Charlie don't surf... TED don't count

[F9 Driver]

From last week's RMN. Sounds rather Enron-esque IMHO.

http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_3202920,00.html

July DIA record

Inexpensive ticket prices produce boost in passenger traffic

By David Kesmodel, Rocky Mountain News
September 23, 2004 Passenger traffic at Denver International Airport surged to a record in July as rock-bottom ticket prices spurred more people to fly.

DIA, the fifth-busiest U.S. airport, said traffic rose 13 percent to 4.23 million passengers from 3.75 million a year earlier.

http://www.rockymountainnews.com/drmn/images/spacers/spacer.gif[font=arial, helvetica, sans-serif]Advertisement[/font]GetAd('31', false, 'c1', 250, 250, 'BUSINESS_ARTICLE_DETAIL', ''); http://www.rockymountainnews.com/drmn/images/spacers/spacer.gifhttp://www.rockymountainnews.com/drmn/images/spacers/spacer.gifThe airport also revised downward its traffic data for the first six months of the year by 1.03 million, saying United Airlines, the airport's dominant carrier, misstated some numbers in reports to DIA officials.

The revisions left DIA's traffic through the first seven months of this year at 24.95 million, up 16 percent from the same period last year. The airport, opened in 1995, remains on track to post the busiest year in Denver aviation history.

"The fares that were out there in almost every market were so incredible for the consumer that it really stimulated traffic," said Joe Hodas, a spokesman for Frontier Airlines. "It looks like some passengers said, 'We can't not take that trip now. It makes too much sense.' "

Last month, DIA reported its June traffic was 4.26 million, a record. The figure would have topped the July mark, but it turned out the number should have been 3.99 million, which ranks No. 2 in Denver history.

DIA's misstated data was due largely to United misreporting traffic for Ted, its discount carrier that took wing in February. DIA revised traffic figures for each month of this year, including a slight upward revision for March.

Chicago-based United said it had reported traffic for Ted and United separately, but it had failed to subtract the Ted data from the United figure.

Airline spokesman Jeff Green said the company caught the error, brought it to DIA's attention and has taken steps to ensure such mistakes don't happen again.

Denver-based Frontier, Delta Air Lines, AirTran Airways and Alaska Airlines were among carriers reporting traffic increases of 15 percent or greater in July.

Frontier's traffic grew 25 percent. In addition to low fares, the increase is due to a 40 percent boost in seat capacity by the carrier across its system, Hodas said.

Systemwide, Frontier, whose average one-way fare has been about $100, carried 32 percent more passengers than it did a year earlier, he said.

One reason July traffic at DIA was so strong may have been that some people chose to fly for certain short- haul trips rather than drive because of high gas prices, he said.

Denver's surge reflects increased demand for air travel across the country, and fares here "are very competitive," United's Green said.

The improving U.S. economy is a factor, too. DIA gets 46 percent of its traffic from people connecting in Denver to other cities.

The low fares, as well as high jet-fuel prices, are battering the airline industry. United is struggling to emerge from bankruptcy. Frontier, while much healthier, is projecting its third straight quarterly loss for the period ending Sept. 30.

A second major U.S. carrier, US Airways, entered bankruptcy this month, its second filing in 25 months.

And the industry is concerned that the seasonal decline in travel that traditionally comes in autumn appears to be worse this year than many carriers expected, Hodas said.

For DIA, traffic should still be sufficient to bring the airport its busiest year, breaking a mark set in 2000. Turner West, the airport's co- manager, spoke proudly of DIA's numbers Wednesday. The double- digit year-over-year increase in traffic "continues to reflect the strength of the Denver market, and it underlines the important role that aviation plays in the local and regional economy," he said in a statement.

United, Ted and United's regional-jet affiliates flew 57.9 percent of DIA's paying domestic passengers in July. Frontier and its Frontier JetExpress regional-jet arm, operated by Seattle's Horizon Air, flew 17.5 percent.

In stark contrast to DIA's passenger demand, the airport's air-cargo activity stayed soft in July.

Cargo handled at the airport totaled 56.9 million pounds, down 10 percent from a year earlier. For the first seven months of this year, cargo totaled 399.3 million pounds, down 1.5 percent.

Airport traffic

24.95 million: Passenger traffic at Denver International Airport through the first seven months of this year, up 16 percent from the same period last year

4.23 million: Traffic at DIA in July, a 13 percent increase over last year

 

[Mugs]

Frontier, while much healthier, is projecting its third straight quarterly loss for the period ending Sept. 30.


I thought maybe you would like that in red also.

 

[Andy]

Frontier's traffic grew 25 percent. In addition to low fares, the increase is due to a 40 percent boost in seat capacity by the carrier across its system, Hodas said.

Mugs, you missed another one to put in red.


I guess that's why they're trimming their flight schedule by 13 percent. (http://biz.yahoo.com/ap/040909/frontier_airlines_2.html)

 

[F9 Driver]

Mugs & Andy,
Sorry if I hit a nerve. I was amazed that such a mistake would happen in the post Enron world and slip by so quietly.

This whole article would be in red if you want to sit around and point out weaknesses.

http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_3205956,00.html

UAL said the weak U.S. revenue, intense competition and high fuel prices will require additional cost cuts. Last month, the company said it's likely to terminate employee pension plans to help stem losses. The Chicago-based airline's August operating loss, which excludes taxes, was $12 million.

"It's not a good sign when you come into a typically cash-flow-positive month and you end up having an operating loss," said Jim Brom-ley, a partner at Cleary Gottlieb in New York.

Oh Andy - we pull back our schedule every "shoulder season" to stay economical. This year a bit more than most due to the current trends. That's the nice thing about being realistic - we can be responsive to trends in a timely fashion. How many of your pension payments were made with market share?

 

[skykid]

F9,good point about the pension. My B plan (401K) looks good, the defined pension looks about as healthy as yours.

 

[Mugs]

F9:

UAL is weak and in serious trouble by any standard. Nobody is denying that.


"The airlines with the positive economic spreads and access to capital can grow as fast as they can
manage the growth. Airlines like Frontier are structuring their aircraft leases in a way that
understates true costs. They do this with large balloon payments at the end of the lease terms.

Strategically, this makes perfect sense because it allows faster growth in the short and intermediate
term, and, it's the fast growth that will force its higher cost competitors to cede market share. The
danger with this type of bold strategy and creative financing is that it could backfire if the higher cost
competitors do not pull back capacity. Too much capacity pushes down yields and lower yields
means less revenue to cover the large balloon payments that will have to be eventually financed. If
Frontier's higher cost competitors retreat, they win. If its competitors restructure costs and do not
retreat or become more competitive, Frontier is in trouble."


But I guess we all have things to be concernced about.

 

[Andy]

Oh Andy - we pull back our schedule every "shoulder season" to stay economical. This year a bit more than most due to the current trends. That's the nice thing about being realistic - we can be responsive to trends in a timely fashion. How many of your pension payments were made with market share?

Check your numbers. I looked at F9's ASMs for Jul-Sep vs Oct-Dec 1998 through 2003, and the data does not indicate schedule reductions, with the exception of 2001. I'll be happy to post links to individual financial reports if you're unable to find them on this link: http://www.frontierairlines.com/news/newsIndex.asp?section=financial. ASMs are as follows:

Q ending 30 Sep 03: 1,721,397
Q ending 31 Dec 03: 1,815,751

Q ending 30 Sep 02: 922,817
Q ending 31 Dec 02: 1,524,638

Q ending 30 Sep 01: 1,200,608
Q ending 31 Dec 01: 1,010,091 (post 9/11 ... anyone surprised?)

Q ending 30 Sep 00: 1,073,703
Q ending 31 Dec 00: 1,071,714

Q ending 30 Sep 99: 900,524
Q ending 31 Dec 99: 900,328

Q ending 30 Sep 98: 609,111
Q ending 31 Dec 98: 632,754

The numbers indicate that there is no 'shoulder season pullback.'

As for my pension, it's lookin' suweet. I'm in the military and have another 7 months before I'm retirement eligible. However, since I've been furloughed from UAL for almost 3 years, I think that I'll stay in and get a higher retirement amount while waiting to be recalled.
As for the UAL pension, I withdrew all that I could from the A fund (you can do that after being furloughed for longer than 90 days). I've still got my B fund which is untouchable by the company.

As for UAL's health, Mugs was spot on when he said that UAL's a sick pup. But don't kid yourself into thinking that F9's in great shape. And it ain't cool to sit there and gloat at others' misfortune.
Based on what appears to be overexpansion by F9, you could be waking up in the middle of the night in a cold sweat faster than you think.

 

[F9 Driver]

"But I guess we all have things to be concernced about."

AHMEN Brother!

Andy, sorry if I gave misleading info regarding our seasonal pull back. It is what I believed. Should have checked my facts before posting.

As far as gloating - get your facts straight. I know the skin is a bit thin right now, but I posted the article and link with highlighted sections because I was suprised at the "mistake" and how it went by without much press.

I didn't mean to "gloat" about anything. I think that article pointed out as much downside news about F9 as it did UAL (as you were so kind as to highlight for me.)

I won't be waking up in a cold sweat anytime soon friend. Me and mine are taken care of. I haven't put all my eggs in the airline world either, but would be highly bummed if I had to get a real job just the same.

Good luck to us all! (we need it)

 

[P3-Adub]

Andy

Please send me a PM about the A fund, did not think we could pull anything out but then again, I did not think there would be that much there to begin with only being there a short while. April 2000 Newhire. Thanks.

 

[D-Bo]

Please send me a PM about the A fund, did not think we could pull anything out but then again, I did not think there would be that much there to begin with only being there a short while. April 2000 Newhire. Thanks.

Get your paperwork in on pulling out your PLSA money ASAP!!!!!! Before it's too late. You probably have more in there than you think. Enough to cry over if you miss out on getting whats yours.

 

[Andy]

P3-Adub, you got mail. For any other UAL furloughee interested in withdrawing their PLSA, I've pasted below what I sent P3-Adub

You'll find this info on alpa.org/UAL MEC/Furlough/PLSA/Furloughees' Eligibility to Take Partial Lump Sum Amount from A-Plan
The link is: http://www.alpa.org/ual/DesktopModules/ViewDocument.aspx?DocumentID=10601, but you can't get there unless you're logged in to alpa.org.

Here's a cut of the important info (you don't really need to go to the alpa site with this info):


Your MEC R&I Committee confirms that, after you have been furloughed for 90 days, you are eligible to request and receive distribution of your Partial Lump Sum Amount (PLSA) under the pilots' A-Plan. Receipt of your PLSA will not affect your recall rights. However, if you receive your PLSA and are recalled, then your future A-Plan benefit at retirement will be reduced unless you repay your PLSA with interest.





...if you wish to begin the process, you may make a written request for a PLSA election package through either of the following two methods:


1. Send an email to [email protected] or

2. Send a letter to United Airlines, WHQTE - Pension Dept., P.O. Box 66100, Chicago, IL, 60666



Your written request should include the following information:

• Note that you are requesting an election package for the PLSA only

• Name
• File Number
• Furlough Date
• Address Pension Department should send package to
• Contact information (phone numbers, email), including time zone and/or best times to reach you
• Note if you are furloughed from military leave

All such requests will be pended by the Pension Department until the procedures and summary are finalized, at which time the election form and other documentation will be sent to the furloughed pilots who have requested them. After carefully reviewing these materials, if you wish to receive your PLSA, then you must complete and file the election form. You should receive your PLSA within 6 weeks after you file the form.




I got my PLSA deposited to my Russell (B fund) account. It took less than a month from requesting the forms to transfer complete. I was a Jun 2000 hire, so my PLSA only totaled ~$2700 (.75 year of eligibility).






F9, perhaps it was this line from you that sounded like gloating: "How many of your pension payments were made with market share?" Perhaps it was your strategic use of the color red. Or perhaps it was the thread's title. Take your pick.

 

[F9 Driver]

Andy,

Sorry.

It original intent wasn't to ruffle feathers as I stated.

The line about the pension payments was in responce to your nasty responce to my original post - which I assure you wasn't a dig at the pilot corps of UAL.

 

[Andy]

Andy,

Sorry.

It original intent wasn't to ruffle feathers as I stated.

The line about the pension payments was in responce to your nasty responce to my original post - which I assure you wasn't a dig at the pilot corps of UAL.

F9 Driver, I assure you that my feathers weren't at all ruffled. As a (now furloughed) UAL pilot, I've gotten used to taking shots from fellow aviators on a multitude of subjects. One of the problems with being the 800 pound gorilla is that everyone wants to find a chink in the armor and then drive their sword into that spot looking for a killshot. Even now that UAL is on the ropes, many cannot resist ANYTHING that may paint UAL in a bad light. I'm used to it, but I'm also proud to be associated with UAL and the MANY fine people there and so I'll defend her name to the end.

Funny how you considered my response to your original post nasty. You may want to have a person with an unbiased opinion read my post (Preferably someone outside of aviation). I didn't think that my response was 'nasty,' but then again, I'm a to-the-point kind of person.
Just a simple question ... given that UAL's pensions are a festering wound with UAL employees, how should the many UAL employees reading this board take your pension payment comment? I don't expect the pensions to survive and have planned accordingly, but that issue keeps many UAL employees and retirees awake at night.