Majors OWNING 50 Seat RJs in LCC Environ

[General Lee]

Medflyer,

You are trying to give good examples, but you aren't succeeding. Song has done better than Delta Express, and if we still had those gas guzzling 737s flying those routes we would have lost even more people to Jetblue and their nice A320s with TVs. We have added routes on Song too that Delta Express could have never flown--like MCO to SJU, and LAS to BOS and JFK. That would have been fun a 737-200, eh? The LCCs have expanded outward---and the only way we can compete with them on some of our mainline routes is to deploy Song. Song is also adding routes where the demand fits---JFK to RSW, and adding more flights out of BDL--an extra to FLL, and and extra to PBI. The flights out of EWR competed with our code share partner CO, and IAD has TED and Indy. No surprises there. I doubt CO will start new service from JFK or BDL to FLA, and neither will TED or Indy.

AA and UA don't have RJ fleets like DL? What? Look what both are doing at ORD. They will have to cancel mainly RJ flights this summer due to the log jam. Why don't they just cancel mainline flights? The RJs can't bring in enough revenue--and when they have to choose between cancelling an RJ or Mainline plane---guess which one will be cut? The RJ cannot bring in enough revenue in a low cost environment---and AA and UAL have to compete on quite a few routes with Southwest and ATA at MDW. Routes like Chicago to LGA, LAX, SEA, MIA, SAN, PHX, DTW, MSP, CLE, CHM, DFW, MSY, etc....have LCC competition now. (And it will grow)

What is AA doing with it's 50 777s? I'll tell ya---they just started LAX to NRT service (the one we dropped for some reason 5 years ago), and have them flying a lot to LHR and Sao Paulo and Santiago. They fly those where the LCCs are NOT. That is smart, and they will make a lot more money doing it. Face it, after 9-11 AA didn't have great publicity with the trade centers, and they also had just bought TWA and faced even more planes empty due to the scared passengers at the time.

The larger presence of RJs have hurt the Majors even more financially due to the longer hold times in VFR weather, longer taxi times burning fuel, and less revenue brought in but still taking that same landing or takeoff slot that someone bigger could use. Southwest avoids a lot of the larger airports and can still fly in and out faster. (like Manchester, NH and Providence instead of BOS) There are some instances where the RJs really help, but you have to realize that there are some also that really hurt us. They aren't the "cure all" that some would like to believe.

Bye Bye--General Lee

 

[MedFlyer]

The larger presence of RJs have hurt the Majors even more financially due to the longer hold times in VFR weather, longer taxi times burning fuel, and less revenue brought in but still taking that same landing or takeoff slot that someone bigger could use. SOuthwest avoids a lot of the larger airports and can still fly in and out faster. (like Manchester, NH and Providence instead of BOS) There are some instances where the RJs really help, but you have to realize that there are some also that really hurt us. They aren't the "cure all" that some would like to believe.

Bye Bye--General Lee

I've never said that RJ's are a cure all. They won't solve DL's problems. However, you are trying to blame all of mainline's failures on the RJ's and it's simply not true.

Mainline's failure is mainline's own fault. DL mainline has a poor product, out-of-whack costs, insane fare strategy and weak route structure that relies too heavily on funneling everyone through low-volume hubs. These elements combined with a new breed of high-service, low-cost competitors have eaten away at DL's customer and revenue base. This erosion has left DL with a lot of half-empty mainline planes, particulary at DFW and SLC. Instead of fixing the broken mainline product, DL has chosen to simply reduce the bleeding by replacing many mainline routes with RJ's.

If you fix mainline, then the economics would favor mainline growth and not RJ's.

 

[General Lee]

Medflyer,

What? Low volume hubs? Like ATL? That hub is the most profitable in the world, but the problem is with more and more low fares coming--it will lose profits fast. SLC's only main competition is Southwest--and with expanding RJ ops there--Southwest will take more. The downsizing at DFW is unbelievable, especially since the metroplex is growing at a huge rate and everyone there seems to be driving large SUVs and seems to have money. AA and Airtran are expanding and Delta is getting smaller. CVG has no competition--and it would be a great hub to funnel more passengers through since delays can be avoided there more often---but we have RJs from CVG to LGA, DCA, BOS, PHL, etc---and that makes no sense.(I know there may be slot restrictions for mainline jets at some of these airports---but you get the point.....)

Here is the problem now and one that will GROW in the future:

More and More low fare airlines will grow and invade the routes that legacy carriers "owned." With lower fares comes the need for more seat--since 50 seats and low fares will provide little or no profit on those routes WITH competition. The only way to compete directly is to lower costs (pay cuts--yes), and to have larger planes to spread out the costs. (notice Southwest doesn't have RJs---and Airtran will be ditching them too) 50 seat RJs will be relegated to flying Sioux Falls to CVG (announced today to start July 29th) type routes because LCCs won't go to Sioux Falls---but flying RJs to larger cities (CVG to LGA and DCA) will have to go--due to the lower fares offered. It makes sense......(and so do pay cuts) As far as lousy service---that is due to front line employees---stews and gate agents---that are all older and unhappy. What to do? Give them retirement (costs more $$) and bring back the furloughed younger people who don't mind making less (less than a 30 year plus stew---they might only be at 2nd or 3rd year pay when they come back) and can't wait for the fun life of being a mainline stew or gate agent.....Hey, I always give a friendly PA, try to make nice soft landings, and always say goodbye to folks as they get off---thanking them for flying us. I would do more but I have to finish the checklists and do walk arounds....

Bye Bye--General Lee

 

[N2264J]

General Lee: wrong again

Sure, they may be [profitable] now after Delta pays for most of DCI's services--like insurance, reservations, kiosks, gate services at Delta stations, etc.

In 1998, the good ole days before the buyout when we were paying our own bills, Comair's profit margin was between 22% to 24% as compared to the mainline's at 8% to 9%. The net profit per employee at mainline was around $15,000 while the net profit per employee at Comair was $34,000. I'm talking net.

Now that Delta is picking up the tab for us, we must be wildly profitable.

Fact is, we can make money for the company with 35 people in a market where a 737 is a loser. If you guys could scope Comair down to zero flying, I can assure you that Delta still wouldn't send an MD-80 to Hooterville and back. By your flawed logic, the entire industry would be operating 747s and 777s exclusively because the the seat mile costs are lower spread out over more seats. There's a reason Delta doesn't send 767s into Ft Wayne.

It is foolish to think you can control the market place with a labor agreement. Why on earth would a rational employee want to restrict a profitable division of their corporation?

And before you start your rant about how cheap we work, consider this: The Comair contract is now right in line (parity on scale) with American and United (with the exception of an "A" plan) and is above US Airways.

 

[General Lee]

N2246J,

Ok, with your response where am I wrong here? You admit that you cost more than most and have pay close to AA/UA and more than USAir---and you fly RJs. Sounds like you just convinced everyone you need a pay cut to help the whole corporation compete---with your peers.

I am sure that your RJs are more profitable at a moarket that can only carry 35 people at a time. That makes sense. But, now we are seeing more people come back--and analysts are predicting this Summer to be as busy in numbers as the Summer of 2000. Back in 2000 we had L1011s, 727s, and MD11s also. They are all gone now, and we also have lower fares. The same amount of passengers, and less mainline planes to fill. So, if we try to carry the same amount of passnegers--we will have to fill more RJs---which will cause more delays and higher fuel costs due to more aircraft in takeoff lines, holding, etc....Can you see this point yet?
We have 3000 less mainline pilots, and 60 or so less mainline aircraft. We have 1000 more DCI pilots, and 100 or more new RJs--with less seats total. The fares are a lot lower, and we have less total seats but more aircraft (RJs) that don't bring in as much revenue but do casue more delays due to the number of T.O.'s and landings..... Also, many many businessmen have told me personally that their travel managers at their companies have a standing order NOT to put them on an RJs due to comfort. But, they are better than props. But for flights over 2+ hours they are bad--and more and more are doing that......That is not your fault though.

Bye Bye--General Lee

 

[N2264J]

I am sure that your RJs are more profitable at a moarket that can only carry 35 people at a time. That makes sense. But, now we are seeing more people come back--and analysts are predicting this Summer to be as busy in numbers as the Summer of 2000.

When the market place dictates, Delta will put a larger plane on it and redeploy our airliners to develop a market somewhere else or steal passengers from someone else's hub or complement the schedule in between the "mainliners" or do the thin point-to-point routes. Delta's been using us for that for years.

The CL series can accomplish a variety of missions very well.
I agree that it is not well suited for "low cost" environment because of the seat/mile cost issue but we can maintain a presence for Delta in the weaker markets and show the flag.

Comair is not the competition. United, American, Southwest, Northwest, jetBlue, AirTran - they're the competition.

Sounds like you just convinced everyone you need a pay cut to help the whole corporation compete---with your peers.

Like I say, Comair is making money and not the problem and, by the way, our "peers" at Comair are pilots from United, American, Northwest, Delta, Southwest, jetBlue and AirTran as well as ASA, ACA, etc. You see, the earth has shifted beneath our feet. Everything has changed except the way we think about it. There is no more "mainline flying" or "regional flying." There is only airline flying. "Feeder" is a term about feeding the hub whether it be in a CL-65 or a 767. The concept of "feeder" depends entirely on the heading indicator of your magnetic compass and not what kind of airplane you're driving or what "company" you work for.

 

[XRMEFLYER]

The downsizing at DFW is unbelievable, especially since the metroplex is growing at a huge rate and everyone there seems to be driving large SUVs and seems to have money

Now that is some razor sharp insight. How is it that the marketing department didn't realize your ability to just cut right to the heart of the matter and make you the department VP?
Forget about all of that research stuff, it's all about the number of SUVs and how much money the locals have rather than the finer points like their willingness to part with their money.

Stick to yanking the gear and monitoring the cabin temperature there hondo! You are way out of your depth and the pathetic thing is you really believe some of this BS you're spouting.

 

[Freebrd]

GL: We have to hold more in ATL due to traffic delays---costing $$$$ in fuel, and waiting for T.O. in those long congo lines

Think we had this argument a few years ago when the RJs invaded LGC. I'm in and out of ATL 3-4 times a day, and I usually taxi out and get airborne in 10-15 minutes max, and usually arrive into ATL early, even with some turns and speed reductions, very rarely holding.

You're blowing smoke again GL, along with Six, and I guess the audience you're attempting to convince that the RJs are bad (taking those mainline jobs afterall) must be the management weenies who read this board. Not gonna work my friend.

Ya'll (GL,Six,etc) must get together and come up with this crap, like anyone would fall for it anyway. Oooh, the bad bad RJs! taking mainline jobs and clogging the system! Oooooh!

 

[General Lee]

Xream-me (Sarge),

Talk about a genius! The DFW area is growing at a very fast rate, and we are leaving it to RJs! That is the point Sarge, and you can't see that. Time to read up on your facts or just ship out back to Iraq. IF you can't see that marketing is screwing up with a 70 seat RJ to JFK each day (two huge cities with millions of people and only a 70 seat RJ each day)----then you can't see the forest through the trees. At ease soldier. Everyone else can see that Delta has just given up on that hub, and the city is still growing and the economy is getting better. RJs are invading, and business passengers are leaving----leaving the 70 seat RJ nonstops to get on more comfortable planes(to DEN, PHX, OAK, SNA, ONT, SLC, DCA, JFK, MSP, MSY----and even Southwest just added a second daily 737-300 from STL to SLC because they know that the CR7s aren't very comfortable and they want the traffic)---and you don't want to see that! No wonder, you fly them! Enjoy!


Freebrd,

I am soooo glad you guys can get out from your gate to the departure end of the runway in 10 minutes-----awesome. Can you do that everyday all day long? No? I didn't think so. Do you not hold at Macey, Sinca, or LaGrange very often? We did last week for no reason other than traffic congestion--and then we had a 25 mile downwind at 170 knots. I guess that doesn't happen to you. You have priority. You don't sit in that congo line during the INTL departure bank around 5:30 pm and watch 15 RJs and ATRs leave too? Whatever dude---even ORD has seen the problem--and AA and UAL are cutting RJ flights because the mainline planes can bring in more revenue. I guess that problem was made up?

The problem here (and listen up please) is that with the lower fares and higher fuel costs---we need MORE seats to cover the costs. We parked a lot of our planes after 9-11 (L1011s and 727s, then MD-11s after Iraq) due to the lack of passengers---but WAIT--they have now returned. What can we do? We know the fares are less, and that we have more planes but less total seats. The more planes clog the system, and we still can't bring in enough revenue. The reason you don't like this argument is because it is true, and you know you might be left out.

And, instead of me and On Your Six coming up with more of this crap for "management"----why don't you and X-ream-me come up with a good argument against what I am saying? You don't have one---this is a revenue problem and Grinstein said he wants to "earn" his way out of this. With more LCC competition and more LCC aircraft coming into view---RJs won't be the answer. He even stated that point--that RJs aren't the "cure all." Bigger planes with more seats will have to be a part of the solution. A 717 versus an RJ---the 717 always wins--especially with business passengers. Enjoy!

Bye Bye--General Lee

 

[MedFlyer]

Xream-me (Sarge),

Talk about a genius! The DFW area is growing at a very fast rate, and we are leaving it to RJs! That is the point Sarge, and you can't see that. Time to read up on your facts or just ship out back to Iraq. IF you can't see that marketing is screwing up with a 70 seat RJ to JFK each day (two huge cities with millions of people and only a 70 seat RJ each day)----then you can't see the forest through the trees. At ease soldier. Everyone else can see that Delta has just given up on that hub, and the city is still growing and the economy is getting better. RJs are invading, and business passengers are leaving----leaving the 70 seat RJ nonstops to get on more comfortable planes(to DEN, PHX, OAK, SNA, ONT, SLC, DCA, JFK, MSP, MSY)---and you don't want to see that! No wonder, you fly them! Enjoy!

Bye Bye--General Lee

To be honest General, your analysis about DFW is a little shallow. DL has never had much luck with DFW. Even when DL had 200+ mainline flights, the hub didn't do very well. LF's on most routes out of DFW hovered around 60%. That was ok years ago when yields were high. Now, yields are low and DL cannot fly around half empty mainline planes with $99 specials.

DFW may be growing, but it can't support two high cost carriers hubs with yields as low as they are today. Since AMR is the hometown carrier and has all the business traffic, AMR wins the war.

Not to mention that more and more traffic is flying point to point. People don't want to fly through DL's hubs (or any other carriers hubs), unless they have to. If you live in MSY and want to go to DEN, you don't want to connect through DFW on DL. It doesn't matter if DL flies RJ's or 777's, people want to go nonstop.

Going forward, there will be fewer hubs in the US. There will be a number of megahubs like DEN, ORD, DTW, ATL to connect people who live in smaller markets. People in larger markets will go nonstop and bypass secondary hubs like PIT,MEM,STL,etc. DL's DFW hub will likely be a victim of this trend.

 

[enigma]

Some of ya'll just type and type, too bad you never really stop to read. General Lee is not attacking RJ pilots, he is attacking the way in which DAL management is using RJs. He doesn't agree with the management strategy of using an RJ between large city pairs, especially when the competition is flying larger equipment.

Ya'll need to stop fighting with each other. Neither DCI pilots, nor mainline pilots, will have a job in a couple of years if the parent doesn't become profitable.

enigma

 

[BluDevAv8r]

A 717 versus an RJ---the 717 always wins--especially with business passengers. Enjoy!

General,

As others have stated previously, you should leave the CEO stuff to the CEO's in my opinion. For example, how can you say that a a 717 will be the best choice over RJ in EVERY situation? That is a bit premature and silly, no?

Let's look at a scenario:

40 passengers want to fly from ATL to LIT. All 40 are full fare passengers (business passengers). The CASM of the RJ is certainly more than the CASM of the 717. However, CASM is only the unit cost part of the equation. If only 40 people want to go, CASM doesn't truly come into play because total trip yield and RASM are more illuminating. The yield will be higher for the RJ than for the 717 and as such, a better and more sound decision would be to utilize the RJ over the 717, EVEN IF the 717 has a lower CASM.

Let's look at another scenario:

120 passengers want to fly from ATL to IAD. Of those, 50 are full fare passengers (business passengers) and 70 are leisure customers (mom, pop, and the kids). Should we use a 717 or an RJ?

Well, at first blush most would think we should utilize the 717 since you can get a high load factor with the 717 and it has more seats so of course, you can make more revenue with the 717, right? Yes, that is true...higher revenue than with an RJ. But what if I told you we could get a higher yield with the RJ and thus, more profit per trip segment?

Yes, that is what I said. More PROFIT with the RJ than with the 717, despite the fact that the 717 brings in more revenue on a total trip basis and has lower costs on a seat mile basis. But...it has lower revenue on a seat mile basis as well.

Here is how - Those 50 full fare passengers are willing to pay a full Y fare and as such, more than cover the CASM of either airplane. However, the 70 remaining passengers barely cover CASM, if at all, with their 3 week advance restricted fare. Thus, these 70 low fare customers are "anchors on the ship," dragging down the average fare and thus, the yield. So as CEO, your goal is to maximize the bottomline. Yes, you can fly the 717 and bring all 120 people, with a margin of X. But if you fly the CRJ, leaving behind mom, pop, and the kids (and taking the business traveller only), you are improving yield and thus, flying that segment with a margin of X+Y, with Y being the incremental yield associated with not dragging down the average fare from bringing the low fare people.

This is CAL's strategy (much to the dismay of the mainline pilot), but it works better than flying bigger airplanes than the market dictates.

-Neal

 

[FLB717]

I'll bite, you take the 50 and I'll take the 70 and add them to my 50 high (12 Biz class even higher yeild )yield pax. No problem.

 

[XRMEFLYER]

More comfortable planes you say private! Like what the coach section of a 75, 73, or 80? Yeah, real luxurious back there!

"Lots of SUVs in DFW"... That was rich!

Calling this clown's drivel an "analysis" does the word a great disservice.

 

[BluDevAv8r]

I'll bite, you take the 50 and I'll take the 70 and add them to my 50 high (12 Biz class even higher yeild )yield pax. No problem.

Hate to say it FLB, but AAI doesn't have "high yield" passengers in the traditional sense of the word. AAI survives by keeping its average fares low and filling airplanes up to capacity, just as JB and SWA do. Totally different model, and as such, my comparison of the 717 vs RJ was predicated on operating the 717 by a "Delta" or "Continental" and not Airtran.

-Neal

 

[General Lee]

X-ream-me flyer(Sarge),

Your one liners have no substance. You still haven't brought anything to the table---instead you use put downs.


Bludevav8tr,

The problem with your explanation is that you overlook business passengers' hatred for uncomfortable RJs. The Wall St. Journal Weekend edition just had a large front page article about how the majority of business travelers will try to find a way to NOT fly RJs--especially long distances. Some of them do not have a choice in some markets, but when they do--they often go for the mainline sized jet. I recently stated that a businessman told me that his travel person at his company has a standing order to avoid all RJs for any company business. So, for the lucrative business traveller that usually has to pay a higher fare for unexpected travel---the 717s really do win. And with the lower fares coming----larger planes will also have to carry more leisure passengers to just break even.

Medflyer,

I know that some of the DAL hubs are more profitable than others. But, giving up on hubs--especially when the passengers are returning, shows a lack of any pre-planning. The RJs were good for post-9-11, due to the fact that theykept market share. But, now that the people are back, the lack of available extra mainline aircraft is actually hurting us. The only planes we have in the desert that are probably airworthy are the 11 MD-11s---and they are too big for almost every domestic market. The guys down at the GO in ATL didn't see that the people would be back so soon. They didn't plan on this happening so quickly. So, we have to charge less to compete, and have fewer seats to bring people into the hubs. We also moved 36 mainline 757s to Song, and instead replaced them with 30 or so 737-200s from Express---also reducing the number of seats into the hubs. We are left with many more aircraft (RJs), and not enough seats to turn a profit at these low airfares. Is that your fault or my fault? No. But we will all eventually have to pay for it.

Enigma,

Thanks for backing me up---my view here is not against the DCI pilots like you said. I am trying to show what I think is wrong with the system.(besides us taking pay cuts....which I still think we should)

Bye Bye--General Lee

 

[XRMEFLYER]

Your one liners have no substance. You still haven't brought anything to the table---instead you use put downs.

You make it so easy with your keen insights into the business.

"Everyone drives an SUV in Dallas and seems to have plenty of money." Consequently, the whole model in DFW is flawed. I've asked before and you still have not answered, You're still trying to decide I'm sure, but are you as stupid as you want to be?

That crap you regale us with daily is not substance hero. Stick to doing the walk-arounds and fetching the coffee, I'm sure you are at least reasonably competant at that.

 

[General Lee]

X-ream-me,

Man, you really are trying to shut me down, but you fail to realize that I can say anything I want and will continue to do so. My DFW comment was an observation, not dogma. You give me a lot more credit, and I was saying it as a funny observation. You took it wrong. You take a lot of things wrong, primarily because you are jealous and not happy yourself. I enjoy this industry and my job, and I enjoy this board. I have contributed money, and I am entitled to give my opinion. You and your one liners are so one sided it is funny. Good for you that you only care about yourself and your well being. I actually show an interest in many other subjects and other airlines on this board, but you are only out for yourself and would "never give a penny up " for Comair.....Good for you dawg----

Bye Bye--General Lee

P.S. Here is the best X-ream-me line EVER:

"You're still trying to decide I'm sure, but are you as stupid as you want to be?"

Man, you are an idiot. Oh wait, incoming! Here comes some more stupid put downs....

 

[XRMEFLYER]

you really are trying to shut me down

You don't miss much do you slick?

but you fail to realize that I can say anything I want

No, we are all painfully aware of your propensity for saying "anything you want." So does my four year old.

My DFW comment was an observation, not dogma. You give me a lot more credit, and I was saying it as a funny observation. You took it wrong.

Actually, your "observation" sounded a lot like someone who thought they knew better how to run an airline than those whose job it is to do so. But you do that so often, 2500 times give or take, that it all begins to sound the same.

You and your one liners are so one sided it is funny

You are not exactly renowned for your objectivity so as difficult as it is for you, try not to be such a hypocrite.

I actually show an interest in many other subjects and other airlines on this board,

No, you presume to be some kind of expert in "many other subjects and airlines on this board" and when you are called on it you get your feelings hurt.

you are only out for yourself and would "never give a penny up " for Comair.....

First, those who shout the loudest about their good deeds and altruism are generally(you get it?) full of crap. I'm sure you are the exception. Second, It's Delta and not Comair that needs the money. I don't work for Delta.

Here is the best X-ream-me line EVER: "Are you as stupid as you want to be?"

Thanks, I'm glad you enjoyed it. Here's my favorite though:
Put some vagisil on it, suck it up and drive on Mary!

 

[General Lee]

X-ream-me,

You look ridiculous. Talk about a baby. You can't take someone's opinion and leave it at that. You have to discount it, when it is correct. You need help, and remember this--Delta does pay for most of Comair's expenses and it would not be as profitable without the help---as said by our CFO.....Sorry.

Bye Bye--General Lee