHLyer]

But CO can make CLE work. Why is that? WN has a much larger operation in CLE than they do in PIT and you have CAK just south of the city which is almost as convenient for some people in the southern metro area and FL has a pretty good sized operation there. Plus the facilities in CLE are nowhere as nice as PIT. So LCC competition is there in CLE.

CO evidently see's money to be made otherwise they would not be expanding.

Just to help you out there....PIT is a larger WN operation than CLE.

CLE - 20 WN flights/day
7 - MDW
5 - BWI
2 - BNA
2 - MCO
2 - STL
1 - LAS
1 - PHX

(And WN is eliminating service between CLE-PHX and cutting 1 daily CLE-BWI)

PIT - 23 WN flights/day
7 - PHL
6 - MDW
3 - BWI
3 - MCO
2 - LAS
1 - TPA
1 - PHX

AirTran also has 7 flts a day (2 to MCO, 5 to ATL). jetBlue has 6 flts a day (4 to JFK, 2 BOS). PIT & CLE both have USA3000. CLE does not have AirTran or jetBlue (although you do mention CAK and AirTran which is a decent operation for them).

But what it still goes back to is the percentage of traffic at CLE that is O&D, the increase the O&D traffic has seen there, and the wealth of the metropolitan area. All of this in comparison to PIT is far and away better at CLE than PIT.

I know that one of the big factors for US at PIT was the astronomical landing and airport fees there.....who knows....maybe CO gets them much cheaper. And basically....CLE is paying for CO to add these flights.....offerring lots of incentives and packages. All PIT ever did was overcharge US and invite in as much competition as they could (which is perfectly fine and in their right).

And the size of the CLE operation for CO has never been very large (like I said....45 mainline flts/day.....170-190 small express planes/day). Maybe if US had started out smaller and tried to grow it more slowly like CO then it would have been more profitable rather than having too much capacity and then having to continuously shrink it to where all of the spokes of the hub are messing eachother up and it dwindles down to nearly nothing.

 

[BoeingBoy]

YES!!! You basically just made the case as to why PIT can no longer work.

So you're saying is that "the world's largest low cost low fare carrier" has to be able to charge an average of nearly $1 per seat mile to make money, and that only averaging 44 cents a seat mile in revenue results in loses?

Perhaps US should pull out of PHL-BOS (50 cents/seat mile average) since it's such an obvious money loser.......

Jim

 

[PHX PHLyer]

So you're saying is that "the world's largest low cost low fare carrier" has to be able to charge an average of nearly $1 per seat mile to make money, and that only averaging 44 cents a seat mile in revenue results in loses?

Perhaps US should pull out of PHL-BOS (50 cents/seat mile average) since it's such an obvious money loser.......

Jim

No...I am not saying that. The 44 cents per seat mile that US gets on PHL-PIT is for flying 444 passengers per day with 856 available seats per day (using usairways.com schedule for next week). Thats basically a 50% load factor. Factor in those people who are either going PHL-PIT-elsewhere or elsewhere-PHL-PIT, they are probably not very high yielding as connecting fares are more competitive and the revenue they contribute is now cut in half (give or take) for each flight they are on.

I am sure that US does fine on PIT-PHL....there is enough local PIT traffic for it. But the problem with PIT was probably more like PVD-PIT-PHX. Southwest flies this nonstop and so US matches more or less their fare in this market. But for schedule, loyalty, or a good deal or whatever, the traveler connects through PIT on US rather than taking a WN flight. So WN charges $149 lets say for PVD-PHX. This traveler pays $149 for PVD-PIT-PHX. While WN gets $149 for the cost of 1 flight...US gets $149 for the cost of 2 flights. Revenue for WN is $149 for 1 flight....US gets revenue of say $45 PVD-PIT and $105 PIT-PHX. That is awfully low yielding. But some airlines can make up for this by having a high percentage of people flying PVD-PIT O&D, and a high percentage of PIT-PHX O&D, where they are earning a lot more revenue from each of those flights (lets say $89 for PVD-PIT.....and $139 PIT-PHX....using these as low numbers). These O&D people subsidize the connectors. When US could no longer charge high fares to O&D passengers....in addition to the low percentage of O&D already AND the huge increase in competition from WN in the Northeast during the time....US could not make PIT work.

P.S. PHL-BOS is not a legit example as most of the plane is O&D.

 

[CynicalResAgent]

Did some quick research because you make a valid point....but population can obviously not be the only measure here.

Cleveland
-CLE in 2006 had O&D of 76% of its total traffic.
-Metropolitan Statistical Area had a wealth level of 111% of the state (Ohio) and 103% of the nation.
-O&D passengers have increased 16% since 2001

Pittsburgh
-At the height of US operations (2000) at PIT, 60% of passengers were connecting. (compared to 24% in CLE)
-Since the height of operations, O&D traffic has increased about 3-4% (Compared to 16% in CLE)
-MSA wealth is less than the state (Pennsylvania) and the national average (Compared to higher CLE numbers)
This isn't the whole story but can certainly give you an idea as to why CLE is ripe for expansion while PIT is not. Besides, CO has literally something like 45 mainline flights a day out of CLE. That is only slightly more than PIT has today (think PIT has something like 35 right now and a little bit more during the summer). CLE is an RJ fortress.....there are about 190 or so express flights a day (all on planes with 50 seats or less.....US has E170s, etc)....I think PIT still has around 100 Express flights a day....if anything....I would say that CLE should be called a secondary hub for CO....but they want to act like it is more significant than it is and says that it is a hub.

In a press release, Continental says it will announced "later" additional cities that "will also be added during Phase Two." By June 2008, Continental expects to be flying 300 daily flights from Cleveland, up from the current 242. Its number of nonstop destinations is expected to grow to 100 from 80.

 

[sfb]

This isn't the whole story but can certainly give you an idea as to why CLE is ripe for expansion while PIT is not. Besides, CO has literally something like 45 mainline flights a day out of CLE. That is only slightly more than PIT has today (think PIT has something like 35 right now and a little bit more during the summer). CLE is an RJ fortress.....there are about 190 or so express flights a day (all on planes with 50 seats or less.....US has E170s, etc)....I think PIT still has around 100 Express flights a day....if anything....I would say that CLE should be called a secondary hub for CO....but they want to act like it is more significant than it is and says that it is a hub.

Actually PIT is (or will be next month) at about 31 daily mainline departures and roughly 75 Express, not 100. 20-25% of the Express departures at PIT are EAS to places like FKL, JHW, JST, PKB, etc. One third of the Express departures (25) are at-risk RJ service by Trans States.

Yes, CLE is RJ city, but those RJ's are largely targeted to places people from CLE want to go. US (excluding Trans States' at-risk flying) has abandoned many of the medium-sized cities from PIT that CLE has retained. CO still flies to places like BNA, DFW, MCI, TYS, ATL, ALB, etc. from CLE -- and that's even before the announced expansion.

WN has about 76% of the local traffic between PHX and LAS. But while it is hub to hub for US, it basically is too for WN. That is WN flying from its number 1 city to its number 3 city. US is flying from its number 3 hub to its number 5 hub.

Nice spin, but before the merger, PHX to LAS was America West's ONLY hub-to-hub route -- i.e. from number 1 hub to number 2 hub. And at that time, WN had 80% of the local traffic in the market.

So as you say, US can't hold their own against WN in PIT....but they can in PHX and LAS....so maybe that says something about the local market in PIT more than it does about the airline.

US (well, really America West) can't hold its own in PHX or LAS, either. WN is #1 for O&D traffic at PHX and #1 for both O&D and total traffic at LAS. America West abandoned LAS-DEN after WN entered the market. America West abandoned LAS-HOU.

Andthe HOU operation is not really on the same scope as the PHX and LAS operations. HOU has over 30 flights a day to Dallas Love, and a ton more a day to SAT, AUS, etc. The majority of HOU operations are within Texas....so CO doesn't have to compete as much against in other markets where WN either doesn't fly or has limited frequency.

And the majority of WN's flying at PHX is in markets under 500 miles -- 18/day to LAS, 13/day to LAX, 12/day to ABQ, 13/day to ONT, 14/day to SAN, 7/day to BUR, 8/day to ELP, 7/day to SLC, etc. As to HOU, less than half of their departures are within Texas -- if you include MSY you get to right at half. DAL is far more skewed toward intra-Texas flying due to the Wright restrictions.

YES!!! You basically just made the case as to why PIT can no longer work. The only way that it could work with such low O&D numbers was to charge outrageous fares to the local population to subsidize all of the connecting passengers on the flight. They had a monopoly on the PIT market, and that was the only way that it could work as a hub city.

Wow, the spin is just amazing! So the PIT-PHL flight only worked in the past to subsidize the connecting passengers? Why does it work now with even more frequency on higher-cost equipment and dramatically lower fares? Why would passengers to/from PHL have been connecting at PIT when there were non-stops available from PHL?

The pull-down at PIT started long before WN chose to enter the market. WN has been a competitor at CLE for literally decades longer than they have at PIT. Moreover, CO does compete with AirTran's operation at CAK. And yet for come reason, CO seems to think that CLE can be grown profitably.

And the size of the CLE operation for CO has never been very large (like I said....45 mainline flts/day.....170-190 small express planes/day). Maybe if US had started out smaller and tried to grow it more slowly like CO then it would have been more profitable rather than having too much capacity and then having to continuously shrink it to where all of the spokes of the hub are messing eachother up and it dwindles down to nearly nothing.

Or perhaps the truth of the matter is that US/HP management has done a very poor job of shrinking the PIT hub and/or retaining higher-yield connecting passengers that might be sent through PIT (i.e. not dumping cheap connections to fill the planes). Delta has chosen to shrink CVG significantly but things there seem to be stable for now; of course, they didn't choose to cut CVG anywhere nearly as deeply as US cut PIT. The CO hub at CLE had more mainline service in the past -- roughly 80 daily departures just prior to 9/11.

But frankly what CO has realized is that if they want to be able to grow their markets in the East/Midwest, they need to use CLE as a reliever for EWR. EWR has no room to expand and it is FULL at peak times. They'll be able to add larger aircraft to EWR with the 737-900ER's and the Q400's coming online, but that means they'll also need to redeploy the freed-up aircraft to both IAH and CLE. IAH is also full at peak hours, especially with the impending Terminal B reconstruction, so CLE is the place to grow.

 

[BoeingBoy]

P.S. PHL-BOS is not a legit example as most of the plane is O&D.

Wrong, based on the averages - only about 50% O&D.

But if you don't like PHL-BOS (it was the first in the report that didn't have WN competition), how about:

PHL-IND: 26 cents/seat mile
PHL-JAX: 20 cents/seat mile
PHL-MCO: 17 cents/seat mile
PHL-TPA: 15 cents/seat mile
PHL-FMY: 16 cents/seat mile
PHL-PBI: 17 cents/seat mile
PHL-FLL: 15 cents/seat mile
PHL-MCI: 20 cents/seat mile

Your logic would seem to indicate that PHL will be seeing some reductions soon since those average yields do little to subsidize that "low yield" connecting traffic.

No...I am not saying that. The 44 cents per seat mile that US gets on PHL-PIT is for flying 444 passengers per day with 856 available seats per day (using usairways.com schedule for next week). Thats basically a 50% load factor. Factor in those people who are either going PHL-PIT-elsewhere or elsewhere-PHL-PIT, they are probably not very high yielding as connecting fares are more competitive and the revenue they contribute is now cut in half (give or take) for each flight they are on.

As for the rest, you're saying it's more profitable to make that "low yield" connecting traffic make their connections in PHL (which won't increase that "low yield"), at higher cost (aircraft/fuel/crew/mishandled baggage/misconnects/etc) while the local O&D traffic pays enough less to wipe out most of the advantage of the extra O&D traffic in PHL?

Jim

 

[CynicalResAgent]

It's funny to read the relationship between CO and the city of Cleveland. This is from the local paper the Plain Dealer -

"It's more a symbol of Continental's commitment to the community," said Cleveland Councilman Kevin Kelley, chairman of the council's Aviation and Transportation Committee.

Dennis Roche, president of the Convention and Visitors Bureau of Greater Cleveland, said the announcement would be a boost to the local economy in more ways than one.

"Obviously, we'll see more people working," Roche said. "It also makes us more attractive as a destination because we'll be more accessible. It's one good thing layered on another."

- Totally the opposite relationship US had with Pittsburgh officials. But of course US kinda screwed them during BK.

 

[Pacemaker]

The ticker symbol may be "LCC" but US Airways' costs remain breathtakingly high, far-and-away the highest of the legacy and LC carriers. And they're much higher for the east operation than the west. So it's logical to assume that weak O & D in PIT means there's simply not enough dollars there, however nice the airport is. Write it off as another Colodny mistake, along with the F100's.