Any "Latest & Greatest" about Delta?
03-18-2011, 06:32 AM
Can't abide NAI
Joined APC: Jun 2007
Position: Douglas Aerospace post production Flight Test & Work Around Engineering bulletin dissembler
Posts: 12,037
Which is a position I do not understand.
Reduced capacity results in mush higher unit costs for the remaining capacity. While over expansion surely means death, so does continual retreat.
As we seem to cede the point to point O&D domestic, we become nothing more than a thin network to feed our international operations.
But, that simply exposes us to a greater risk:
IMHO, shrinking is the most risky course we could take. Eventually we will run out of places to consolidate.
Reduced capacity results in mush higher unit costs for the remaining capacity. While over expansion surely means death, so does continual retreat.
According to data released last month from AirFinancials.com, domestic carrying capacity for the nation's legacy carriers declined by 85 billion available seat miles between 2003 and 2009, or by 21% on average. Over the same period, domestic capacity among low-cost carriers Southwest Airlines /quotes/comstock/13*!luv/quotes/nls/luv (LUV 12.22, +0.37, +3.12%) , JetBlue Airways /quotes/comstock/15*!jblu/quotes/nls/jblu (JBLU 5.78, +0.15, +2.66%) , AirTran and four other small carriers rose by more than 84 billion available seat miles.
That's not necessarily a bad thing. Most of those domestic routes the legacy carriers gave up had slim profit margins that the budget carriers were able to widen through their lower-cost model. The real money for the legacy carriers is in the international routes, particularly as it relates to premium-paying business travel.
Delta Air Lines, Trippler notes, appears to be concentrating exclusively on international, while airlines such as Southwest and AirTran have become feeders into the major airport hubs.
"So over the next five years the legacies will become more like trunk carriers with smaller airlines feeding people into the hubs," he said.
That's not necessarily a bad thing. Most of those domestic routes the legacy carriers gave up had slim profit margins that the budget carriers were able to widen through their lower-cost model. The real money for the legacy carriers is in the international routes, particularly as it relates to premium-paying business travel.
Delta Air Lines, Trippler notes, appears to be concentrating exclusively on international, while airlines such as Southwest and AirTran have become feeders into the major airport hubs.
"So over the next five years the legacies will become more like trunk carriers with smaller airlines feeding people into the hubs," he said.
But, that simply exposes us to a greater risk:
Originally Posted by ATW
At the heart of the matter is the rapid growth of the carriers of the Persian Gulf region with their deep-pocket state owners and global ambitions (ATW, 7/10, p. 5). To Assn. of European Airlines Secretary General Ulrich Schulte-Strathaus, Emirates, Etihad and Qatar represent a new type of competitive threat that is incompatible with the existing world aviation order. That’s the message he brought to the International Aviation Club in Washington recently.
The carriers, “two of which have never made a profit” (a reference to Etihad and Qatar), are “operated as an instrument of national strategy and integrated vertically across commerce, tourism and foreign policy,” he declared.
To their owners, Schulte-Strathaus said, they are “just a part—a tool—of this vertically integrated economic chain,” and they are “being driven by a policy which is not compatible with that of the US and Europe,” or “Australia, China, Japan, Canada, Mexico, Brazil, Chile, Korea and so on.” Furthermore, these carriers will take 425 widebodies over the next five years, more than are currently operated by the US major airlines.
The carriers, “two of which have never made a profit” (a reference to Etihad and Qatar), are “operated as an instrument of national strategy and integrated vertically across commerce, tourism and foreign policy,” he declared.
To their owners, Schulte-Strathaus said, they are “just a part—a tool—of this vertically integrated economic chain,” and they are “being driven by a policy which is not compatible with that of the US and Europe,” or “Australia, China, Japan, Canada, Mexico, Brazil, Chile, Korea and so on.” Furthermore, these carriers will take 425 widebodies over the next five years, more than are currently operated by the US major airlines.
03-18-2011, 06:38 AM
Can't abide NAI
Joined APC: Jun 2007
Position: Douglas Aerospace post production Flight Test & Work Around Engineering bulletin dissembler
Posts: 12,037
Along the lines of the article above is Herbst's Chart on Seeking Alpha:
This would certainly make for interesting talk over the water cooler in the CAL / United SLI debate.
This would certainly make for interesting talk over the water cooler in the CAL / United SLI debate.
03-18-2011, 06:40 AM
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
Which is a position I do not understand.
Reduced capacity results in mush higher unit costs for the remaining capacity. While over expansion surely means death, so does continual retreat.
As we seem to cede the point to point O&D domestic, we become nothing more than a thin network to feed our international operations.
But, that simply exposes us to a greater risk:
IMHO, shrinking is the most risky course we could take. Eventually we will run out of places to consolidate.
Reduced capacity results in mush higher unit costs for the remaining capacity. While over expansion surely means death, so does continual retreat.
As we seem to cede the point to point O&D domestic, we become nothing more than a thin network to feed our international operations.
But, that simply exposes us to a greater risk:
IMHO, shrinking is the most risky course we could take. Eventually we will run out of places to consolidate.
03-18-2011, 06:41 AM
seeing the large hubs...
Joined APC: Oct 2006
Position: 73N A
Posts: 3,753
I know, but they must be thinking that tighter capacity means higher RASM. Sure - in a bubble, but Southwest, Jetblue, Virgin America, Spirit and Alligent waiting to pounce on the routes we drop. It's frustrating.
03-18-2011, 07:00 AM
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
SWA has been able to constantly spread their higher costs over more seats, and that is why that up to a few years ago, they were able to look really good on paper. They still are very well run, but absent taking over the international market, they are capped out with regard to their old model. IMO, they realize this, and that is why they bought ATN.
03-18-2011, 07:10 AM
Gets Weekends Off
Joined APC: Aug 2010
Posts: 2,530
But, that simply exposes us to a greater risk:
IMHO, shrinking is the most risky course we could take. Eventually we will run out of places to consolidate.
Originally Posted by ATW
At the heart of the matter is the rapid growth of the carriers of the Persian Gulf region with their deep-pocket state owners and global ambitions (ATW, 7/10, p. 5). To Assn. of European Airlines Secretary General Ulrich Schulte-Strathaus, Emirates, Etihad and Qatar represent a new type of competitive threat that is incompatible with the existing world aviation order. That’s the message he brought to the International Aviation Club in Washington recently.
The carriers, “two of which have never made a profit” (a reference to Etihad and Qatar), are “operated as an instrument of national strategy and integrated vertically across commerce, tourism and foreign policy,” he declared.
To their owners, Schulte-Strathaus said, they are “just a part—a tool—of this vertically integrated economic chain,” and they are “being driven by a policy which is not compatible with that of the US and Europe,” or “Australia, China, Japan, Canada, Mexico, Brazil, Chile, Korea and so on.” Furthermore, these carriers will take 425 widebodies over the next five years, more than are currently operated by the US major airlines.
IMHO, shrinking is the most risky course we could take. Eventually we will run out of places to consolidate.
Originally Posted by ATW
At the heart of the matter is the rapid growth of the carriers of the Persian Gulf region with their deep-pocket state owners and global ambitions (ATW, 7/10, p. 5). To Assn. of European Airlines Secretary General Ulrich Schulte-Strathaus, Emirates, Etihad and Qatar represent a new type of competitive threat that is incompatible with the existing world aviation order. That’s the message he brought to the International Aviation Club in Washington recently.
The carriers, “two of which have never made a profit” (a reference to Etihad and Qatar), are “operated as an instrument of national strategy and integrated vertically across commerce, tourism and foreign policy,” he declared.
To their owners, Schulte-Strathaus said, they are “just a part—a tool—of this vertically integrated economic chain,” and they are “being driven by a policy which is not compatible with that of the US and Europe,” or “Australia, China, Japan, Canada, Mexico, Brazil, Chile, Korea and so on.” Furthermore, these carriers will take 425 widebodies over the next five years, more than are currently operated by the US major airlines.
FlightAware > Live Emirates Flight Status
5 flights (1100 EST) all to/from DXB - US. It's only going to grow.
03-18-2011, 07:19 AM
seeing the large hubs...
Joined APC: Oct 2006
Position: 73N A
Posts: 3,753
They are not the darlings they once were. It is a fine line. With any company many of your costs are fixed, and it makes sense to spread them out over more products. When you reduce capacity, you have fewer products in which to spread these fixed costs out over. In our case that raises CASM. Yes, RASM can increase to a point. It is a fine line, at some point your RASM jump does not cover the CASM jump, hence the phrase, "You cannot shrink to profitability."
SWA has been able to constantly spread their higher costs over more seats, and that is why that up to a few years ago, they were able to look really good on paper. They still are very well run, but absent taking over the international market, they are capped out with regard to their old model. IMO, they realize this, and that is why they bought ATN.
SWA has been able to constantly spread their higher costs over more seats, and that is why that up to a few years ago, they were able to look really good on paper. They still are very well run, but absent taking over the international market, they are capped out with regard to their old model. IMO, they realize this, and that is why they bought ATN.
I guess I see the discussion with the analysts a bit of theater, where we say we're going reduce capacity, and we can point to some reduction, but we don't really. It is in the company's best interest is to upgauge rather than lower capacity, from what I can see. A 757 is a better plane to compete with a 320/737 from a Low Cost Carrier, rather than using a MD88. Lower seat miles, etc. Bigger airplanes does make the pilot force happier, as long as we're not parking smaller planes. (I know that doesn't make sense, but we should use those MD88s on markets that were previously RJs or DC9, etc)
03-18-2011, 07:20 AM
Everyday is a weekend!
Joined APC: Jul 2008
Position: Seasonal Help
Posts: 317
Don't know if you have seen this, but it will make our interport ops more difficult.
Japan?s Airports Have Sufficient Jet Fuel for 10 Days, IATA Says - Bloomberg
Japan?s Airports Have Sufficient Jet Fuel for 10 Days, IATA Says - Bloomberg
03-18-2011, 07:21 AM
seeing the large hubs...
Joined APC: Oct 2006
Position: 73N A
Posts: 3,753
agreed-
FlightAware > Live Emirates Flight Status
5 flights (1100 EST) all to/from DXB - US. It's only going to grow.
FlightAware > Live Emirates Flight Status
5 flights (1100 EST) all to/from DXB - US. It's only going to grow.
03-18-2011, 07:37 AM
Moderator
Joined APC: Dec 2007
Position: DAL 330
Posts: 6,997
...of course, "safe paths" would mean routes that effectively avoid any radiation, hotels in the right locations, and planes on the ground ready to move people. Not putting some b.s. video in your v-file about "radiation and you", along the lines of that useless "malaria and you" stuff we get for Africa.
I agree with everything you say above and we should definitely try to absolutely minimize the radiation exposure. With that said I think the radiation threat is being hyped and sensationalized.
Did we not blow up Atomic bombs in Nevada in the 1940's and 1950's?
I don't think people on the east coast were much affected by radiation.
Did we not blow up Hydrogen Bombs in the pacific in the 1950's?
I don't think people on the California coast were much affected by radiation.
And I am talking about surface testing on the ground and in lagoons.
There is definitely a very real threat, but exaggerating it and causing people thousands on miles away to worry uneccesarily does not do anyone any good. For example, my mother called and said she saw on the news that the radiation will reach California today and that I should stay indoors. Really? Thank you 24 hour news cycle!
Scoop - Throwing caution to the wind and going on a bike ride along the California coast!
Last edited by Scoop; 03-18-2011 at 08:04 AM.
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