Tinpusher007

Our purpose for using SEA as a hub is to connect pax to trans pacific flights. It’s not a primary domestic hub due to it’s location in one corner of the US nor do we use it for that purpose. We can’t replicate the same critical mass as AK because we don’t have nearly enough gates. Without being able to serve the same number of markets and frequency of flights we lose feed to those international flights and the hub fails. SEA isn’t the same size as LA or SFO nor does it have the same local demand for flights across the pacific. Our strength there would be in using it for connecting traffic. But I submit we need the lion’s share of it. We don’t have that now and likely won’t ever get it unless we buy AK or more gates are built.

That said, almost our entire intl footprint from SEA is served almost exclusively with the ER which will be retiring soon. With nothing left in our fleet in that size and range how do we effectively serve these markets??? An A330 holds almost 100 more pax as a 767. Same with the A350 and 777. This is my point: it would seem that we need something smaller. If those markets needed bigger gauge Id think we’d already be upsizing.

Hank Kingsley

C'mon, that's not even the company line. Cathay jumped on it. It was full, while that doesn't prove my point. I'm sure UAL isn't losing money out of EWR. We are moving the airplane, MSP to ICN. They'll get them to HKG.

Xray678

Retiring soon depends on your definition of soon. The 7ER will be around for 8-10 more years before it is completely gone. Also the 333 seats 293. The 767-300Z (which will become the standard configuration) seats 226. 67 seat difference. A big difference but not 100 more seats.

Trip7

Cathay jumped on it? Cathay Pacific is bleeding money and have a pilot group that is ready to revolt. Not the best example.

Flights were full? I highly recommend paying a visit to network planning in ATL if you can: Occasionally Delta discontinues a route. A recent example is the suspension of the MCO-GRU (Sao Paulo) route. How many times have you flown with someone that says, “well, every time I flew that route it was full” or perhaps “I tried to nonrev on that flight but could never get on because it was full”. Just because a flight is full, doesn’t mean it’s profitable. High Load Factor is not always an indicator of High Yield. NWP refers to this type of a route as a low yield route or negative yield route.

You're sure UAL isn't losing money out of EWR? How are you sure?
Notable Special Charges

For fourth quarter 2018, the company expects to record a special non-cash impairment charge of $206 million ($160 million net of taxes) associated with its Hong Kong routes. The company conducted its annual impairment review of intangible assets in the fourth quarter of 2018, which consisted of a comparison of the book value of specific assets to the fair value of those assets calculated using the discounted cash flow method. Due to increased costs without sufficient corresponding increases in revenue in the Hong Kong market, the company determined that the value of its Hong Kong routes had been impaired. The collateral pledged under the company's term loan, including the Hong Kong routes, continues to be sufficient to satisfy the loan covenants.

The Asia Pacific region is is bloodbath for airlines right now. Delta is careful crafting a revamped network with fuel efficient widebody aircraft on routes that provide sustainable profit:

https://www.scmp.com/week-asia/econo...t-making-money

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sailingfun

Define soon? The seat difference between the A330-900 and the 767 is going to be about 57 seats.

Hank Kingsley

Director of Marketing are you? So it wasn't a customs problem in Seattle? You and your colleagues in Operations should get the story straight. I expect UAL to declare BK soon, cause they aren't pulling out of the Pacific fast enough.

Gunfighter

Customs is a problem affecting all international arrivals, it was not unique to HKG. This will be resolved with the opening of the new facility in 2020. The HKG route was specifically addressed by ops to confirm the route was pulled over yield, not CBP.

UAL won't go bankrupt over their Pacific plans, but they could be making more money with better allocation of their assets. Delta will be providing an update on this in nine more days.

GucciBoy

Are you in the Ascend group or just quoting their talking points?




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gloopy

That's the purpose of any hub, and we're doing that currently way more than we were before, still growing and still building infrastructure there (at insane airport mafia shakedown rates and pacing, obvsly).


Nor do we need to use it for that purpose. We're doing almost hourly large 737 service from LAX alone when just a few years ago we were doing zero. Ditto AK overlap over tons of other routes. It doesn't have to be the hub and spoke capital of the world to rule them all, but its doing well, growing faster than it can handle (city/area and airport) and we're building infrastructure to capture more of that.

We don't need to replicate the full AK footprint and we're building more gates.

Much of what AK does that we don't already do is small market botique flying. While that could generate theoretical connection traffic, the vast majority of it doesn't and isn't needed for that and that's not why they do it in the first place. Santa Rosa and Walla Walla might generate a seat or two of conex traffic but its not going to make the difference for anyone.

The hub isn't failing and is growing so fast its up against the redline for how fast it can physically grow for us. IDK what more you'd expect us to do, other than buy AK which isn't needed anyway and if we did we'd have to divest a huge portion of it immediately in the first place.

Doesn't have to be. We're building the dominant presence there from a well rounded perspective and we will be incredibly tough to beat there.

We're not buying AK, but the whole airport is a giant construction project already. Not sure what more could be done.

Soon? We'll have lots of ER's for quite a while. In any case I'm not saying we will rule SEA to the extent of monopoly fortress hub or anything. We probably won't and we don't need to anyway. But we are doing VERY well there and growing as fast as we can. Its already beyond a catch 22 at this point anyway. Even if we needed AK, which we don't, we're already way too big there to even be allowed to get them.

We'll be just fine there, even if we never harness that sweet connection capacity from Kelowna or Yakutat.

Trip7

Quoting their talking points as it's perfectly worded to counter the "but the flight was Full" talking points you constantly hear