Majors OWNING 50 Seat RJs in LCC Environ

[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

 

[BluDevAv8r]

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.

They can "hate them" all day long but until the CEO's and their revenue management notice and experience a "booking away" tendency from their customers, they will continue to deploy RJ's. You are using an emotional response to a rational financial situation. Try looking at it from a more logical and concrete position and not simply, "passengers hate the RJ."

For every article that talks about passengers hating the RJ, I'm sure we could find enough people to praise the convenience and other positives of the 50 seat jet.

-Neal

 

[General Lee]

Neal,

Try to look at it as a revenue generator. The RJs are currently bringing in good loads for Delta, but with the lower fares, we need more passengers to cover the costs. We also need more passengers that are willing to pay walk up fares. Those people are business people, and they are more and more trying to avoid RJs. That is a fact---not emotion here. I never said that RJs weren't good on every route, just the ones with DIRECT competition with LCCs. Those routes are growing everyday with the rapid expansion of LCCs, and absent of lower crew costs (which are on the way)--the only other solution is the addition of seats. Routes like CVG to Sioux Falls are perfect for RJs---due to the lack of direct competition with LCCs and the higher fares. Can you see my point? Southwest doesn't have RJs, and Airtran is getting rid of their's and sticking with an all mainline sized fleet. Jetblue will have 100 seaters---which really can't be classified as RJs. That should tell you something. But, they will never go to places like Sioux Falls or Dothan. (not yet, anyways) My point covers the routes with direct competition and lower fares, not the other cities.

Bye Bye--General Lee

PS--I know guys at Expressjet and they love that ERJ and like doing Halifax one night and Verecruz the next. I think your company is well run, and I hope you get your contract finished soon.

 

[XRMEFLYER]

You can't take someone's opinion and leave it at that. You have to discount it, when it is correct.

When it is correct huh? You pretty much summed up my argument for me on that one. You fancy yourself some kind of industry guru and it got old a long long long time ago listening to your opinions. So yes, I do enjoy and will continue to take some measure of satisfaction in shining the light on your "expert analyzes."

remember this--Delta does pay for most of Comair's expenses and it would not be as profitable without the help

I'll try to remember! I am sure you will remind us again and again. You remember this- Just because you say it with conviction does not make it so.

AMF

 

[General Lee]

X-ream-me,

You are correct---and you also think you are ALWAYS correct. Look in the mirror--you slam me for the same things you yourself do. If you think I am wrong, that is fine with me---that is your opinion. I try to give examples and give my opinion--yet you slam me. You never give any concrete examples yourself. You are the hypocrite. And, this is an OPINION board and interview board. If you don't like what is being said---turn it off. I have admitted when I was wrong also.

Bye Bye--General Lee

 

[Turbo]

I know that many of the "big five" auditing/consulting firms refuse to put their business folks on LCCs, and this has remained the case even in our recent depressed economy.

Without a doubt, there exists a market for LCCs. And in a depressed economy the LCC market share will predictably grow larger.

My parents live in Ft. Wayne, IN. Y'all let me know when Southwest or JetBlue starts flying in there. Until then, I'll be riding on a 50-seat RJ whenever I go there.

The simplistic views that are so often offered on this board fail to see the larger picture. For many, purchasing an airline ticket isn't simply a function of price. Also considered is destinations, frequencies of flights, possible upgrades, frequent flyer perks, assigned seating, terminal convenience, ammenities, and simple brand loyalty, among others. I'm sure you can think of more...

 

[XRMEFLYER]

I try to give examples and give my opinion--yet you slam me.

Stop I'm getting all misty eyed. Dry those tears Sally and take your beating like a man.

You are the hypocrite.

No you are! No you are! Nuh-uh you are! You are a bigger one!

If you don't like what is being said---turn it off.

And miss out on all of this fun? No thanks, I think I will stay and continue to pummel you regularly. It can be so therapeutic!

 

[~~~^~~~]

We also need more passengers that are willing to pay walk up fares. Those people are business people, and they are more and more trying to avoid RJs. That is a fact---not emotion here.

General :

I'm one of the guys that pays walk up fares ( the nature of my business doesn't provide the opportunity to plan travel in advance ) and all I care about is getting there, getting done and getting home. On what, or on who, I don't care. If I had the luxury of choosing, I would not pay walk up fares and if given the choice between an RJ that gets me closer, or 15 minutes less time travelling, I'm picking the RJ.

Of course, the best deal going is to avoid you guys all together and take an M20J, or F33. No airport security, hardly ever need a rental car, faster and fun!

More to the point of this thread - you guys are upset that Delta has so many RJ's and you wonder what the World would be like without 'em - just remember the numbers for CVG in 2000 while Comair was on strike. I think that cost $640,000,000.... Now imagine ATL in the same condition and you also see Delta with a one month liquidity reserve.

Of course, ALPA does not seem to mind RJ's as long as they are flown by mainline guys making less money than I do. A dollar is a dollar, so maybe you can work something out to take my job, just like your buddies at US Air.

Good luck!
~~~^~~~

 

[SDF2BUF2MCO]

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

Duke Aviator, this is interesting but can you give a dollar figure to this example? That is, what kind of costs are you anticipating in utilizing a RJ and the subsequent revenue as well as the scenario with the 717. Thanks.

 

[BluDevAv8r]

Duke Aviator, this is interesting but can you give a dollar figure to this example? That is, what kind of costs are you anticipating in utilizing a RJ and the subsequent revenue as well as the scenario with the 717. Thanks.

I didn't want to use specific cost numbers as I am not sure that they are relevant to the general point of my exercise and methodology. What I posted above is exactly why CAL uses RJ's on some traditional "mainline" segments such as IAH-MCO and CLE-DEN. They also use the RJ as a means to pick up any excess traffic at odd times of the day, such as 11am, in these markets.

You are asking about dollar figures. Can you be more specific in what you want to know? I can list general assumptions and make up a scenario but I'm not sure it is necessary. I think the point is well illustrated without using explicit numbers but just thinking generally in terms of the power of the all important metric of yield. I am trying to steer some away from their views that its all about "spreading cost over more seats" and revenue generation, etc. One can have more seats all day long with lower unit costs, but if the demand isn't there, it is pointless.

-Neal

 

[Heavy Set]

Xremflyer,

You are a class act. I happen to like General Lee's insight into the DAL mainline pilot perspective. You bring nothing to the table except jerky one-liners....

Way to go Einstein...

 

[SDF2BUF2MCO]

You are asking about dollar figures. Can you be more specific in what you want to know? I can list general assumptions and make up a scenario but I'm not sure it is necessary. I think the point is well illustrated without using explicit numbers but just thinking generally in terms of the power of the all important metric of yield. I am trying to steer some away from their views that its all about "spreading cost over more seats" and revenue generation, etc. One can have more seats all day long with lower unit costs, but if the demand isn't there, it is pointless.

-Neal

You'll have to forgive my simple mind, my brain is geared more towards operations.....
What I was wondering if, for example, if you used a 717 and had a 120 passengers (50 biz fares at $500 per, and 70 leisure at $250 per for a total of $42.5K - this is after airport taxes - in revenue). Let's say the expenses for both coming and going are $35K which leaves a $7.5K operating profit. On the RJ you get the 50 biz folks at $25K and your expenses $20K. Better yield, but overall profit dollars are lower. Just wondering if I'm using the correct logic/concept even though the numbers are not correct.

 

[Pez D. Spencer]

Our cost per flight target is less than $3000.00, far from 20K.

 

[XRMEFLYER]

Heavy,

You probably would like generally's "insights." I am happy for you and may you long continue to enjoy them.

I do not and will continue to crush his fragile little ego early and often.

As for your taking exception to my methods, well then I suggest you grab a tube of vagisil, apply liberally to the affected area and get over it!

 

[Heavy Set]

Again, example of a class act... Perhaps you could add something new to the discussion every once and awhile instead of your lame one-liners...

Seriously, you're making yourself look bad and you are wasting our time...

 

[XRMEFLYER]

Blame it on the Delta mainline pilots and their refusal to take MASSIVE pay cuts.

Add something new huh? Do you mean like this little pearl of wisdom you threw out a few minutes ago on another thread?
Looks a lot like the "one liners" you are snivelling about.
You don't occupy the moral high ground on this one fat boy so hurry to Walgreen's and get some medicine for that infection before it's too late!

 

[General Lee]

Fragil ego? Yeah right. I can take on any subject with you and win---and that is a fact. But, I guess you are the Alex Trebec in all of this---deciding what is correct and incorrect. You are an idiot. Being jealous sucks for you, doesn't it? Yes, yes it does. Have a great night. I will. (You are on the moral high ground? yeah, right---you lose)

Hey, I have a good one liner like Ex-ream-me:

"Hey private, why don't you go to Rite Aid and buy some lip balm so you can get ready to kiss Lawson's fat pooper......." Perfect. (for Xream-me)

Bye Bye--General Lee

 

[XRMEFLYER]

Fragil ego? Yeah right. I can take on any subject with you and win---and that is a fact. But, I guess you are the Alex Trebec in all of this---deciding what is correct and incorrect. You are an idiot. Being jealous sucks for you, doesn't it? Yes, yes it does. Have a great night. I will. (You are on the moral high ground? yeah, right---you lose)

Yawn...

 

[Heavy Set]

Ha! You're a genius. Give me another creative put-down (like the Walgreen line).... You've missed your calling - you should be comedic writer.

 

[XRMEFLYER]

Give me another creative put-down (like the Walgreen line)....

Are you still here? Shouldn't you be out treating that yeast infection?

 

[BluDevAv8r]

You'll have to forgive my simple mind, my brain is geared more towards operations.....
What I was wondering if, for example, if you used a 717 and had a 120 passengers (50 biz fares at $500 per, and 70 leisure at $250 per for a total of $42.5K - this is after airport taxes - in revenue). Let's say the expenses for both coming and going are $35K which leaves a $7.5K operating profit. On the RJ you get the 50 biz folks at $25K and your expenses $20K. Better yield, but overall profit dollars are lower. Just wondering if I'm using the correct logic/concept even though the numbers are not correct.

Generally speaking, you are understanding what I'm saying, yes. But the example that I was imagining was more that the leisure fares are dragging down the overall yield to a point that it might even be negative. I gave a bad example above. I perhaps should have used a better example where the 717 isn't full. Perhaps 40 business fare and 40 leisure...where the leisure fares drag the yield to negative, so the smart thing to do is just take the 40 business and 10 leisure on the RJ to keep a positive yield on that segment. Clear as mud, right?

-Neal