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Interesting Mike Boyd Article On Wright Amendment  
User currently offlineApodino From United States of America, joined Apr 2005, 4317 posts, RR: 6
Posted (8 years 6 months 3 weeks 1 day 10 hours ago) and read 3666 times:

Key Points:

1. WN's load factor at DAL sucks and is currently a huge liability for the airline
as its an underperforming city.

2. DAL is very poorly located for WN to have good yields there even if Wright goes away.

3. By opposing repeal of Wright, AA may be putting themselves in a bad position, because DAL may become so unbearable that WN will be forced to DFW, which is a nightmare for AA.

4. Just because WN says they won't move to DFW doesn't mean jack, after saying they would never serve DEN again.

5. By supporting the protect the children and stop the noise groups against more airport noise, and then adding flights into DAL, AA becomes a bunch of hypocrites and ticks off a lot of people in the metroplex.

6. If WN can't make DAL work in its present state, no one else can, and therefore traffic wouldn't flock to DAL, as others have claimed.

Here is the full article.
http://www.airportsusa.com/snapshottemplate.htm#May%2022,%202006

6 replies: All unread, jump to last
 
User currently offlineRL757PVD From United States of America, joined Dec 1999, 4716 posts, RR: 11
Reply 1, posted (8 years 6 months 3 weeks 1 day 9 hours ago) and read 3653 times:

I usually read his forecast flash each monday but i think he really missed it on this one. How stupid does he think WN is? Would they be spending millions and millions to repeal the legislation for an underperforming station?

When reading this he left out THE MOST IMPORTANT ISSUE ---> REVENUE/PROFIT!!

Who the hell cares what the loads are if the yeilds are right.

Sample city pairs:
DAL (32°50'50"N 96°51'06"W) AMA (35°13'10"N 101°42'21"W) 323 mi
DAL (32°50'50"N 96°51'06"W) LBB (33°39'49"N 101°49'22"W) 293 mi
DAL (32°50'50"N 96°51'06"W) SAT (29°32'01"N 98°28'11"W) 248 mi
DAL (32°50'50"N 96°51'06"W) AUS (30°11'40"N 97°40'12"W) 189 mi

Lets assume an average stage length of 300 miles

1 way flight 300mi @ 137 seats = 41,100 ASMs

Lets do worst case scenario 50% (68.5 pax) loads at $79 (lowest) fares = revenue of $5411.5

Revenue/ASMs = $0.13666

Remember...thats the LOWEST case scenario!

Thats a 1/2 full plane at the lowest fares with a RASM probably double that of WN's CASM (between $0.06 and $0.07 or so...i dont have specifics)


Boyd is usually pretty good, but i was suprised and dissapointed with him on this report.



Experience is what you get when what you thought would work out didn't!
User currently offlineCkfred From United States of America, joined Apr 2001, 5309 posts, RR: 1
Reply 2, posted (8 years 6 months 3 weeks 1 day 9 hours ago) and read 3623 times:

You have to remember that the systemwide load factor for a carrier is not an accurate protrayal of filled seats on airplanes.

WN's systemwide load factor is 69.2%. That doesn't mean that any given flight has 30% of its seats empty. That means that there are a lot of full flights, with enough flights that are very empty to pull the average down to approximately 70%.

I seem to recall that WN has one of the highest rates of involuntary bumping in the industry. And if you've watched "Airline", you know that CSAs have a horrible time getting people to take vouchers for later flights. That tells me that WN has a lot of full flights.

So, the fact that WN's routes out of DAL all perform below the systemwide load factor does tend to bolster Mike Boyd's point.

Obviously, if the article showed AA's load factors to the same destinations out of DFW, that would be very interesting. I have a hunch that AA's load factors are better than WN's.

Also, WN's load factors out of MDW to destinations in the Midwest, such as STL, SDF, DTW, CLE, OMA, MCI, and BNA, would also be of interest. If WN performs better at MDW, where it competes with both LCCs and legacy carriers, as well as having AA and UA hubs at ORD, that would show that DAL is not as popular with Metroplex travelers as WN would have us believe, despite the fact that WN dominates at DAL.


User currently offlineRottamo From United Kingdom, joined Dec 2005, 138 posts, RR: 0
Reply 3, posted (8 years 6 months 3 weeks 1 day 9 hours ago) and read 3621 times:

Quoting RL757PVD (Reply 1):
Remember...thats the LOWEST case scenario!

You can get real yields from here:
http://ostpxweb.dot.gov/aviation/X-5...le_files/consumerairfarereport.htm

and CASM is probably two or three times higher than average on some routes because some flights are really short.

Average fare Dallas - Houston for SWA is 88.19 and lenght is 247 -> yield is 0.36
Albuquerque, NM-dallas 125, lenght 580 -> 0.22.

and so on...
after quick excel work
yield orgin destination carrier market share
0.22 Albuquerque, NM Dallas/Ft. Worth, TX WN 66 %
0.22 Amarillo, TX Dallas/Ft. Worth, TX WN 83 %
0.48 Austin, TX Dallas/Ft. Worth, TX WN 80 %
0.31 Corpus Christi, TX Dallas/Ft. Worth, TX WN 65 %
0.20 Dallas/Ft. Worth, TX El Paso, TX WN 71 %
0.28 Dallas/Ft. Worth, TX Harlingen, TX WN 98 %
0.36 Dallas/Ft. Worth, TX Houston, TX WN 66 %
0.26 Dallas/Ft. Worth, TX Little Rock, AR WN 74 %
0.26 Dallas/Ft. Worth, TX Lubbock, TX WN 85 %
0.25 Dallas/Ft. Worth, TX Midland/Odessa, TX WN 87 %
0.26 Dallas/Ft. Worth, TX New Orleans, LA WN 62 %
0.46 Dallas/Ft. Worth, TX Oklahoma City, OK WN 67 %
0.34 Dallas/Ft. Worth, TX San Antonio, TX WN 77 %
0.34 Dallas/Ft. Worth, TX Tulsa, OK WN 70 %




Rottamo


User currently offlineRottamo From United Kingdom, joined Dec 2005, 138 posts, RR: 0
Reply 4, posted (8 years 6 months 3 weeks 1 day 8 hours ago) and read 3607 times:

BTW.
Here is one old article about Dallas Love field:
http://www.unisys.com/transportation...ons/r2a__consulting/scorecards.htm

Vol. 3. Issue 4 (January 2005; PDF, 1.26MB)
Airport Comparison: Dallas/Ft Worth and Dallas Love, Part 4.

In that report there are a lot of interesting data.

Rottamo

[Edited 2006-06-01 06:53:20]

User currently offlineRottamo From United Kingdom, joined Dec 2005, 138 posts, RR: 0
Reply 5, posted (8 years 6 months 3 weeks 1 day 8 hours ago) and read 3595 times:

WTF. I started to read Boyds column and found following comment:
(Note that some of this is likely offset by higher yields, but the fact remains that Southwest has load factor problems at Love - problems that cannot be addressed without the elimination of the Wright Amendment.)

He haven't calculated yields before he does his conclusions?

Dot data is out there. Unisys analysis was a lot better. It is old but still.

Rottamo


User currently offlineRL757PVD From United States of America, joined Dec 1999, 4716 posts, RR: 11
Reply 6, posted (8 years 6 months 3 weeks 1 day ago) and read 3517 times:

Quoting Rottamo (Reply 5):
WTF. I started to read Boyds column and found following comment:
(Note that some of this is likely offset by higher yields, but the fact remains that Southwest has load factor problems at Love - problems that cannot be addressed without the elimination of the Wright Amendment.)

I must have missed that note, but as mentioned, who cares if the loads suck if the yeilds are good. Knowing that there is almost always an open seat may be in the minds of walk-up travelers knowing they can always get on WN at the last minute.

IMHO it is just a hiddeous oversight from someone who really should know better. an airline like WN who micromanages (in a good way) costs is NOT going to spend millions for a station they feel will underperform. Wn did not get where they are today by wasting millions of dollars on stupid things.



Experience is what you get when what you thought would work out didn't!
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