General Lee
Well-known member
- Joined
- Aug 24, 2002
- Posts
- 20,442
You make it seem like the mainlines aren't in a pickle, either, which is hardly true. They have limitations on where they can send their planes, and they also have to pick their fights. Just look at what's going on at SEA right now.
Let's get something straight. Inefficient doesn't mean "makes negative profit." Your CEO is clearly wanting to increase that $1.5 BILLION in profit. If the 50-seaters were losing money this whole time, they would've been dumped a long time ago.
And yet, Embraer, CSeries, and the RRJ programs seem to be doing JUST fine. (We'll leave Mitsu off the table for now, because that plane isn't flying yet.)
Then throw in new rules that affect the Regionals. In the past 10 years there were plenty of 250 hour wonders coming out of UND or wherever, and that helped feed the Regionals growth. Unlimited supply it seemed. Now, that is changing. Not only is it more expensive to go to those Universities or even do it privately (especially in a downturn), but the GOVT raised the requirements. 1500 min unless you go to an approved (expensive) facility, and even 800 hours isn't easy to get. Next throw in fatigue rules that hamper super efficiency, something Regionals and Major partners count on.
Indy had a lot of other problems besides competing with UA. In fact, competing with UA really WASN'T their problem; it was costs associated with a large, dormant fleet, and the costs and time it took to get the A320 on the certificate.
They were dismantled because they were both wholly owned, and thus easy targets. Yes, Delta was looking to reduce 50-seat lift after the contract was signed, BUT they couldn't just go to anyone and say, "Thou shall..." No, that would be a breach of contract. The 70-seat replacements was negotiated because DL couldn't bully around a contract. SKYW easily took those orphaned airplanes and put them somewhere else, where they're ALSO making a profit.
Keep? No. Leverage, yes.
How much of Delta's profits were from ancillary fees, though? How much of that was from the oil refinery? The 50 to 70 seat reduction had VERY little overall impact on that.
I still don't understand why UA cut those particular flights. Perhaps they weren't tthe biggest profit makers, but they were great connector flights for those who didn't want to bother driving to LAX, and many frequent flyers LOVED them.
Look what's happening in SEA right now you ask? You mean expansion? DL will add nonstops to Hong Kong, Seoul, and Heathrow shortly. The gate problem is being worked on by the airport authority, and the E170/CR9 connection flights are there to provide some feed opportunities that AK cannot provide due to their own planes being full. DL will do it themselves if AK can't. Sounds good to me. Additional mainline flights have been added too, like SEA to ANC.
No, it sounded on the conference calls that the 50 seaters weren't making money. Until the 717s came into the pic, the RJs were the only thing around to provide some feed. Now the 717s fly current 70/76 routes, the 70/76 seaters fly for outgoing 50 seaters. The RJ manufacturers wouldn't take the 50 seater back unless SOME 70/76 seaters were purchased, so overall it worked out well, primarily with 88 717s recapturing a lot of previous mainline routes, at mainline rates! I do see a trend with those 717s, though. They are moving 76 seaters around as they replace them, and even moving Compass E175s out West, with an eventual LAX base for those crews. That means certain carriers with the Majority of flights out West could get replaced. In other words, no feed is permanent I guess....
Did you say there are some bigger RJs out there, like the CSeries? Who will fly them? The scope clauses say mainline pilots. If SKW gets bigger RJs, the contract states they lose DL feed.. Only the "Frontier" grandfather clause remains, since Republic owned Frontier at the time. I don't see that changing. Again, higher profits means fewer concessions at the table.
And, ancillary fees are huge, and apparently not going away. People seem used to them. The debt has been paid down so fast that DL management decided to go for even more, and decrease debt by an additional $3 billion. It's a revenue machine.... Can SKW take advantage of that trend? Not really, DL, UA, AA, and US collect the fees while pax ride on you guys. Billions in extra revenue, all going to your legacy partners. That likely won't change either, or you would probably be replaced, and if you didn't like it, you could always try to be the next Indy Air...
Bye Bye---General Lee
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