Delta's Grinstein May Change USE of Small Regional Jets - Bloomberg Article...

[Clyde]

Wrong way!!!! If Delta really thinks larger aircraft and fewer hubs is the answer, the Delta name will not last the decade. After all of the bankruptcy warnings in the last three weeks, nothing has convinced me of Chapter 11 more than this article. Name one airline that has returned to profitability by purchasing larger aircraft. Can't think of one? Hmm...

FedEx

 

[bvt1151]

Clyde,

True, however boxes have entirely different economics than passengers. Kinda like how they're all still flying DC-8's, DC-10's and 727's while those aircraft are unprofitable for the passenger airliners.

Barriers to entry in the parcel business are significantly higher, which greatly reduces competition and allows higher pricing power to support the mega-hubs. I haven't done much research with the cargo side of the industry, but it seems to emulate the airline industry a few decades ago, just more pronounced. You've only got four real competitors (FedEx, UPS, DHL/ABEX, and USPS) which reminds me of the days when the airlines had only four real competitors (United, American, Eastern, Delta). In the mega-hubs, like SDF, MEM, CVG, and ILM, you've got DC-9's, 727's, DC-10's, 747's, A-300's being fed by a mini-fleet of metros, brasilias, caravans, etc. Sound familiar?

Also the amount of time a package spends en-route is insignificant to the customer. From 5:00pm, when the office closes, to 9:00am, when the office opens, the businessman who sent the package could care less what the package when through as long as his package arrives at his destination when it was promised and not damaged. The package could connect 5 times in that time period, which could include 3 semi-trailer rides, and the customer would not even notice as long as his package arrived the next morning. An airline passenger would never put up with the same

 

[balls deep340]

General Lee if you are a representation of the brain power at your company - god help your company. Do me a favor take a BUS 101 class and while your at it pull your head out of your rear.


Thanks