Midwest Airlines, future

[tubelcane]

Lumberg is just pissed cause he was called into the CP's office for not having enough "flair" on his uniform.

 

[CitationLover]

Lumberg is just pissed cause he was called into the CP's office for not having enough "flair" on his uniform.

or to get his new stapler.

 

[SkiFishFly]

Did you get the memo?

I'll go ahead and make sure you get a copy of that memo...

 

[IdRtherBsailing]

What if we"re still doing this when we're 65?

I guess it would be nice to have that kind of job security.

 

[BILL LUMBERG]

Bill..... Not to bash you. But AAI doesn't seem to have any problem finding a place to put airplanes. Seems MKE is going to get a couple going to the west coast. And AAI just set another record load factor in Jan with a 14.4% increase in traffic on an increase of only 5.5% capacity....... So tell me, whats coming down the trough? AAI managment has always said that huge increases in fuel would spark consolidation and help AAI. On the on the other hand, a huge drop in fuel would send our costs way down so we would make a ton of money as well... Sounds like AAI and its managment is doing pretty well to me.

I appreciate the discussion GT and I just try to get a rise out of Kharma and he usually is quick to reciprocate......

First of all, congrats on the growth!! That is good for the employees. The management has done well expanding where others have pulled out (read: other big carriers).

There is an underlying weakness though....what happens when this consumer market goes south?? Are you going to go international?? That boosts costs.....Will you find new destinations rather than connect the dots with frequencies?? The RJ's are out there slugging it out to be the lowest bidder on some of the same routes. The legacies have picked up their ball and changed ballparks.....this traffic is not new, just traffic left behind, and your airline adding capacity will not help the revenue......unless its NEW traffic (being mindful of the latest capacity notes from Bob). ANd then there is the Skumbus and Virgin to compete with.

I just can't make sense how Airtran can keep saying it's costs are going lower while you get bigger and older......really fuzzy math.....I know how since the DC-9's got parked, fuel costs dropped, but it has been many quarters since then could it be longer stage lengths?? (only so many people can go to SAN from ATL. What about the employees?? Is there that much turnover that nobody is moving up the scale??? There has to be salary increases. WHat about the maintenance on the jets?? Gone are the days of the jacked up DC-9 by C concourse, but where is the heavy stuff going down??

I also read in Aviation Week that Boeing Capital owns the jets and that a majority of your fleet is leased (so are the big 6's). What are you going to do when the market goes sour?? Park the jets??

My pointing out the doom and gloom is not a wishlist for you guys, I just was curious what has been said about the future over there. The "steady growth" mode isn't going to be good for the balance sheet unless the revenue follows....Leases, High Costs, no revenue, lots of debt, and you are Delta in bankruptcy court......

 

[BILL LUMBERG]

Lumberg is just pissed cause he was called into the CP's office for not having enough "flair" on his uniform.

Ya wanna get some coffee over at Chachki's??

Otherwise, I have to go polish my Commander's uniform buttons......

 

[maxblast72]

I just can't make sense how Airtran can keep saying it's costs are going lower while you get bigger and older......really fuzzy math.....I know how since the DC-9's got parked, fuel costs dropped, but it has been many quarters since then could it be longer stage lengths?? (only so many people can go to SAN from ATL. What about the employees?? Is there that much turnover that nobody is moving up the scale??? There has to be salary increases. WHat about the maintenance on the jets?? Gone are the days of the jacked up DC-9 by C concourse, but where is the heavy stuff going down??

The total CASM is not dropping due to fuel but our nonfuel CASM is still dropping due to several factors. One is the fact that were increasing the number of 137 seat airplanes (737-700) in our fleet. These 737's take the same amount of labor to move as the B717 but in the process you are getting 20 more seats per flight. Also, our number of full time employees per airplane is decreasing. Since we aren't adding alot of new cities, we already have alot of the personel in place to start connecting the dots (basically getting more utilization out of everybody ala Southwest).

Also, we continue to add 200 FO's a year on first year pay, 80 CA's a year on 4th year pay, and probably another 400 FA's a year on first year pay. This is helping us bring our average costs down even as our employees get more seniority.

Even the analysts agree that Airtran has done a good job over the last decade remaining profitable even during some rough times. Down economies are usually good for Airtran as our major competitors on the East coast start to reduce the number of overlapping seats.

 

[BILL LUMBERG]

Good points max....

Some of those I didn't think of and I stand corrected....but I still think that the costs will rise with the seniority even though those extra seats will make up the difference in revenue.....

But relying on other airlines to pull back isn't a business plan....that's what Indy air was thinking and we know how that played out......

Your competition from below still hasn't been addressed though.....

 

[gt1900]

Bill.... AAI isn't relying on other airlines reducing capacity in order to grow. Just look at what AAI is doing in MKE. Other airlines reducing capacity will just help AAI grow faster, it will not stop growth. As far as competition from other carriers. Skybus won't be around very long, and AAI doesn't really compete with them now. Virgin America may become a presence, but, they are already changing their business plan. The announced they are going to be doing a lot of north and south flying on the west coast. Alaska just added tons of flights to protect their turf. As of now, that doesn't effect AAI. AAI has been competing with SWA for a long time now and has been still making money. SWA has stated several times that the airline they worry about is AAI, and not any of the Legacy carriers. AAI has always had a good business plan, and they have shown that they can adjust their plan very quick to respond to changes in the market. Along with good cost control and AAI should be around for a long time, and continue to grow. Everyone said AAI needed MEH more than MEH needed AAI. I think we can see now that might not have been the case. Besides, AAI can always file bankruptcy and stop paying their bills like everyone else...

 

[RIDETHELIGHTING]

You guys need to stop explaining this to BL he has his mind made up. No matter what you say he will find another reason why our business plan is flawed.

 

[BILL LUMBERG]

Bill.... AAI isn't relying on other airlines reducing capacity in order to grow. Just look at what AAI is doing in MKE. Other airlines reducing capacity will just help AAI grow faster, it will not stop growth. As far as competition from other carriers. Skybus won't be around very long, and AAI doesn't really compete with them now. Virgin America may become a presence, but, they are already changing their business plan. The announced they are going to be doing a lot of north and south flying on the west coast. Alaska just added tons of flights to protect their turf. As of now, that doesn't effect AAI. AAI has been competing with SWA for a long time now and has been still making money. SWA has stated several times that the airline they worry about is AAI, and not any of the Legacy carriers. AAI has always had a good business plan, and they have shown that they can adjust their plan very quick to respond to changes in the market. Along with good cost control and AAI should be around for a long time, and continue to grow. Everyone said AAI needed MEH more than MEH needed AAI. I think we can see now that might not have been the case. Besides, AAI can always file bankruptcy and stop paying their bills like everyone else...

Good thoughtful response until the end.....Nice dig!!

You're right, Airtran SHOULD just keep on keeping on, begging for government assistance (slots), taking subsidies from local governments, writing cute messages on their crew busses, whining when they don't get their way in a takeover bid....etc. etc.

You were doing so well GT, and then you start the BK crap......grow up!

Buuuut, if we are being civil, you are 100 percent right about changing your plan, you guys don't put up with unprofitable routes for long....you get out and do something else unlike others who beat the "market share" drum.

 

[BILL LUMBERG]

You guys need to stop explaining this to BL he has his mind made up. No matter what you say he will find another reason why our business plan is flawed.

Yep, you figured me out......

Over the weekend RIDETHELIGHTING came out his hole and saw his shadow.......plan on 6 more weeks of ignorance and stupidity for all on FI.com....

 

[Kharma Police]

Good thoughtful response until the end.....Nice dig!!

You're right, Airtran SHOULD just keep on keeping on, begging for government assistance (slots), taking subsidies from local governments, writing cute messages on their crew busses, whining when they don't get their way in a takeover bid....etc. etc.

You were doing so well GT, and then you start the BK crap......grow up!

(yawn).....There you go again with another temper tantrum! You left out "Forklift Joe" and "ValuJet" this time in your anger, you're slipping! Go spaz out on "Tanker Clown" if your looking for a fight; and don't forget to vote!

 

[RIDETHELIGHTING]

Dont get mad BL . Thats pretty funny.

 

[gt1900]

BL... If you couldn't see the humor in my last sentence then I don't know what to tell you. But, in the airline industry, that seems to be the status quo. Only 1 legacy airline has remained out of bankruptcy. Only 3 major airlines that have been around for a long time have never been in bankruptcy.. SWA, AMR, ALA... So, like I said, in this industry, all you have to do is file bankruptcy and live on government life support..... I didn't mean it as a dig.. I meant it as the truth...