Strategic Analysis:

[funguy2]

Boeing Boy:

I don't disagree with your point. However placing the raw numbers may be doing so out of context. Here is what I mean.

The Capacity Purchases... For one thing, there is one less day in November than either October or December. Plus, the company probably pays for fuel to the contract carriers, which could be the reason for the decline between Oct and Dec. If you make this a per day number, you get:
October - 2322/day
November - 2077/day
December - 2247/day
Still a varience between Nov and the others, but less dramatic.

Why more Maintenance in December than October is beyond me. If I were running the airline, I would try to do more maintenance work in October and less in December. This would give the airline the ability to work on more planes in low-demand times, fly more airplanes in high demand times, and try to offer some <maintenance> employees vacation time around the holidays, when they want to be off anyway. Why this is counter to that philosophy, I have no idea.

So I agree with your point. I just think these numbers may be somewhat out of context, and they are not specific enough to be useful. For example, if we knew exactly what the Maintenence expenses were, we could make informed assumptions. If we knew what the capacity purchases included more specifically, we could make informed assumptions (do they included fuel? were they impacted by contract carrier maintenence schedules? were there deliveries or retirements during the period? etc).

 

[funguy2]

Airlines get to choose which method they use, as long as they use it consistently. I just figured they used the other method, but it looks like they don't. Well, so much for that explanation. Don't know how else to explain the dropoff in revenue, except that you may well be right about declining yields.

[post="244770"][/post]​

Or maybe the company operated less ASMs in December vs October. Or maybe the combined effect of very off-peak early December averages out poorly with a few very peak days before and after Christmas. And maybe some of that peak traffic spills into early January. And maybe the company did not realize a bunch of December revenue because of the "operational meltdown". Or maybe its a combination of these things AND declining yield during the course of the quarter. At this point, I just don't think we have enough information to be informed on this topic.

 

[ringmaruf]

In addition to the deicing that mweiss mentioned as an additional source of winter maintenance expense, don't the widebodies all have their heavy checks done in the winter as well, when the seasonal Europe flights don't operate?

 

[funguy2]

In addition to the deicing that mweiss mentioned as an additional source of winter maintenance expense, don't the widebodies all have their heavy checks done in the winter as well, when the seasonal Europe flights don't operate?

[post="244815"][/post]​

Good point... I tend to think domestically, but that would seem to be the smart way to do it...

 

[BoeingBoy]

ringmaruf,

That was something I overlooked also - thanks.

Jim

 

[mweiss]

Me too. Nice catch.

 

[insp89]

In addition to the deicing that mweiss mentioned as an additional source of winter maintenance expense, don't the widebodies all have their heavy checks done in the winter as well, when the seasonal Europe flights don't operate?

[post="244815"][/post]​

During this time period, The company had aircraft worked on in Alabama by a third party outfit, While at the same time, The company has under utilitized hangars in Both CLT and PIT. [not to mention the under utilitized work force].

 

[UseYourHead]

Good Job! Thanks for taking the time to put it together.