Jinks

Ah, Mrs. Peel. I wonder if Mr. Steed ever got some of that?

Jinks

80ktsClamp

Soooooo... since you never actually addressed what he wrote and just wrote that big chunk of "internet bloviation," is what you're saying that it WAS cost neutral?

scambo1

I dont maintain an loa library, I read em and trash em. Like I said, it (RT) started being a thing about 5 years ago due to a reason...whatever that reason is I cannot say, I dont remember. And about 4 months later, the same scheduler who brought it to my attention told me the company complained hard about it and dalpa relented...making RT rare.

If I'm totally full o crap, it wont be the first or last time. I rolling thundered all those months.

Jay5150

I think that when green slips to line holders dropped to 1.5 it certainly affected it. But the biggest drivers, by far, of the thunder are:

1. Being short in a category (shorter the better)

2. Getting the payback days.

The summer of '07 and to a little lesser extent '08 was unbelievable. (ER in NYC). I didn't really try that hard as a commuter and also because I didn't fully realize how rare the situation was. Still, my best month was 146 credit for 76 block and ended the year with an extra 23 days vacation for the next year. I heard a rumor of an FO who did back-to-back 200 hour credit months.

The messages I was getting from scheduling almost made me feel sorry for them................almost.....

capncrunch

Do you feel like dollar for dollar we as pilots got a good deal out of that trade? We got a small payback for what amounts to a huge savings to the company. ALPA gave that away, we should have gotten more. Pathetic.

scambo1

Despite what the unpublished pilot surveys said, we all are pretty aware that when the MEC pus something out for a vote...and says vote for it, the pilots will pass it 60-40 everytime. BTW, when the MEC says vote for it, that is propaganda.

capncrunch

That is correct. We gave that away for a pittance.

capncrunch

I don't mind the seat lock just that we gave it away for nominal payback.

80ktsClamp

I think upping the pay as well as us becoming "overstaffed" had more to do with that.

The only rolling thunder I see these days are me giving my newborn a bottle and hearing it rumble out down south at the exact same time!

forgot to bid

Q2 Earnings Call

Kevin Crissey - UBS
Hi. Thanks for taking my questions. CASM ex-fuel, I guess I just wanted to go back over the timeline a little bit. I think it was back say maybe October 2010, I think it was somewhere in that vicinity, you guys had targeted 2011 to be kind of flat with 2010. And then I think it was revised at your Investor Day and then you’ve cut some capacity. But what I’m trying to understand is, I didn’t see these CASM ex-fuel pressures coming and I think I didn’t see them partly because I think you guys had guided that they weren’t really there or at least one point you had guided it that way, or maybe I’m misreading it. But I wanted to understand what changed from that point to today in terms of your pressure on the CASM ex-fuel line.

Richard Anderson
This is Richard. First, if you look out over the past two years, we have pushed capacity down pretty hard. We have viewed capacity as the real lever to push our business, and it has put real pressure on our non-fuel CASM. If you look where we’ll be by the end of this year in 4Q and compare it to two years ago when we were giving that guidance, we’re going to probably be down 5% to 6% in overall system capacity and the industry is probably on the main grown a bit. So if you think about being down 5% instead of being up 1% to 2% each of those two years, the equation is very much different on the nonfuel line.

The second piece is, is that we have along the way made investments that are the right investments in our product, in our employees, and you can see it in our revenue performance versus the industry. Hence our drive to drive another $1 billion of structural costs out and our push in the refinery to make up on a total basis, total unit cost basis, those inflationary pressures that we see.

Ed Bastian
And I’d say the other thing, Kevin, there that we did not necessarily forecast or see coming as clearly is the opportunity we had with our pilots to do the contract early. It’s going to pay significant dividends over time as it will have a big cost return to it, not just in terms of improved productivity, but the ability to fairly substantially restructure the domestic fleet. But that those costs came in right away so that’s in our September guidance as well, and that was another big piece.

I guess it makes sense, if you keep cutting capacity it drives up your non fuel CASM. So the last thing you're going to do is increase CASM with a pilot contract. You can give a pay increase but the whole package needs to be one that reduces pressure on CASM ex fuel right?

More...
The revenue opportunity is substantial. We’ve said any number of times the 50-seaters have been the perfect storm for us because not only is it a cost opportunity, it’s also an airplane our customers don’t particularly prefer. So as we up-gauge, and that was sitting behind the 717 strategy and that’s why they are linked at some level as well as getting some incremental two-class 76-seat RJs, we’re going to have a fairly substantial up gauge in margin improvement, cost reductions, some revenue enhancements. And from the capital efficiency standpoint, with where we were able to acquire the 717s is going to improve those returns all the more. So it was a win all the ways around.

More:
First, the combination of our new pilot contract and this acquisition of the 717s allows us to accelerate our domestic fleet restructuring. We expect the 717s and the new 737-900ERs that begin delivering next year as well as bringing in 21 additional low capital MD-90s will allow us to retire older mainline aircraft and at least 200 50-seat regional jets over the next two to three years.

The retirement of the 50-seat regional jets is one of the single biggest opportunity costs we have. The up-gauging strategy will improve our efficiency by lowering our unit costs while simultaneously improving our product while maintaining our capacity discipline. Secondly, we are aligning our head count with our reduced capacity and recently had over 2,000 employees elect to participate in our voluntary early retirement program. These employees will retire by the end of the year with limited backfill, which will continue to result in improved productivity.