Leave Airtran for United??

[Andy]

Nobody is matching our costs. The legacies aren't even close. Even SWA has creeped above us now on their costs. We have the lowest non-fuel CASM in the industry, and match SWA on CASM including fuel. The legacies are still far away from matching our costs. We'll weather a recession just fine.

And what's your RASM?

Let's compare CY2007 numbers.
AAI CASM 9.57 cents
AAI RASM 10.18 cents
AAI RASM - CASM .61 cents
UAUA mainline CASM 11.39 cents
UAUA mainline RASM 12.03 cents
UAUA RASM - CASM .64 cents

I haven't pulled up RASM/CASM comparisons for the rest of the legacies, but CASM doesn't mean squat unless you also compare RASM.

As for your claim that no one's lower, check JBLU's 2007 numbers
JBLU CASM 8.38 cents
JBLU RASM 8.91 cents
JBLU RASM - CASM .53 cents

JBLU also has longer stage lengths than AAI which is why their RASM and CASM are lower.

 

[Lear70]

That's the whole point he's making, Andy.

When mainline starts pulling down flights to save money (which you've already said you believed they'd do), those RASM numbers will take a big hit. AAI has a history of GROWING during a downturn, not shrinking, thereby leaving our RASM intact.

The people who survive without heavy damage during hard times are those who have low costs and continue to price their product accordingly, thereby retaining their revenue stream.

No one's saying UA will go out of business, but it's definitely easier to survive and not pull down as much flying when your CASM is one of the lowest, if not *the* lowest in the business.

p.s. The JBLU numbers are total CASM. I believe PCL said AAI had the lowest non-fuel CASM, which is a true statement.

 

[Yuppyguppy]

That's the whole point he's making, Andy.

When mainline starts pulling down flights to save money (which you've already said you believed they'd do), those RASM numbers will take a big hit. AAI has a history of GROWING during a downturn, not shrinking, thereby leaving our RASM intact.

The people who survive without heavy damage during hard times are those who have low costs and continue to price their product accordingly, thereby retaining their revenue stream.

No one's saying UA will go out of business, but it's definitely easier to survive and not pull down as much flying when your CASM is one of the lowest, if not *the* lowest in the business.

p.s. The JBLU numbers are total CASM. I believe PCL said AAI had the lowest non-fuel CASM, which is a true statement.

You just sold 2 airplanes who's pulling who down...what a ********************ing joke!

 

[Andy]

When mainline starts pulling down flights to save money (which you've already said you believed they'd do), those RASM numbers will take a big hit. AAI has a history of GROWING during a downturn, not shrinking, thereby leaving our RASM intact.

Really? Do you have any data to prove this theory? I suspect that your RASM has not survived intact in previous downturns.

And do you not think that AAI selling two of their jets indicates that they might pull down flights?

I think that AAI's customer base is going to feel the downturn more than UAUA's (or any other legacy carrier) customer base. Why? AAI's customer base has more discretionary travelers and serves a lot of secondary airports. Legacies are much more dependent on business travelers; while businesses will curtail travel, it won't be to the extent that you're going to see individuals curtail travel.
AAI is heavily dependent on travel to/from the Magic Kingdom; MCO represents 15% of AAI's operations. With consumers tapped out, those vacations are going to be one of the first things scratched from the family wish list.
AAI is also subsidized by some of the cities that it serves. Municipalities are finding their revenues shrink. Don't be surprised if several cities stop subsidizing AAI for air service.

AAI is not bulletproof.

p.s. The JBLU numbers are total CASM. I believe PCL said AAI had the lowest non-fuel CASM, which is a true statement.

CY2007
AAI CASM Ex-fuel 6.03 cents
JBLU CASM Ex-fuel 5.47 cents

As per the 10Ks.

 

[RIDETHELIGHTING]

You just sold 2 airplanes who's pulling who down...what a ********************ing joke!

Hey the tool speaks again. I thought you didn't care about FL? So stop reading it DumbA$$$$$$$.

 

[jetblue190]

This from someone who works at JetBlue? WOW! For the record, I am at UA now as well.

There were a lot of ATA Guys who went to Airtran and there are few left. VERY DIFFERENT corporate culture....at least from the old ATA. It's a real shame they could never figure out how to make money. It was a really great place to work.

Airtran is not for everyone. And it was truly not for me.

RV

No...this from someone who USE to work at United and knows better...good luck my friend...You'll figure it out over time....

 

[maxblast72]

And do you not think that AAI selling two of their jets indicates that they might pull down flights?

We are just selling 2 airplanes that have not even been flown by Airtran yet (for a profit). Not really pulling down flights just not adding flights as fast as we would have if we would have received the two jets this year.

We made a profit of 7.2 million after taxes I believe for the two airplanes we sold in 2007.

 

[Lear70]

We are just selling 2 airplanes that have not even been flown by Airtran yet (for a profit). Not really pulling down flights just not adding flights as fast as we would have if we would have received the two jets this year.

Beat me to it...

Andy, sometimes I think you deliberately miss the point intentionally.

Selling two aircraft that were not yet on property and, therefore, were not flying for airTran, is NOT "pulling down flying". It doesn't reduce any current routes or frequency.

Incidentally, I think you'd be surprised at the mix of business traveler that fly on any given airline these days. UA in all likelihood has a very small percentage of business travelers more than AAI. With the reduction in fares at EVERY airline, the majority of business comes from low-fare leisure travel. The "true" business traveler has gone to fractional ownership.

Guppy, I never said that anyone was pulling down anyone else. We were referring to pulling down OUR OWN flying, each airline independently pulling their own low-yield routes to reduce CASM during an economic downturn.

Ease off the caffeine, have a nice glass of wine, and relax a bit...

 

[Andy]

Beat me to it...

Andy, sometimes I think you deliberately miss the point intentionally.

Selling two aircraft that were not yet on property and, therefore, were not flying for airTran, is NOT "pulling down flying". It doesn't reduce any current routes or frequency.

Incidentally, I think you'd be surprised at the mix of business traveler that fly on any given airline these days. UA in all likelihood has a very small percentage of business travelers more than AAI. With the reduction in fares at EVERY airline, the majority of business comes from low-fare leisure travel. The "true" business traveler has gone to fractional ownership.

Guppy, I never said that anyone was pulling down anyone else. We were referring to pulling down OUR OWN flying, each airline independently pulling their own low-yield routes to reduce CASM during an economic downturn.

Ease off the caffeine, have a nice glass of wine, and relax a bit...

Lear, what makes you say that the two aircraft haven't been delivered yet? I haven't seen that in any press releases. Nor does it mention that they're being sold for a profit. Source?

With 15% of AAI's schedule flying out of MCO, I would find it very hard to believe that AAI has roughly the same percentage of business traveler as the legacies. I don't know what the 'true' business traveler is, but having logged 124K miles as a business traveler in 2007, I can tell you that most of the road warriors that I chatted with place a great deal of value on frequency, route structure and upgrades. They tend to choose legacy carriers that have hubs in their origin city or are most convenient. Plenty of them log 200K+ per year; that's not practical for frac flying and their positions within their companies don't rate white glove treatment. You're talking about individuals who are a very small portion of the flying public.
If you want to read comments from frequent flyers, go to www.flyertalk.com. There are a lot less AAI threads than for other carriers.

When airlines eliminate low yield routes, it's to maintain RASM, not reduce CASM.

I don't know how AAI will fare during this downturn, just as I don't know how UAUA will fare. I think that management of the two airlines are making the correct moves by slowing expansion at AAI and not expanding at UAUA. I was ticked off at UAUA managment for doing the special dividend in Jan; I wanted to see them maintain a large cash buffer.

 

[BigMeat]

UMm you just sold 2 more planes today...4 year upgrade??? what are you smoking?

I dont work for Airtran. I work for CAL. I have friends and family that work there. What we are comparing is Airtran and United. If anyone is more recession proof, just like after 9/11, it will be Airtran. Besides I believe that United has a 5 billion dollar note due in 2012. If we really are in a deep recession then it would be a bad time for it. United has no aircraft on order and if they were going to reduce their fleet they would just replace them with Republics "RJs". Let someone like Republic take the risk at the right price. United sold of its LAX mx base. They would love nothing more than to merge with CAL who just ordered another 19 737s and 8 777's not including the 25 787 coming the next few years.