Leave Airtran for United??

[shuttlepilot]

I just talked with a 767 guy from united in IAD, we were both trying to get ot ATL. He had just recently upgraded, still could not hold a line on the 76. Been at UA for 17 years!!

 

[BigMeat]

United = Forever upgrade (longer working for retirement), no airplane orders, no real scope protection.

Airtran= 4year upgrade, scope, recession coming (safer bet), 60 airplanes on order

Culture at Airtran is younger and more fun. United is old and disgruntled.

Andy,

Do you really think that because of a bad economy there will be less airplanes? Maybe less mainline airplanes for United. You sold out your scope relief.

 

[Andy]

Andy,

Do you really think that because of a bad economy there will be less airplanes?

Absolutely. Airlines are either going to park a lot of airplanes or they will die. Airlines will be operating at a loss for the next several years and it won't be easy for them to get lines of credit, unlike post 911.

You fail to understand how deep this recession will be. (Warren Buffett called it a recession this morning http://biz.yahoo.com/ap/080303/buffett_economy.html )

The worldwide tightening of credit is going to make this recession much deeper than previous ones. The banking system itself is under considerable strain. I'll assume that you did not watch Bernanke's testimony last week where he stated to Congress that there will be bank failures. For him to make such a statement means that there are severe problems in the banking system. (You know who Bernanke is, right?)
Citibank, Washington Mutual, Bank of America, Wells Fargo, and several other big players are in serious trouble. The amount of assets that they've shifted over to level 3 (mark to model; otherwise know as mark to fantasy) is growing daily. For all practical purposes, Citibank is insolvent. They will likely not fail outright due to their size, but they will need to be recapitalized. Again.

In light of all this, you expect air travel to remain constant or grow? You really need to learn the economics of this industry. Air travel is a discretionary expense; it's not a necessity. http://www.aviationweek.com/aw/generic/story_channel.jsp?channel=comm&id=news/SLOW02278.xml

In Airtran's case, they may have a saving grace. They have the good fortune of competing against Delta, which seems to have gone on a spending spree just when the economy's starting to turn south.

 

[maxblast72]

Airtran had tons of attrition back in 2000 and 2001. Obviously back then, no one would have guessed that leaving Airtran would have cost them so much money. Here we are 8 years later, and the same attrition numbers are happening again as the legacies are in full hiring mode.

Not that Airtran is the best or worst company to work for in 2008, but the last place I want to be with a slowing economy and $100/barrel oil is the bottom 10% of any legacies' seniority list. Airtran handled the last airline downturn in 2002 and 2003 pretty well, and I imagine they will do alright through this downturn as well.

 

[Yuppyguppy]

United = Forever upgrade (longer working for retirement), no airplane orders, no real scope protection.

Airtran= 4year upgrade, scope, recession coming (safer bet), 60 airplanes on order

Culture at Airtran is younger and more fun. United is old and disgruntled.

Andy,

Do you really think that because of a bad economy there will be less airplanes? Maybe less mainline airplanes for United. You sold out your scope relief.

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

 

[Andy]

Airtran handled the last airline downturn in 2002 and 2003 pretty well, and I imagine they will do alright through this downturn as well.

Airtran had a much greater cost advantage over the legacies back then. Legacies have reduced costs to match Airtran and Jetblue, so it won't be quite as easy for them.
Airtran has little debt, so they're not in bad shape to weather the downturn as long as they don't take delivery of a bunch of new aircraft.

 

[XShuttle]

I just talked with a 767 guy from united in IAD, we were both trying to get ot ATL. He had just recently upgraded, still could not hold a line on the 76. Been at UA for 17 years!!

Just to clarify he was a Captain not an F/O

 

[Andy]

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

I would consider that to be a smart move on Airtran's part. Increasing fleet size right now is foolish.

I don't see this downturn as being one where some airlines are winners and others are losers. Every airline is going to have to curtail service. The mark of a 'good' carrier will not be upgrades, but lack of downgrades.

 

[contrail67]

I just talked with a 767 guy from united in IAD, we were both trying to get ot ATL. He had just recently upgraded, still could not hold a line on the 76. Been at UA for 17 years!!

I bet he could have held 737 or 320 Captain somewhere else before 767 Captain....don't get hung up on the 17 year thing...some of that is his choice and QOL.

 

[pilotgolfer]

I bet he could have held 737 or 320 Captain somewhere else before 767 Captain....don't get hung up on the 17 year thing...some of that is his choice and QOL.

The junior Captain on the 737 was hired in 1998 (give or take) and he's held that position for the last 3 years. Thats more like a 7 year upgrade. All the upgrade numbers at United are going to be schewed (how do you spell that...I'm sure Andy will chime in) by the 6 year break in hiring.

 

[contrail67]

I think Andy is still out on Mil leave...last I knew so you are right....the whole furlough thing mixed things up alot.

Good news is that they are still hiring 250 by June and then pick it up again in the fall.

 

[maxblast72]

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

It depends on the year you were hired. For the latest bid that just closed two weeks ago, the most junior Captain was a December of 2004 hire and will go to class in April making him about 3 1/2 years longevity entering class.

I would guess most 2005 Airtran newhires are looking at around 3.5-4 year upgrades, with 2006 Airtran newhires looking at about 5 year upgrades based on a delivery schedule of about 8-10 aircraft per year for the next few years. 8-10 Aircraft deliveries per year only make about 50-60 new Captains every years so the upgrades times will definitely be increasing.

 

[Andy]

I think Andy is still out on Mil leave...last I knew so you are right....the whole furlough thing mixed things up alot.

Good news is that they are still hiring 250 by June and then pick it up again in the fall.

I'm out on mil lv until 1 April. Returning as a 767 FO.

I had a few reasons to return; 1) my wife's going back to active duty and will be stationed in SAT; my reserve job is in the DC area. 2) I wanted to return and get the B/C contributions in case I get furloughed again. 3) I am approaching my 1095 day limit for reserve duty and need to take ~10 months off from the reserves.

When I spoke to the TK scheduler, he said that the plan (as of 2 wks ago) remained to have newhire classes til June (1 class in June). However, he said that they're looking at cancelling the last two classes.
With the age 60 change (only 2 retirements in Jan according to the SSC), I would think that UAL will be properly staffed with the hiring til June.
A lot of the returning furloughees went on mil lv or LOA. There has been a steady return of mil lv and LOAs. In Jan, there was a net return of 20 pilots from mil lv - appears that 1 resigned. There was a net return of 5 LOAs - it appears that 8 pilots returning from LOA resigned. There were still 644 mil lv and 187 LOAs that haven't returned as of end of Jan. The LOAs should be pretty much done returning in the next 12 months, so I wouldn't be expecting any more hiring to take place after this summer, especially with the lack of retirements.

 

[Lear70]

It depends on the year you were hired. For the latest bid that just closed two weeks ago, the most junior Captain was a December of 2004 hire and will go to class in April making him about 3 1/2 years longevity entering class.

I would guess most 2005 Airtran newhires are looking at around 3.5-4 year upgrades, with 2006 Airtran newhires looking at about 5 year upgrades based on a delivery schedule of about 8-10 aircraft per year for the next few years. 8-10 Aircraft deliveries per year only make about 50-60 new Captains every years so the upgrades times will definitely be increasing.

That would be about right... if... they would stop selling aircraft.

As we enter this recession (didn't we just have one?), look for more deferrals/sales of aircraft to happen and a general tightening of the belt for about 2 years.

I'm thinking that will delay upgrades by that same amount of time, with the late '05 and later new-hires suffering the brunt of those delays in upgrade and kicking it upwards of 6+ years.

I also believe the company will use this to their advantage in negotiations, drag out a contract settlement, and prolong it well into the end of the year before they even get close.

What will help then is a new face in Washington (assuming it's not McCain or Billary), who might actually put some labor-friendly people at the NMB and allow us to exercise some self-help options.

If that doesn't happen, and the recession hits as hard as I think it will, we'll all be waiting for a new contract well into 2009...

Still think it's better than what we were offered last summer.

 

[pilotgolfer]

I'm out on mil lv until 1 April. Returning as a 767 FO.

I had a few reasons to return; 1) my wife's going back to active duty and will be stationed in SAT; my reserve job is in the DC area. 2) I wanted to return and get the B/C contributions in case I get furloughed again. 3) I am approaching my 1095 day limit for reserve duty and need to take ~10 months off from the reserves.

When I spoke to the TK scheduler, he said that the plan (as of 2 wks ago) remained to have newhire classes til June (1 class in June). However, he said that they're looking at cancelling the last two classes.
With the age 60 change (only 2 retirements in Jan according to the SSC), I would think that UAL will be properly staffed with the hiring til June.
A lot of the returning furloughees went on mil lv or LOA. There has been a steady return of mil lv and LOAs. In Jan, there was a net return of 20 pilots from mil lv - appears that 1 resigned. There was a net return of 5 LOAs - it appears that 8 pilots returning from LOA resigned. There were still 644 mil lv and 187 LOAs that haven't returned as of end of Jan. The LOAs should be pretty much done returning in the next 12 months, so I wouldn't be expecting any more hiring to take place after this summer, especially with the lack of retirements.

Actually, I thought you would chime in and correct my spelling.

 

[Andy]

Actually, I thought you would chime in and correct my spelling.

LOL! I didn't realize that I was a spelling nazi on this forum. But FWIW, you were looking for 'skewed.'

 

[pilotgolfer]

LOL! I didn't realize that I was a spelling nazi on this forum. But FWIW, you were looking for 'skewed.'

Thanks...I feel better now. I tried it with a "k" and it just didn't look right. Enjoy the 767 course...its a pretty quick and dirty course. Did you get DCA?

 

[Andy]

Enjoy the 767 course...its a pretty quick and dirty course. Did you get DCA?

Well, that's depressing. I haven't turned a wheel since 2002 so my PI will probably be bald from ripping his hair out by the time I'm done with the course.

I got DCA; should be an interesting commute from SAT. I'm strongly considering lateraling to ORD. I'll wait and see how loads are on the two daily direct SAT-IAD. Other than that, I'll have to get creative - as in multi city commute.
I can do some reserve work while sitting reserve in DCA, but geez, that commute looks nasty.

 

[pilotgolfer]

Well, that's depressing. I haven't turned a wheel since 2002 so my PI will probably be bald from ripping his hair out by the time I'm done with the course.

I got DCA; should be an interesting commute from SAT. I'm strongly considering lateraling to ORD. I'll wait and see how loads are on the two daily direct SAT-IAD. Other than that, I'll have to get creative - as in multi city commute.
I can do some reserve work while sitting reserve in DCA, but geez, that commute looks nasty.

Feel free to go to ORD...coming from a person with a bid in for DCA 767 !!

Welcome back

 

[PCL_128]

Airtran had a much greater cost advantage over the legacies back then. Legacies have reduced costs to match Airtran

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.

 

[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.