AirTran upgraded

[CitationLover]

It's all about balance, too much growth and you lose too little and you lose.

how true. another reason revenue and yield management play an important part in the grand scheme of things. pricing algorithms have a lot to detail. an airline that successfully manages this well, can easily maintain rapid growth, while others who don't can't sustain it. it has come a long way from crandall's super saver program.

 

[j41driver]

What are the rumblings regarding TA#3? Has the new leadership talked to mgmt yet?

Sorry...thought you worked here. No new talks yet...just basically getting BOD and Committees up to speed.

 

[CitationLover]

Sorry...thought you worked here.

almost, in august of last year.

 

[Secret Squirrel]

Do you really believe that if AAI stopped taking deliveries tomorrow our costs would all of a sudden become unprofitable?

 

[CitationLover]

Do you really believe that if AAI stopped taking deliveries tomorrow our costs would all of a sudden become unprofitable?

Yes .

 

[Kharma Police]

Yes .

Looks like the FI Warren Buffet is taking his gloves off!!

 

[CitationLover]

Looks like the FI Warren Buffet is taking his gloves off!!

ok mary k blige.

 

[Kharma Police]

ok mary k blige.

Don't hurt me now! Remember, we don't have any water in 'da ATL!

 

[CitationLover]

Don't hurt me now! Remember, we don't have any water in 'da ATL!

pick up those open trips so you can take a shower.

 

[PCL_128]

Yes .

That's a little bit over the top. I agree that our profits would begin to shrink year over year, but they would not cease to exist. Our profit for last year is probably going to end up at about $60 million, so it would take years for increasing costs to chip away at that without any growth. I do agree with your overall premise that growth keeps costs down, however. That's not a radical idea at all in this industry.

 

[PCL_128]

Our union president said that if we got everything we were asking for it would increase our CASM by less than 5 cents. That is not going loose us our industry leading costs.

I think you got your figures wrong. A change of CASM by 5 cents would just about double our costs. Our current CASM, including fuel, is about 10 cents per ASM. I would estimate that us getting every single demand that we're making would increase total CASM by less than half a cent.

 

[TV9Driver]

loss of growth is a long term cost issue, not short term. If we stopped taking airplanes right now, our costs would not dramatically increase overnight (ie salaries, insurance, etc) it would be a year over year cumulative cost effect.

So, I believe, in the short term it does not hurt us to slow growth in an attempt to increase yield, load factor, or whatever. Of course it isn't helping my upgrade any...

 

[CitationLover]

loss of growth is a long term cost issue, not short term. If we stopped taking airplanes right now, our costs would not dramatically increase overnight (ie salaries, insurance, etc) it would be a year over year cumulative cost effect.

So, I believe, in the short term it does not hurt us to slow growth in an attempt to increase yield, load factor, or whatever. Of course it isn't helping my upgrade any...

i would agree with you in an established business, but not one that is as fairly young as air tran. with no new 737's the denominator (being driven by average stage length increases) will not grow and perhaps would shrink if fleet is moved around (to a caribbean focus, etc.). this could increase unit costs faster than what you are thinking.

 

[maxblast72]

Well, the good news is we still have 65 brand new B737's being built by Boeing for us over the next 4-5 years. And if the economy isn't do well enough to bring them to ATL, our management is getting calls from airlines all over Asia and Africa to buy our airplanes for about $5 million more than we paid for them (basically an extra $300 million in equity already accrued).

Either way, I think we will be OK. Time will tell. I got $5 we squeak out a small profit tomorrow.

 

[PCL_128]

I got $5 we squeak out a small profit tomorrow.

That's what I think. $1-3 million probably.