Who Will WN Pick On Next?

[More Facts and Less Emotion]

If US is successful in a cost restructuring that truly gets costs competitive with Southwest, that will mean WN will go somewhere else to feed it's growth machine. So who is at risk then?

 

[mweiss]

I voted NW because they're the most vulnerable right now. There isn't any WN presence to speak of in their territory. MSP and DTW have pretty decent O&D as well (especially the growing MSP).

UA: DEN is already covered by F9, ORD is in the WN MDW catchment, SFO is in the OAK catchment, and IAD is in the BWI catchment.

DL: ATL is already covered by FL, DFW is in the DAL catchment, WN already won in SLC...maybe CVG?

AA: ORD is in the MDW catchment, DFW is in the DAL catchment, MIA is in the FLL catchment, and JFK is covered by B6

CO: IAH is in the HOU catchment, CLE isn't worth going after, and EWR is sorta covered by B6's JFK hub

HP and AS: The battles are over.

FL and B6: those battles are the last ones WN wants to get into right now.

 

[justanadd]

I voted NW because they're the most vulnerable right now. There isn't any WN presence to speak of in their territory. MSP and DTW have pretty decent O&D as well (especially the growing MSP).

Southwest is in DTW and did at one time try to fly out of Detroit City Airport and that effort failed. Northwest is no USAir. They are a fierce competitor and will there is a reason they have not started MSP service. NW will defend it's territory you can bet on that.

 

[mweiss]

Yeah, I remember the Detroit City debacle, but I forgot that they fly to DTW at all.

The reason I forgot to mention re: NW's vulnerability is their "don't laugh, it's paid for" fleet. With the recent jump in fuel prices, that's gotta be putting the pinch on NW, making them more vulnerable than they were two or three years ago.

 

[BoeingBoy]

mweiss,

Over the long run (decade or so) you're right - the inefficient fleet hurts. In the shorter run, a few million to refurbish a DC-9 vs $30-40 million for a replacement buys a lot of fuel - even at today's prices. Once you near the point where the DC-9's total cost will become greater, you can get that replacement and not have spent a dime extra.

Jim

 

[mweiss]

But they're well into the long run with these aircraft. IIRC, some were flying for Bonanza, for goodness sake! They refurbed them years ago. How high must fuel costs get before these no longer can compete against 73Gs?

 

[BoeingBoy]

Oh, forgot the question asked in the thread title...

I disagree with NW (sorry mweiss) for one reason. What's between the northern west coast and ORD - no big population centers except MSP. Move a little further south to west coast - STL and what's there, LAS & SLC.

Actually, I think WN will be busy consolidating it operation in PHL for a while. Not that they won't add new cities, just no new focus cities for a year or so. So I guess my answer is "none of the above".

Jim

 

[mweiss]

Believe it or not, Jim, I agree with your "none of the above" answer. But NW was the runner-up for me. Would you choose someone else?

 

[BoeingBoy]

mweiss,

"How high must fuel costs get before these no longer can compete against 73Gs?"

You have to remember that it isn't the total usage x fuel cost, it's the difference in fuel usage x fuel cost - a lot lower number. I never flew the 9, but I suspect that there is only a 10-15% difference in fuel burn per seat mile on equivalent routes.

And look at the possible advantage of waiting. a 737NG seats 140 something - not exactly a 9 replacement. The E-190 is coming in 2 years - less fuel burn than the 737NG and a true 9 replacement, size-wize (higher CASM than 737NG but about the same as the 9)

Jim

ps - there IS a maintenance penalty for the older 9 vs the newer plane that has to be taken into account.

 

[mweiss]

Yeah, the maintenance aspect did certainly cross my mind. And it's gotta be a doozy, because you're not only paying for the line mechs, you're also paying for the downtime. Granted, you're not paying for leases, so keeping a couple of spares around doesn't cost much.

The 736 is a 100-seater, so that's a more apples-to-apples comparison than, say, the larger NGs. And isn't the 717 a "real" 9 replacement? I mean, it's even of the same lineage.

 

[BoeingBoy]

mweiss,

missed a couple of your questions reading other threads - I'll try to wrap them up here.

1) Second choice for the poll - Delta (CVG or SLC) though SLC is purely a guess since I don't get that far west and have no idea what's going on out there.

2) 737-600NG - I'm not aware of anyone getting that model but could be wrong (is there a -600NG?). If it exists, it should be about the -300 size - even the 737-200 was bigger than 100 seats (112 in ours when we had them). There was the 737-500, which was -200 size, but Boeing is building only NG's now and not many carriers got the -500.

717 - Boeing is making noises about shutting down the production of that - it was an orphan (from MD acquisition) and if I'm not mistaken Airtran is the only US carrier that ordered it. It is the right size though.

The best DC-9 replacement I can think of right now is the E190 (ok, when it's available). Of course, they could go with something bigger than the 9 which opens up the 737NG and Airbus (which they already have so fleet commonality)

Jim

 

[Winglet]

The premise of the topic is wrong. Does anyone here think that Dave Siegel can turn U into a 6 cent airline??? He's had a year to do something . . . ANYTHING, and he hasn't done SQUAT. He wants to put lipstick on the pig by dumbing down the union contracts, then try and sell it . . . . only that plan won't work either because there's very little that U has that anyone would want or could legally obtain.

 

[mrman]

mweiss,

Over the long run (decade or so) you're right - the inefficient fleet hurts. In the shorter run, a few million to refurbish a DC-9 vs $30-40 million for a replacement buys a lot of fuel - even at today's prices. Once you near the point where the DC-9's total cost will become greater, you can get that replacement and not have spent a dime extra.

Jim

Not to mention the aged DC9 beats a brand spanking new RJ from a customers point of view any day. If you are going to compete for customers based on customer wants vs costs, an 'old' DC9 with 1rst beats an RJ hands down competing with a new WN with decent seat pitch and leather seating.

 

[diogenes]

As it stands, I don't think U can make WN cut and run.



Assume the break-even CASM PHLLAX becomes 6 cents. WN is already there: assume U gets there. Assume the average fare becomes $200.

What's to stop WN from lowerering the fare to $100 - they can afford to bleed a lot longer than U can.

What's to stop WN from lowering their CASM? They can go from 6 to 4 a lot easier than U can.

This is NOT to say U cannot compete. It is to say simply lowering CASM, which is what I got out of dave's soliloquy, in and of itself will not suffice.

 

[TheDog2004]

DL: ATL is already covered by FL, DFW is in the DAL catchment, WN already won in SLC...maybe CVG?

WN won in SLC?

Based on what? More flights? More cities?

WN is going after UAL next, kids.