Fleet Discussion and News
04-04-2020, 09:52 AM
#801
Banned
Joined APC: Mar 2018
Posts: 1,358
I believe that the comment was strategically placed to appeal to the audience. Remember that SK even acknowledged that the 50 seat question wasn’t asked but he answered it anyway.
Pretty much all 50 seater are owned free and clear by now. You can pick up a 200 for about $300K without engines. A set of midtime engines sets you back another $2M or so. The majority of these engines are owned by SKYW. They even lease some of their inventory to DL.
Bottom line - they can offer 50 seat service at rock bottom price as long as oil is cheap, pilots are available and there is gate space. The latter was the most limiting factor up to a few months ago.
UA is a network carrier. The more you feed into a hub the more it perpetuates the network effect. The opposite is true too. The more you draw it the hub becomes exponentially less attractive to the point were it would make more sense to abandon a hub altogether rather than splitting traffic between UAs existing hubs. CLE and LAX would be the most likely casualties.
you want to maintain as many spokes as possible and that is where the 50 seater will continue to have a role - specifically if we do not give up any scope.
Pretty much all 50 seater are owned free and clear by now. You can pick up a 200 for about $300K without engines. A set of midtime engines sets you back another $2M or so. The majority of these engines are owned by SKYW. They even lease some of their inventory to DL.
Bottom line - they can offer 50 seat service at rock bottom price as long as oil is cheap, pilots are available and there is gate space. The latter was the most limiting factor up to a few months ago.
UA is a network carrier. The more you feed into a hub the more it perpetuates the network effect. The opposite is true too. The more you draw it the hub becomes exponentially less attractive to the point were it would make more sense to abandon a hub altogether rather than splitting traffic between UAs existing hubs. CLE and LAX would be the most likely casualties.
you want to maintain as many spokes as possible and that is where the 50 seater will continue to have a role - specifically if we do not give up any scope.
04-04-2020, 10:12 AM
#803
Banned
Joined APC: Mar 2018
Posts: 1,358
04-04-2020, 10:23 AM
#804
Gets Weekends Off
Joined APC: Aug 2018
Posts: 253
Because those 36 seats are typically better yielding and less vulnerable to HK/SWA/etc on the domestic side and act as a fortress on the mainline international feed ... if those options didn’t exist then you’d be competing on price against heavily subsidized foreign carriers with superior products...thus eroding your international loads and yields.
04-04-2020, 10:27 AM
#807
Gets Weekends Off
Joined APC: Mar 2014
Posts: 361
Yes...historically of course.
Because those 36 seats are typically better yielding and less vulnerable to HK/SWA/etc on the domestic side and act as a fortress on the mainline international feed ... if those options didn’t exist then you’d be competing on price against heavily subsidized foreign carriers with superior products...thus eroding your international loads and yields.
Because those 36 seats are typically better yielding and less vulnerable to HK/SWA/etc on the domestic side and act as a fortress on the mainline international feed ... if those options didn’t exist then you’d be competing on price against heavily subsidized foreign carriers with superior products...thus eroding your international loads and yields.
Exactly. Those 36 people don't stop at the hub.. They fill up the 250 seat planes later on
04-04-2020, 12:57 PM
#808
Gets Weekends Off
Joined APC: Dec 2018
Posts: 1,090
the answer was very black and white a few months ago. I agree that we will see 59 seater demand decline but I don’t think it will vanish over night.
04-04-2020, 01:50 PM
#810
Gets Weekends Off
Joined APC: Oct 2010
Posts: 2,639
Bingo.
Fly the 550 into the smallest markets, and scale up to the 170 and mainline from there. The trip costs of the 550 are not that much more than the CRJ200 or E145 and it's a far better product which will be important in attracting and retaining the high rollers connecting in the hubs.
The conventional single class 50-seaters were already on borrowed time at UAL and now Covid-19 has accelerated the plan by years.
Fly the 550 into the smallest markets, and scale up to the 170 and mainline from there. The trip costs of the 550 are not that much more than the CRJ200 or E145 and it's a far better product which will be important in attracting and retaining the high rollers connecting in the hubs.
The conventional single class 50-seaters were already on borrowed time at UAL and now Covid-19 has accelerated the plan by years.
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