Us Airways Strategic Analysis

[usairways_vote_NO]

UVN:

[post="253891"][/post]​

Heres a short one 2nd time

USA320Pilot as a FAA rated Captain can you tell me your experience and qualifications on being a Airline analyst, CFO, CEO, Member board of directors, union analyst, Mechanic, F/A, Utility, Customer service, Insider and Chief negotiator all rolled into one? I didn't think so no answer needed plus you wouldn't answer anyway.

Looks like you ran away quick when you saw this one. hehe I love it

 

[FA Mikey]

Hope777, as an FAA type rated Captain who has flown thousands-and-thousands of hours in both the B737 and A320 family aircraft, I think I fully understand aircraft capacity, fuel flow, and fuel consumption. With all due respect, the Boeings burn more fuel than the Airbus aircraft.

FA Mikey, as an American Airlines Flight Attendant, can you tell me your experience with understanding of aircraft performance and fuel consumption on these two aircraft?

Regards,

USA320Pilot

[post="253852"][/post]​

I would but its likely you get you more confused, with a few little things we like to call reality and facts. I guess you assume that being a FA and not an " FAA type rated Captain who has flown thousands-and-thousands of hours in both the B737 and A320 family aircraft" I and everyone else here are not capeable of understanding such things? Best of all I didnt need to point out the obvious, it was already done.

Care to explain it for us, or will it be a typical dodge the question with your chest beating I am a "FAA type rated Captain who has flown thousands-and-thousands of hours in both the B737 and A320 family aircraft."

 

[Rico]

Can we get back to worthwhile discussion.

In regards to something brought forth yesterday, regarding the possible sale of MDA, PSA, and PDT... There are some other factors outside of our own company that could effect such a move right now. Skywest announced that DAL had shown a desire to sell off their carriers Comair and ASA. And the major stockholder for Independence Air is still pressing for a sale to unnnamed carriers.

In this enviorment, those with capital, and interested, might have other acquisition possibilities that would allow them to "buy in" to the DAL or UAL systems instead competing for their capital.

 

[usairways_vote_NO]

Care to explain it for us, or will it be a typical dodge the question with your chest beating I am a "FAA type rated Captain who has flown thousands-and-thousands of hours in both the B737 and A320 family aircraft."

[post="253907"][/post]​

He is what he thinks a daddy should be. Tell the kids how it is, don't ask me questions because you don't and won't understand and I don't have time for you I am way to important.

 

[funguy2]

Whlinder, I do not proof read what I write because it takes too much time. Good catch.

Just imagine how long it takes the rest of us to read your diatribe.

 

[Rico]

Why dontcha fellows stop for a second, go read the sticky post the moderators left at the top of this forum, and then just cool it already...

 

[Hope777]

Captain oh Captain........

Please tell me again how much MORE the Airbi cost the Company in Landing Fees over the Boeing this past year. Please Include ALL costs per aircraft, which would make the Boeing Cheaper to operate then its SMALLER brother the A319.

 

[usairways_vote_NO]

Just imagine how long it takes the rest of us to read your diatribe.

[post="253917"][/post]​

And how long it takes him to write um dream it up and write it. No wonder he doesn't have time to proofread. One thing I can agree with. I mean he has admitted he doesn't even read responses to his posts but that is more likely because he could care less about what others think then not having the time.

 

[funguy2]

Each $1 increase in the price of crude oil increase US Airways average fuel expense by nearly $2 million per month or $24 million per year, thus if current prices remain stable the company’s annual fuel expense would be about $300 million over budget.

In contrast, other legacy carrier’s larger than US Airways such as American, United, and Delta would see their fuel expense climb about $5 million per month or $60 million per year for each $1 increase in the price of crude oil. These companies have seen their fuel expense increase from last summer to day by about $1.2 billion per year, which like at US Airways is clearly unsustainable.

But AMR, UAL, and DAL are much much larger than US Airways... With 2 to 3 times as many aircraft... So what does the total increase in the fuel bill have to do with anything? Yes, we all already know that increase fuel costs will impact all airlines... Those with hedges will be impacted less.

Fare increases – This would seem to be a logical solution, but in today’s low fare environment that is not an easily obtainable solution, to simply pass the increased cost onto the consumer. LCC’s like Southwest, who is hedged in 2005 with its total fuel cost equal to oil prices at about $30 per barrel, and jetBlue are not increasing fares. However, the recent initiative by Northwest to increase short-haul round trip fares by $10 and long-haul fares by $20.

See Story

It’s unclear how much this initiative will raise revenue, but it’s a significant number.

Mainline bookings during the past 7 days were:

March 3 - 123,000
March 4 - 135,000
March 5 - 115,000
March 6 - 112,000
March 7 - 110,000
March 8 - 95,000
March 9 - 110,000

During the past seven days mainline bookings averaged about 115,000 customers and its Express bookings average about 47,000 passengers per day.

It’s difficult to quantify how the fare increase will impact revenue because US Airways did not match the increase in its GoFares markets, which represents about 25% of its revenue base. In addition, fares were not increased on other routes where the company competes with LCC’s and it rescinded the hike on some of its highest fares, where the fares were higher than Delta’s new SimpliFares.

For discussion purposes, lets assume that US Airways increased its round trip fares for about 75,000 customers per day by $10 and not include those long-haul flights where the increase was $20 per round trip. That would boost the company’s revenue by $750,000 per day or about $22.5 million per day. If this number is accurate, the increase in revenue would offset about a $11.25 increase in crude oil prices and its effect on the carrier’s jet fuel expense over budget.

Well, besides the fact that March 9th isn't over yet... How do you separate mainline and Express bookings? I thought a lot of folks purchase tickets which include a segment on both mainline and Express? And is one booking = to booking a roundtrip connecting ticket, or a one-way non-stop? Or both? Those "booking" numbers don't seem to mean much.

And, unfortunately, you have neglected to make very much accomodation for
1. Reduced demand based on the higher fares (basic, simple economics... yes its simple, but the FACT is that some people will not be willing to purchase a higher fare... See mweiss' thread for details)
2. The FACT that US Airways has largely recinded the fare increase for a fare sale initiated this week.

Eliminate unprofitable flying – In a recent email, US Airways executive vice president of marketing and planning Bruce Ashby said, "It is true that the loads for Panama City in March are strong. It is Easter time, probably the best month of the year for Latin American destinations.

Looking forward at the next several months is probably a better indication of the issues we are facing. PTY and SAL have advance bookings in the 25% range for April (i.e., % of seats booked now for travel in April) compared to an average of just under 50% for Caribbean destinations. For May, the markets are booked in the 3% range, compared to about 30% for the average Caribbean destination.

Those kinds of numbers are not encouraging. It is always possible that the markets will book up late and we would get an pleasant surprise. But they are not performing to our expectation and it is far more likely we will lose money on them if we continue to fly them.

As for fares, the average structure fares for Panama City and San Salvador are about $300. Discount/sale fares are, of course, lower and given the load factors we're looking at I would expect some heavy sales activity. However, on inventory controlled days (holidays), fares in the $400 range are more typical, which is what Jed was looking at.

We continue to push the other moves we made in the February schedule, including other FLL trips, the redesign of PHL, the rebanking of CLT, the new business nonstop services in DCA, etc. But these routes just weren't meeting expectations.

I think we all hope to build up FLL services at a time when we have more resources and more appetite for risk. Right now is not the time.†Ashby noted.

And, unless more aircraft are rejected and/or more furloughs occur, reducing flying will reduce utilization, eliminating many of the productivity concessions various unions gave to management.

 

[TheLarkAscending]

Thanks for another well thought out and valued comment. Your posts have so much substance.

Aw, 320, once again, you're confused in believing that your opinions matter!
Value is subjective, and substance is left to the discrimination of the reader. Since you do not proofread, that explains it all! Thanks, again, for the laughs!

Peace!

Lark

 

[funguy2]

By the way, how many "Strategic Analysis" threads do we need? Has US Airways strategy changed dramatically since March 4th, when the last strategic analysis thread was started? If it has, maybe that is a problem of the highest order. After all, the underlying strategies of successful airlines hasn't changed in years... LUV, jetBlue, even AMR, and Alaska have had long standing strategies.

 

[jack mama]

Funguy,
We definately need a Strageic Analysis almost everyday. I bet that's how much the plans change. I agree with USA320Pilot that time and cash are running out faster than the company can put a plan together. With fuel so high, and not coming down anytime soon, I just don't see any answers....

I'm looking forward to the next major announcement....

 

[usairways_vote_NO]

I'm looking forward to the next major announcement....

[post="253960"][/post]​

Your post is right on except did 320 really admit that?

Not that the company had any other plan except to take the employees 15 rounds or until a knockout punch thrown.

 

[madders]

personally I hope the smart people at Crystal City made there strategic plan on fuel prices at about $60 when they ask for cost cuts because if they did not ....

 

[USA320Pilot]

I find it interesting the normal "naysayers" and malcontents try to bash my posts, likely due to their anger and an ax to grind, instead of trying to provide thoughtful debate.

In regard to energy prices today NYMEX crude oil prices saw very interesting market action. During the past few day’s prices broke through resistance at about $53 per barrel and today rose within two cents of all time highs soaring to $55.65 per barrel and then sold off into the close. Although final Futures settlement prices are not yet complete, the closing price will be about $54.50, down over $1 per barrel from its high.

From a technical analysis perspective this would indicate futures prices may have hit a new resistance level. During the past 10 days crude oil prices are up over 10% and at some point traders will have to sell their contracts to take their profits, which would lower oil and jet fuel prices.

Meanwhile, today the USDOE released an inventory report indicating supply was 3.2 million barrels higher year-over-year, which is twice the number than was expected and should help drive prices lower. This is the biggest supply increase since July and shows speculators are not focusing on fundamentals, although that could change in the not-so-distant future.

Next week OPEC will hold an inventory meeting in Iran and will likely not reduce production and could even boost output, which I believe will put "calmness" into the market.

Earlier this week the AP reported seeking to cool market sentiment, the head of OPEC last Sunday said the organization is "concerned" about stubbornly high prices that defy what he described as a well-supplied market and adequate crude stocks worldwide. The statement by Sheik Ahmad Fahad Al Ahmad Al Sabah, OPEC's president and secretary general, was issued as a clear attempt to dampen speculative buying. "Increased investment in commodities by speculators has caused further sizable upward pressure on prices," said the statement, issued by OPEC headquarters in the Austrian capital.

Other OPEC members would like to see prices climb, but fundamental, technical, and sentiment analysis indicates overbought contracts, thus we could see prices moderate, which is good news for those parties interested in the success of US Airways. Therefore, it could be a good time to short the market.

Lark, what does that 25-year Vet have to say?

Regards,

USA320Pilot