Southwest Pit Flights

[justaumechanic]

The PIT-PHL market is one of the higher fare markets out of PIT - the average fare paid on US was $273 in 3Q04 with 19% of passengers paying $326 to $350 and 1% paying over $450.

In 3Q04 there was an average of 422 total passengers per day on this route. Looking at PHL markets of similiar distance both before and after WN's entrance (PHL-MHT, PHL-PVD, & PHL-RDU), traffic went up 1012%, 1002%, and 264% respectfully, while fares dropped 82%, 81%, and 72% respectfully.

Interestingly, the increased traffic more than offset the reduction in fares, with PHL-MHT & PVD total revenues more than doubling. Unfortunately, just like these markets, we will now share that revenue with WN.

Jim

[post="248576"][/post]​

Well stated. This is the part of the equasion that people USA320 can not understand. Simple math.

The very idea that US Airways will have lower costs than AirTran and Southwest is absolutely false.. Even with the lower employee cost's US Airways is well above their CASM.. Simple as that..

USA320 I am not bitter.. I feel sorry for everyone at US Airways. My only complaint with you is your COMPANY COMPANY COMPANY approach to everything.. The fact that you can never post anything that says "Ooops, I was
wrong".. You posted right up until the day justice said no that the UAL merger was a go.. A go go go.. Then you were off the board for months because you had to hide under your shell.

Bitter.. No.. Never bitter. You represent the worst part of US Airways.. A know it all that knows nothing..

US Airways will never be able to compete against Southwest and AirTran.. Never..

 

[BoeingBoy]

Clue,

Let me add to your response .....

As I indicated earlier and then was publicly stated by David Bronner, when US Airways fully implements its Transformation Plan the company will have a cost structure less than Southwest and AirTran.

[post="248563"][/post]​

OK, you've consistently mischaracterized what Bronner said in that newspaper interview. Care to post a link that quotes him actually saying what you claim he said?

These deeper cuts were required because of the union resistance to change that contributed to more passengers "booking away" from the carrier and increased bankruptcy costs.

[post="248563"][/post]​

Interesting that the company's presentation to the labor coalition didn't say anything about the "union resistance to change that contributed to more passengers booking away". That presentation blamed "liquidation talk".

Jim

 

[BoeingBoy]

Jim,

Are those PAX/day numbers all revenue passengers? Seems like you might have 300 US employees alone commuting PIT-PHL on any given day!

I guess this could be seen as a good commuting option for US Pilots/.

[post="248578"][/post]​

I believe they're revenue passengers, which would exclude non-rev commuters.

Jim

 

[Tim Nelson]

Come back for more concessions.

[post="248539"][/post]​

I think it is likely they will come back for more. Not one union recommended against it last time.

regards,

 

[USA320Pilot]

USA320Pilot said: “As I indicated earlier and then was publicly stated by David Bronner, when US Airways fully implements its Transformation Plan the company will have a cost structure less than Southwest and AirTran.â€

ClueByFour said: “That assumes that US makes it until like 2007 and that additional aircraft are ordered, and such. That's 2+ years off. US will not have lower costs that LUV when love begins PIT service. That projection probably also includes $35/bbl oil, and meaningful nonlabor savings (neither of which have shown any tangible signs at all of actually coming to fruition).â€

USA320Pilot comments: I have seen the new business plan and the confidential financial projections and your numbers are way off, but what’s new? The business plan accounts for fuel prices that correspond to Crude Oil Future Contracts at a prices much larger than $35 per barrel. Furthermore, US Airways expects to be profitable later this year, with most of the loss coming in the first quarter. Furthermore, the company expects a net profit in 2006.

USA320Pilot said: “US Airways will likely introduce GoFares in the new Southwest and AirTran markets to maintain its market share.â€

ClueByFour said: “The problem is that US cannot currently make money at those rates. But let's forget that--the question one should ask is "why has US charged fares on these routes for years that is anywhere between 2 and 20 times the actual CASM on the route?" (lack of strategic vision and customer focus on CCY's part is the answer, BTW).â€

USA320Pilot comments: The GoFares are not available for every seat on every flight and the new pricing plan, similar in scope to Southwest’s model, will produce a profit when the new cost structure is in place, which is sooner rather than later.

USA320Pilot said: “Later this year expect GoFares to be implemented in the vast majority of the domestic network.â€

ClueByFour said: “That's going to be interesting, and probably will not happen. It can't. US has too many ultra-high-CASM RJs and pay-for-departure contracts to do it.â€

USA320Pilot comments: US Airways has not affirmed any affiliate carrier contracts and management expects relief. Furthermore, the company’s projections and the most recent Transformation Plan update projects profits later this year, followed by sustained profitability in 2006 and beyond.

In fact, on their website the CWA reported on the recent Labor Advisor Council meeting earlier this month and said, “Bruce Ashby and Ron Stanley discussed the Company’s position in an industry plagued by high fuel prices and below-cost ticket prices due to overcapacity. They anticipated that US Airways will continue to lose money the first quarter but should see a modest profit by end of 2005.â€

See Story

In conclusion, Since you do not work at US Airways and obviously have an “xx to grind†I find your comments to be ClueLess. But what’s new?

Best regards,

USA320Pilot

 

[USA320Pilot]

BoeingBoy:

BoeingBoy said: “OK, you've consistently mischaracterized what Bronner said in that newspaper interview. Care to post a link that quotes him actually saying what you claim he said?â€￾

USA320Pilot comments: No I did not. I am not going to waste my time doing your research for you. If you want to find his comments go to www.chipsplace.com and look at the daily update.

BoeingBoy said: Interesting that the company's presentation to the labor coalition didn't say anything about the "union resistance to change that contributed to more passengers booking away". That presentation blamed "liquidation talk".

USA320Pilot said: “Much of the liquidation talk was due to the fact the company had to fight labor to get the cost cuts, which were much deeper than the first ‘ask’.â€￾

USA320Pilot comments: I have seen the confidential and public portion of the presentation I know exactly what it said and implied. Moreover, I have seen the confidential portion of the new business plan and your comments are incorrect.

If labor had agreed to the cuts sooner and not issued strike talk press releases the company would have a larger cash position and there would not have been liquidation talk, which has now largely subsided. I find it interesting that with the labor concessions now in place bookings are much better, revenue is higher, and the liquidation talk has virtually subsided. How can that be?

Best regards,

USA320Pilot

 

[whlinder]

Interesting business model = profitable.

Piney can you link to that report from the St. Pete times? You sound like A320Pilot.

 

[700UW]

USA320Pilot comments: I have seen the new business plan and the confidential financial projections and your numbers are way off, but what’s new? The business plan accounts for fuel prices that correspond to Crude Oil Future Contracts at a prices much larger than $35 per barrel. Furthermore, US Airways expects to be profitable later this year, with most of the loss coming in the first quarter. Furthermore, the company expects a net profit in 2006.

In fact, on their website the CWA reported on the recent Labor Advisor Council meeting earlier this month and said, “Bruce Ashby and Ron Stanley discussed the Company’s position in an industry plagued by high fuel prices and below-cost ticket prices due to overcapacity. They anticipated that US Airways will continue to lose money the first quarter but should see a modest profit by end of 2005
Best regards,
USA320Pilot

[post="248589"][/post]​

That is funny they don't have a new business plan yet, and your proxy holding at a meeting does not count towards being a representative or in the know.

And they also said that the last bankruptcy and concessions was enough for them to compete and make money, gee what happened?

 

[FWAAA]

And they also said that the last bankruptcy and concessions was enough for them to compete and make money, gee what  happened?

[post="248592"][/post]​

Not enough high cost (CASM) RJs?

Insufficient LCC competition in PHL, PIT and CLT?

 

[BoeingBoy]

BoeingBoy:

BoeingBoy said: “OK, you've consistently mischaracterized what Bronner said in that newspaper interview. Care to post a link that quotes him actually saying what you claim he said?â€￾

USA320Pilot comments: No I did not. I am not going to waste my time doing your research for you. If you want to find his comments go to www.chipsplace.com and look at the daily update.

[post="248590"][/post]​

Fair enough, and here it is:

"Assuming that the IAM goes along with us in two weeks, then we'll have lower costs than Southwest." - quote from Bronner

“As I indicated earlier and then was publicly stated by David Bronner, when US Airways fully implements its Transformation Plan the company will have a cost structure less than Southwest and AirTran.â€￾ - USA320Pilot's characterization of Bronner's remarks
[/I]

I'll leave it up to the readers to find the difference.....

Jim

 

[JS]

Lowest Fares From SWA???

According to a report published in the St Petersburg Times, SWA has the lwest fare in a given market 26% of the time.

Which means that 3 out of 4 times someone else is cheaper! SWA also sells the highest percentage of full fare tickets which is kinda misleading since their highest fare is $299.00 one way.

If US is cheaper than WN when WN will be charging anywhere from $29 to $79 one way from PHL to PIT, how long can US possibly stay around?

PLUS with SWA what you really buy is NOT a confirmed seat but an opportunity to baord a plane to a specific destination. If the flight is oversold you get on the next one. At least that is my understanding.

FALSE

I'm not so enamored with them never have been. It's an interesting business model to be sure.

[post="248587"][/post]​

Fly them once and you might change your mind.

 

[700UW]

Looks like Jim is correct once again and our resident management cheerleader is wrong once again.

 

[EyeInTheSky]

$29 airfares! Let's look at this shall we. Let's face it, at $29 O/W even Southwest isn't going to make a profit. Quite frankly, this should be illegal, yeah illegal. Look, US Airways has done the same damn thing underpricing its product to drive other carriers out of the market and out of business (remember Nations Air?) However, when you go into a new market and INTENTIONALLY UNDERPRICE your product the objective is clear: you're trying to kill your competition. In this day and age when airlines are losing billions and the government fiddles around with some sort of idea to help solve the crisis while at the same time preserving jobs. Here's a novel idea: Make it illegal to underprice airfares. Southwest would be hard-pressed to prove they are going to make a profit flying PIT-PHL at $29 a pop (two very costly airports operationally).

In the meantime, US Airways needs to do the following:

>> match the fares
>> double FFlier miles
>> match Southwest's ticket change policy

For PR purposes US Airways should:

>> stress the number of jobs this airline has in the state of PA...get out and tell the taxpayers that US Airways employs 11,000 and that Southwest will NEVER come close to that.

>> stress what Southwest DOES NOT provide
-- International flying
-- INTERLINE BAGGAGE AGREEMENTS -- flying another carrier we'll get your bag over to the other carrier...Southwest will not.
-- Interline agreements to get you on another carrier... This is called Rule 240, that is, if your US Airways' flight cancels (the fault must be with the carrier aka mechanical, crew delay etc..weather does not count) and US Airways is not able to get you to your destination within a reasonable amount of time they must accomodate you on another carrier. Southwest does not have Interline agreements so you'll have to wait for the next 'available' Southwest flight or get a refund.

US Airways needs to tell the public WHY they should fly US Airways over Southwest. This is one battle that US Airways must win; there is no second place on this one...second place is out of business.

Eye

 

[BoeingBoy]

$29 airfares! Let's look at this shall we. Let's face it, at $29 O/W even Southwest isn't going to make a profit.

[post="248608"][/post]​

Actually, it's in keeping with WN's general fare structure - lowest fares about breakeven and others profitable. Works out to 10.82 cents per mile, which is probably about breakeven for WN on this stage length.

Jim

 

[EyeInTheSky]

Actually, it's in keeping with WN's general fare structure - lowest fares about breakeven and others profitable. Works out to 10.82 cents per mile, which is probably about breakeven for WN on this stage length.

Jim

[post="248609"][/post]​

Jim that might well be the case for other airports; however, PIT and PHL's airport fees are some of the highest in the country. I think this has to be broken down between these two airports. I think the costs will be several pennies higher (at least).