Us Cuts Flights At Phl, Fll, And Clt

[USA320Pilot]

Industry fundamentals are deteriorating, not only for US Airways but every high-cost legacy airline.

For example, today United announced a “whoppingâ€￾ $326 million net loss in January. That’s over $10 million per day! In addition, the company’s operating loss was $151 million, which is nearly $5 million per day and it had $138 million in reorganization expenses or paid about $4.5 million per day for its bankruptcy.

These losses for United or for any legacy carrier are unsustainable.

At least there was some good news today. Reuters reported “a broad-based attempt by major U.S. airlines to raise ticket prices this week may succeed where past efforts have failed as struggling carriers try desperately to blunt the impact of soaring fuel prices, analysts said on Friday. This week, major airlines, including Northwest, American Airlines, America West and Delta Air Lines, have raised ticket prices, primarily on long-haul flights. They hope that increased ticket demand ahead of the spring and summer travel season will give the fare hikes staying power.

Several previous attempts by carriers to raise fares have wilted in the face of lower-priced competitors. But some analysts say a growing view that oil prices will remain high has fueled the sense of urgency that will embolden the airlines to shift their oil costs to passengers. "They have to stick," said aviation consultant Michael Boyd of the higher ticket prices. "We cannot sustain the existing fare structure. It's imperative that fares go up. If fares don't go up, airlines are going to go down."

Interestingly, as of late Friday afternoon Continental, US Airways, and United had not yet raised fares.

Regards,

USA320Pilot

 

[wnbubbleboy]

Your post is a little confusing.. Could you clear up what you mean?

Is Southwest going to get an additional 30 -300's? Is that what you are saying?

Well US Airways is getting rid of 26 Round Dial -300's, want them?

Southwest could use them in PHL and PIT.. They planes know those airports pretty well so they won't mind flying for WN..

Word of advice.. Don't take US N384AU, N573US and N350US.. They all have issues.

[post="250886"][/post]​

Of course, You know how rumors are.

What I understand it is the WN will get 30 -300's via lease. They will slap a southwest emblem on the side reconfigure them for 137 seats and fly them as is until the aircraft is turned back in to the lessor (each time a 700 is delivered one -300 goes back to the lessor). That's sounds weird but they did that back with Morris aircraft until they got into heavy "D'.

 

[justaumechanic]

USA320..

Nice letter.. It should be more like "Dear Fellow Pilot, due to things spiraling out of control we are going to have to cut your pay again and get rid of more of you"..

Loss of 36 aircraft with a loss of ASM's and a reduction in flights leads in only one direction.. Loss..

Someone posted a comment saying the loss of the aircraft while keeping the same flight schedule would increase profits is correct.. Losing the aircraft and cutting flights does not quite fit into your dream world does it.

 

[Winglet]

$4.5 million a day in reorg expenses. Boy, somebody is getting really really rich siphoning off some of that.

 

[N924PS]

Former ModerAAtor:

Since you seem to be so smart, how would you deal with the current enrgy prices and low revenue environment?

Regards,

USA320Pilot

[post="250856"][/post]​

Let's see. Except for SW, everyone is dealing with the high fuel prices. Operationally, single-engine taxi, tankering, and dispatch fuel adjustments are about all that can be done to save fuel. Oh, and the "Rolling Hub" in Philly to minimize tons of fuel burned by aircraft going nowhere.

Revenue is another story. I'm sure with the departure of Mr. Baldanza, his successors, Mr. Ashby and Mr. Nocella are spending sleepless nights trying to increase the revenue stream. Kind of disappointing to see more aircraft leaving and the pull down of just announced new routes.

Realistically, U should become the "Low Cost Global Carrier of Choice." Get more widebodies and go for it to more Eurpoean destinations. Only a matter of time before someone else does it. With our new low labor costs an A330 Captain at U makes less than a SWA 737 Captain. And so on down the line. Be a leader instead of a follower for a change. No more stinking RJ's. Only 170/190 Embraers and larger needed for the 21st Century. Just ask Mr. Boyd.

 

[eolesen]

Since you seem to be so smart, how would you deal with the current enrgy prices and low revenue environment?

[post="250856"][/post]​

This isn't because of fuel or revenue. It's because FLL was a half-baked idea to begin with, and because WN came to kill you and is slowly succeeding.

Simply put, US just didn't make the most out of its first bankruptcy.

As harsh as the cuts were the first time, they didn't go far enough. That goes for expenses, leases, and yes, labor.

For starters, I would have used S1111 during the first bankruptcy to dump the 737, 757, and 767 fleets. One of US's biggest inefficiencies is having too many types for its size.

PIT should have been downsized years ago. Service was out of whack with the local market. Instead, it appears to have been held onto out of historical significance...

Instead, management rushed out of bankruptcy in record time, instead of facing the fact that US was still not in the best of shape. Sort of like having a quadruple bypass due to extreme blockage, but not changing your diet or lifestyle....

Had the contract changes being made now been done two years ago, it would have have been painful but you'd also have had two years to build up a potentially stronger balance sheet, especially with the ATSB loan.

And had US actually done something about its pricing (similar to what HP did), it's unlikely that PHL would have looked so appealing to WN.

 

[FWAAA]

$4.5 million a day in reorg expenses. Boy, somebody is getting really really rich siphoning off some of that.

[post="250893"][/post]​

To be fair, most of the $138 million is non-cash accruals; the actual cash paid out to lawyers, accountants, consultants, parasites, etc. is nowhere near that much per month.

Don't know yet what the accruals represent, but could be lost value on rejected aircraft, write downs of other rejected property, etc.

 

[mweiss]

Loss of 36 aircraft with a loss of ASM's and a reduction in flights leads in only one direction.. Loss..

[post="250892"][/post]​

Overall, the return of aircraft will result in a net reduction of only 14 flights systemwide compared to the February 2005 schedule, and the discontinuation of service to two destinations, as most service will be replaced with regional jets or by increased utilization of the mainline existing fleet. Even with the May 2005 capacity adjustments, systemwide available seat miles (ASMs) are expected to increase between 4 and 6 percent year-over-year.

One really has to read between the lines, since this paragraph is contradictory at first blush. After reading it three times, I understand it to mean

• We had to cut 14 flights, all mainline
• We cut other mainline flights too, but we're replacing those with Express, most likely from Air Whiskey
• Two destinations lose service entirely, so we can lay off everyone in that outstation.
• ASMs will still rise by 4-6%. If there's a net loss of 14 flights and an increase in ASMs, then average stage length must be rising.

Unexplained by the press release:

• How many mainline flights in total will be cut?
• What will the new CASM be? Increasing stage length should reduce CASM, but shifting mainline to fee-for-departure should increase CASM. Which effect wins out?

 

[usairways_vote_NO]

Former ModerAAtor:

Since you seem to be so smart, how would you deal with the current enrgy prices and low revenue environment?

Regards,

USA320Pilot

[post="250856"][/post]​

Well first off you could admit you were wrong again. Excuses Excuses

Nobody likes to see aircraft and people leave the company, but with soaring energy prices and cutthroat LCC expansion, its  understandable to see more “painfulâ€￾ moves.

[post="250854"][/post]​

I beg to differ there is more then one on here that would love to see a certain pilot be dealt some of those "painful moves" up to and including layoff

of course not but with high energy prices, how do would you solve the problem?

[post="250865"][/post]​

UMMM as I been saying all along round 4

 

[funguy2]

[*]We cut other mainline flights too, but we're replacing those with Express, most likely from Air Whiskey

Air Wisconsin? Says who? It may be true, but it certainly has not been announced...

Otherwise, I find this move interesting... Only 20 days into the FLL focus city and cuts are being announced... Since I am betting the FLL focus city is BBB's baby, I would expect to see Spirit add flights in these markets.

Otherwise, this move will ultimately increase CASM. We have to remember that just because US Airways doesn't operate all its Regional Jets, it certainly pays for them. The "balance" between RJs and Mainline just went another 11 aircraft in favor of Express... And how many LCC's operate large fleets of RJ's? One, and it wasn't profitable last quarter (HP).

 

[usairways_vote_NO]

Moreover, the company said, “US Airways does not foresee employee furloughs as a result of these actions.â€￾

[post="250874"][/post]​

Another lie or wont the mechanics in CLT hangar count to you?

 

[ringmaruf]

Overall, the return of aircraft will result in a net reduction of only 14 flights systemwide compared to the February 2005 schedule, and the discontinuation of service to two destinations, as most service will be replaced with regional jets or by increased utilization of the mainline existing fleet. Even with the May 2005 capacity adjustments, systemwide available seat miles (ASMs) are expected to increase between 4 and 6 percent year-over-year.

One really has to read between the lines, since this paragraph is contradictory at first blush. After reading it three times, I understand it to mean

• We had to cut 14 flights, all mainline
• We cut other mainline flights too, but we're replacing those with Express, most likely from Air Whiskey

• 
  
  I don't think this has anything to do with AWAC, but rather the deliveries to PSA and MidAtlantic through GECAS.
  
  

  [*]Two destinations lose service entirely, so we can lay off everyone in that outstation.

  
  Just to clarify, US only has a handful of employees at the international outstations. Most are contractors.
  
  

  [*]ASMs will still rise by 4-6%. If there's a net loss of 14 flights and an increase in ASMs, then average stage length must be rising.
  

  [post="250898"][/post]​

  
  I believe you're reading this wrong. The net loss of 14 flights compares to the February 2005 schedule, with the increased flying. The increase in ASMs of 4-6% compares to the May 2004 schedule. It makes sense if you consider they claim to have increased utilization by about 10% year-over year, and are returning about 5% of the fleet.

 

[sfb]

US Airways said, “the return of aircraft will result in a net reduction of only 14 flights systemwide compared to the February 2005 schedule, and the discontinuation of service to two destinations, as most service will be replaced with regional jets or by increased utilization of the mainline existing fleet. Even with the May 2005 capacity adjustments, systemwide available seat miles (ASMs) are expected to increase between 4 and 6 percent year-over-year.â€￾

The problem is, as others have stated, that the increase in systemwide ASM's looks like it will be almost entirely due to increased RJ capacity (if not more, given that Express capacity may end up offsetting decreases in mainline capacity). While this could be helpful in markets where US is unable to fill mainline jets, flying more of the system with high-cost RJ's doesn't help the company respond to declining yields.

By flying its remaining fleet more hours per day the company will increase its aircraft productivity and lower aircraft ownership costs. In addition, the company will be able to fly more its current schedule less 14 flights will less people due to increased productivity, which will also lower unit costs.

Well, again, this doesn't tell the whole story. Systemwide departures (or is it round-trips?) will only decline by 14, but mainline departures will clearly decrease by far more. The decreases outlined in the company's news release amount to 34 fewer mainline departures.

What's even more troubling to me is the timing of the reduction. Cutting flights going into the summer travel season, with its increased demand, does not say to me that things are going as they ought to be.

 

[usairways_vote_NO]

Otherwise, I find this move interesting... Only 20 days into the FLL focus city and cuts are being announced...

[post="250900"][/post]​

Could it be that USAirways is in such bad shape due to management that they have to react to their mistakes more quickly or face the ultimate?

 

[USA320Pilot]

The major problem is simple: it's primarily fuel, fuel, fuel...

Look at United who said today that their January "fuel expense for the month was $63 million higher than January 2004 on flat capacity." As far as US Airways, today's NYMEX Crude Oil Futures Closing price was about $51.50, which is about $7.50 more than the Transformation Plan budget and equals about $15 million more per month in additional fuel expense.

Regards,

USA320Pilot