NWA MEC Buffoons

[~~~^~~~]

Thanks for posting a good report.

Report makes the point:

Northwest deserves honorable
mention, however, for making the most of
an old-technology fleet and achieving very
low unit costs – for a legacy carrier – with
very low capital expenditures. It remains at
risk, however, to escalating fuel prices. Only
time will tell whether its gamble continues
to pay off.​

Fuel was assumed at 70¢ a gallon back in 2003.

I think the equation has changed.

 

[Fly4hire]

Thanks for posting a good report.

Report makes the point:


Fuel was assumed at 70¢ a gallon back in 2003.

I think the equation has changed.

The increase in fuel prices effects everyone equally. The CASM should be a linear increase relative to the cost of fuel less adjustments for labor and efficiency. Interesting on that note that NWA has lower costs and better utilization of crews since our last TA , but with the overall effect of lowering CASM.

It would be very interesting to see a current comparison, including RJ's.

My point is the constant droning about how DC9-30/40/50's will be parked, yet DC9-80/88/90's are so vastly more efficient and immune is utter bunk.

 

[FDJ2]

My point is the constant droning about how DC9-30/40/50's will be parked, yet DC9-80/88/90's are so vastly more efficient and immune is utter bunk.

No one is immuned, but but some fleets are more vulnerable than others. It is highly unlikely that a 35 year old DC-9 fleet will stick around much longer.

There will continue to be a role for the DC-9 in the short term, mostly by default since NWA has no replacement orders, but definitely not much longer.

There are two costs to consider, the cost of ownership and the cost of operation.

From the link you provided:

Northwest’s Gamble
"A decade ago Northwest made a strategic
decision to keep operating its fleet of DC-9
aircraft, saving on the acquisition costs of
new aircraft but risking the higher
maintenance and fuel costs associated with
an aging, old-technology fleet.4
The significantly higher unit fuel
consumption of the old-technology
aircraft is reflected in Figure 13. Northwest’s
DC-9-10 produces only 28 ASMs per gall
on of fuel. At the other extreme, Delta’s
MD-90s produce more than twice as many,​

just under 60 ASMs/gallon."

The Direct operating costs/ASM for fuel and oil at 70 cents a gallon:

NWA DC-9-30: 2.29

DAL MD-88: 1.51
DAL MD-90: 1.08

"As Northwest’s unit costs demonstrate, however, it has been able to overcome the fuel-efficiency disadvantage at average costs of 70¢ per gallon, at least for so long as it is competing with other legacy carriers. See Figure 14.

But what happens with higher fuel costs? In Figures 15 through 17 we show cost curves for Northwest’s DC-9-30s, Delta’s MD-80s, and Airtran’s B 717s at various fuel prices ranging from the 70¢ per US gallon we used in our comparisons to a high of $2.00/gallon. As we write, fuel is selling in the $1.10 -$1.20 range.​

We set out the underlying data in Figure 18. As fuel prices rise, the cost-disadvantages of Northwest’s fuel-inefficient aircraft increase.​

Thus, between 90¢ and $2.00 per gallon, Northwest would experience a unit cost increase at 800 miles from 10.7¢/ASM to 13.5¢/ASM, a nearly 3.00¢ increase in total unit costs but, more importantly, a one cent per ASM increase in its disadvantage versus Airtran’s B 717. In contrast, with its more fuel efficient MD-80s Delta would see its cost disadvantage versus Airtran increase by one half cent per ASM."​

http://www.unisys.com/eprise/main/admin/micro/doc/Feb_Mar.pdf​

 

[vprMatrix]

The increase in fuel prices effects everyone equally. The CASM should be a linear increase relative to the cost of fuel less adjustments for labor and efficiency. Interesting on that note that NWA has lower costs and better utilization of crews since our last TA , but with the overall effect of lowering CASM.

It would be very interesting to see a current comparison, including RJ's.

My point is the constant droning about how DC9-30/40/50's will be parked, yet DC9-80/88/90's are so vastly more efficient and immune is utter bunk.

You hit the nail on the head with this statement. The CASM in '03 is much different today, for everyone.

Of course there are some issues with this data which shows AirTran at a 2.5 cent lower CASM than NW and which is even a little lower than Delta M80s. Of course it shows that the MD90s are well above both the M80 and the DC9 ???

I think that one of the problems is the way the airlines report this information as well as the effect of book keeping at different airlines and the overall cost of an individual airline doing business (crews, mtc, training, staffing, etc,).

You are correct in your point that the 88s are not immune to the cost of gas.

 

[FDJ2]

You are correct in your point that the 88s are not immune to the cost of gas.

No aircraft is, but some are more vulnerable than others. According to the report, a NWA DC-9 produces only 28 ASM's per gallon of fuel, while a DAL MD-90 produces 60.

Northwest’s Gamble
"A decade ago Northwest made a strategic
decision to keep operating its fleet of DC-9
aircraft, saving on the acquisition costs of
new aircraft but risking the higher
maintenance and fuel costs associated with
an aging, old-technology fleet.4
The significantly higher unit fuel
consumption of the old-technology
aircraft is reflected in Figure 13. Northwest’s
DC-9-10 produces only 28 ASMs per gall
on of fuel. At the other extreme, Delta’s
MD-90s produce more than twice as many,​

just under 60 ASMs/gallon."

 

[clippyrip]

,,,,,,,,,,,,,,

 

[clippyrip]

Maybe you could amend LOA 19 and give the MD88s a widebody pay category and move the A330 below that on the pay scale.

 

[Occam's Razor]

According to the report, a NWA DC-9 produces only 28 ASM's per gallon of fuel, while a DAL MD-90 produces 60.

Northwest’s Gamble
"A decade ago Northwest made a strategic
decision to keep operating its fleet of DC-9
aircraft, saving on the acquisition costs of
new aircraft but risking the higher
maintenance and fuel costs associated with
an aging, old-technology fleet.4
The significantly higher unit fuel
consumption of the old-technology
aircraft is reflected in Figure 13. Northwest’s
DC-9-10 produces only 28 ASMs per gall
on of fuel. At the other extreme, Delta’s
MD-90s produce more than twice as many,​

just under 60 ASMs/gallon."

Looks like we should park all our DC-9-10's then, eh?

There's a point in time where the slight fuel inefficiency metric overcomes the rest of the block items on the balance sheet.

Items such as acquisition costs, parts (parts you remove from your cast-off hulls are pretty cheap), and insurance (DC-9 Hull Coverage = 0), are factors that don't always appear in each analyst's "Direct Operating Cost" figure. And that's BEFORE we question the legitimacy of providing CASM for an aircraft we haven't operated in 6-years.

 

[JohnDoe]

No aircraft is, but some are more vulnerable than others. According to the report, a NWA DC-9 produces only 28 ASM's per gallon of fuel, while a DAL MD-90 produces 60.

That 28 ASM's per gallon of fuel for the DC9 you are quoting is for the DC9-10. NW no longer operates the -10.

 

[FDJ2]

That 28 ASM's per gallon of fuel for the DC9 you are quoting is for the DC9-10. NW no longer operates the -10.

There was no quote for the 40/50s, you have to look it up in the chart provided. It's titled; "Short hops and old technology are not good for fuel economy".

Once there, you'll see that the NWA DC-9-40/50 only provide marginally better economics at approximately 37 ASMs/gallon, compared to the MD-90 at 60 ASMs/gallon.

 

[Superpilot92]

I was just looking at the analysis that was provided. I don't suspect that the DC-9-30 is muuch more efficient that the DC-9-10 and probably certainly not as fuel efficient as a 88/90.

you posted bad info and now are back stepping. Why not just admit you made an mistake? The -10 is much smaller than the 30,40,50=difference in seats.

 

[FDJ2]

you posted bad info and now are back stepping. Why not just admit you made an mistake? The -10 is much smaller than the 30,40,50=difference in seats.

That was just a quote from the study that's illustrates the poor fuel economy of the DC-9. It didn't quote the 30/40/50 series in that paragraph. That was dealt with in figures 12 and 13 on in the link provided and later in my post we discuss the 30's fuel efficiency. That's the part Occam conveniently didn't address and apparently neither do you.

The Direct operating costs/ASM for fuel and oil at 70 cents a gallon:

NWA DC-9-30: 2.29

DAL MD-88: 1.51
DAL MD-90: 1.08

"As Northwest’s unit costs demonstrate, however, it has been able to overcome the fuel-efficiency disadvantage at average costs of 70¢ per gallon, at least for so long as it is competing with other legacy carriers. See Figure 14.

But what happens with higher fuel costs? In Figures 15 through 17 we show cost curves for Northwest’s DC-9-30s, Delta’s MD-80s, and Airtran’s B 717s at various fuel prices ranging from the 70¢ per US gallon we used in our comparisons to a high of $2.00/gallon. As we write, fuel is selling in the $1.10 -$1.20 range.


We set out the underlying data in Figure 18. As fuel prices rise, the cost-disadvantages of Northwest’s fuel-inefficient aircraft increase.


Thus, between 90¢ and $2.00 per gallon, Northwest would experience a unit cost increase at 800 miles from 10.7¢/ASM to 13.5¢/ASM, a nearly 3.00¢ increase in total unit costs but, more importantly, a one cent per ASM increase in its disadvantage versus Airtran’s B 717. In contrast, with its more fuel efficient MD-80s Delta would see its cost disadvantage versus Airtran increase by one half cent per ASM."​

You can also look up the individual series in Figure 13. When you do, you'll see that the economics doesn't get much better. The later series 9s get about 37 ASMs/gallon compared to 60 on the MD-90s.

I don't have the technical ability to post the graph, but if you do go ahead. The title is:

Short hops and old technology are not good for fuel economy, it's figure 13

http://www.unisys.com/eprise/main/admin/micro/doc/Feb_Mar.pdf

 

[FDJ2]

Looks like we should park all our DC-9-10's then, eh?

Yeah, but the fuel economy of the 30,40,50 series isn't that great either.

Just as a comparison, in Figure 12 you can see that the direct operating cost attributable to fuel and oil at 70 cents a gallon is:

DC-9-30: 2.29 cents
DC-9-40: 2.30 cents
DC-9-50: 2.27 cents

MD-88: 1.51 cents
MD-90: 1.08 cents

and that's at 70 cents a gallon. At closer to $3/gallon, the difference gets bigger.

Looking at figure 13, your 30/40/50s come in at about 37 ASM's/gallon. The MD-90 comes in at 60 ASMs/gallon and the 88 at about 44 ASMs/gallon, which make the 90 and 88 approximately 62% and 19% more fuel efficient/ASM respectively.

Here's the link.

http://www.unisys.com/eprise/main/admin/micro/doc/Feb_Mar.pdf

 

[Occam's Razor]

That's the part Occam conveniently didn't address and apparently neither do you.

I clicked "Quote".

I repeated what you posted. I'm not sure why you chose to quote CASM data for an aircraft we haven't operated for 6-years. It appears to be the data that most strongly supports your point.

See how it happens?

Two sides with differing perspectives often do things like that to strengthen their position in the negotiations. Just because you've done that here doesn't make you evil, or a weasel. It means you tend to judge yourself based on your intentions, and not your actions.

That's cool!

As long as you recognize it, and don't try to vilify the other side when they do the same.

 

[FDJ2]

I clicked "Quote".

I repeated what you posted. I'm not sure why you chose to quote CASM data for an aircraft we haven't operated for 6-years. It appears to be the data that most strongly supports your point.

I didn't just post info on the 10 series, I also posted info on the 30. You don't want to talk about that. That's o.k., I understand why.

See how it happens?

Sure, you selected a portion of my post and then tried to charactize the entire post as not relevant because the portion you quoted dealt with the 10 series and the portion you ignored dealt with the 30.

Two sides with differing perspectives often do things like that to strengthen their position in the negotiations. Just because you've done that here doesn't make you evil, or a weasel. It means you tend to judge yourself based on your intentions, and not your actions.

Sure, and just because you selectively quoted a part of my post that dealt with the DC-9-10 series and tried to characterize that as the entire thrust of my post, while you ignored the part that dealt with the 30 series doesn't mean you're a weasel or evil either. You're just trying to strengthen your position by not wanting to deal with the relatively poor fuel economics of the Dc-9 series.


As long as you recognize it, and don't try to vilify the other side when they do the same.

That's cool. Now that we have that out of the way, can we discuss the information on the 30/40/50 series and 88/90s?

Direct fuel and oil operating cost per seat mile at 70 cents/gallon:

DC-9-30: 2.29 cents
DC-9-40: 2.30 cents
DC-9-50: 2.27 cents

MD-88: 1.51 cents
MD-90: 1.08 cents

With oil at $130/bbl and jet fuel closer to $3/gallon than 70 cents/gallon, how do you think that effects the direct operating cost of the DC-9 vs the 88/90? Which aircraft will be more disproportionately effected by rising fuel costs?

Now just focussing on ASMs/gallon

By looking at the figures provided, The DC-9 series 30/40/50 seem to provide about 37 ASMs/gallon, the MD-88 about 44 and the MD-90 about 60.

This data appears to indicate that the DC-9 burns more gas per available seat mile and would suggest that it is a less fuel efficient aircraft.