Laxintl From United States, joined May 2000, 8353 posts, RR: 11 Posted (11 months 1 week 19 hours ago) and read 1988 times:
Ran across document highlighting the profit margin of US network carriers international flying for the 2nd quarter 2007 per ASM.
Atlantic
AA +17.7%
CO +38.2%
DL +3.2%
NW +27.7%
UA +27.1%
US +9.4%
Latin
AA +7.4%
CO +36.2%
DL (-1.3%)
UA +4.4%
US +16.8%
Pacific
AA +4.8%
CO +11.9%
DL +7.3%
NW (-1.2)
UA +15.9%
Couple things stand out for me
-DL Atlantic profitability margin lags its peers by far. Obviously lots of new routes have start up cost and take time to mature
-Surprised AA's Latin margins are not stronger consider is strenght in the region. CO outperforms everyone by far.
-NW loosing money on its vast Pacific network for the quarter.
Laxintl From United States, joined May 2000, 8353 posts, RR: 11 Reply 2, posted (11 months 1 week 14 hours ago) and read 1780 times:
I suspect one reason for CO's Latin America success could be result of the many unique Mexico RJ routes it offers at IAH hub which attract a good deal of US business traffic.
From the desert to the sea, to all of Southern California
Panamair From United States, joined Oct 2001, 2896 posts, RR: 15 Reply 3, posted (11 months 1 week 14 hours ago) and read 1755 times:
What's interesting about the CO numbers is that with such huge margins for international, domestic must have continued to be a real stinker since CO's overall Q2 2007 operating margin was only 7.1%...
N1120A From France, joined Dec 2003, 22567 posts, RR: 78 Reply 4, posted (11 months 1 week 14 hours ago) and read 1747 times:
Quoting Laxintl (Reply 2): I suspect one reason for CO's Latin America success could be result of the many unique Mexico RJ routes it offers at IAH hub which attract a good deal of US business traffic.
That is absolutely the key there. Also, remember that they do a fair bit do South America as well.
Quoting Panamair (Reply 3): domestic must have continued to be a real stinker since CO's overall Q2 2007 operating margin was only 7.1%...
Well, not necessarily. Remember that a lot of those international margins are bolstered by writing down the cost of getting the people to a hub as a loss. Creative accounting.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
MaverickM11 From United States, joined Apr 2000, 10015 posts, RR: 40 Reply 6, posted (11 months 1 week 14 hours ago) and read 1699 times:
Quoting Laxintl (Thread starter): -NW loosing money on its vast Pacific network for the quarter.
I thought NW's Pacific network was just not as profitable as everyone thought; turns out it's just not profitable. That NRT hub has got to be one expensive albatross.
WorldTraveler From United States, joined Aug 2003, 4763 posts, RR: 17 Reply 11, posted (11 months 1 week 13 hours ago) and read 1610 times:
Quoting Panamair (Reply 3): What's interesting about the CO numbers is that with such huge margins for international, domestic must have continued to be a real stinker since CO's overall Q2 2007 operating margin was only 7.1%...
absolutely.
Selective cutting and pasting of data is irresponsible; I'm not sure that Avaition daily considers leaving out 1 of 4 data groupings is enough to protect their copyrights.
If laxintl had also posted the domestic numbers, we would see that CO was not profitable in the domestic arena (again) and that DL, NW, and US were all very profitable (more than 2 cents per ASM on their domestic system).
GIven that no US airline is more than 50% international, you can't be competitive financially unless you can make money domestically.
DL is clearly making money on its domestic system in bucket loads in order to help support its international expansion.
Despite NW's substantial domestic and transatlantic profits, it lost money on their Pacific system at the same rate DL did in Latin America (very small).
Note also that UA said that it is considering asset sales (Chicago Trib). Perhaps their NRT hub since UA is profitable and has many NRT overfly routes while NW does not. NRT is valuable for the local traffic rights but not as a hub.
Also, note that US' numbers are for US East. HP lost money.
Thread is about Intl profitability, hence no need or desire to list domestic earnings.
There has been much growth and focus on international flying by US carriers recent years, and felt it would be interesting to see how carriers stack up profitwise with their peers.
Quoting WorldTraveler (Reply 11): Selective cutting and pasting of data is irresponsible; I'm not sure that Avaition daily considers leaving out 1 of 4 data groupings is enough to protect their copyrights.
I actually left very much out. RASM, CASM, yield charts were excluded. I simply posted a summary of their operating margins.
For the full data, either sift thru the DOT data directly, or subscribe to AvDaily for the combined pretty charts.
From the desert to the sea, to all of Southern California
Flavio340 From United States, joined Oct 2005, 97 posts, RR: 0 Reply 13, posted (11 months 1 week 13 hours ago) and read 1539 times:
[QUOTE]Note also that UA said that it is considering asset sales (Chicago Trib). Perhaps their NRT hub since UA is profitable and has many NRT overfly routes while NW does not. NRT is valuable for the local traffic rights but not as a hub.[QUOTE]
WorldTraveler I am sorry I have not read the article but are you saying that UA is considering selling off its NRT hub? That would not surprise me since all of their Asian routes are accessible either direct from SFO, or through HKG.
Who would be some potential buyers for NRT? My money would be on AA
Also does anyone know if UA can sell the hub with the way the bilateral is written? It is my understanding that it has to be an operating certificate change, much like when AA bought TWA to get the access to LHR.
I find it surprising that all the carriers (CO excepted) posted their weakest margins in the areas where the airlines have the strongest presence. AA Latin America (+7.4), DL Atlantic (+3.2), UA pacific (+15.9), NW Pacific (-1.2), US Atlantic (+9.4)
Could this be because this is where the airlines have the most seats flying therefore the greatest chance of flying empty seats during off peak times?
WorldTraveler From United States, joined Aug 2003, 4763 posts, RR: 17 Reply 14, posted (11 months 1 week 13 hours ago) and read 1536 times:
Quoting Laxintl (Reply 12): Thread is about Intl profitability, hence no need or desire to list domestic earnings.
which is meaningless. No airline operates as an international or domestic entity. They are one airline.
Failing to properly address (or even bother to mention the total picture) is irresponsible.
It also is irresponsible to fail to show the capacity changes in each of those entities. The reason why some airlines (like DL) are making money domestically now is because they cut capacity. Believe it or not, not all carriers are adding capacity in every entity. CO's Latin capacity is virtually flat while UA continues to pull capacity to Latin America - major drivers in determining profitability.
I read the data and know exactly what it said... and what you excluded.
Again, use the data responsibly or leave it to people who will.
Travelin man From United States, joined Mar 2000, 2799 posts, RR: 0 Reply 15, posted (11 months 1 week 12 hours ago) and read 1497 times:
Quoting WorldTraveler (Reply 14): which is meaningless. No airline operates as an international or domestic entity. They are one airline.
Failing to properly address (or even bother to mention the total picture) is irresponsible.
It also is irresponsible to fail to show the capacity changes in each of those entities. The reason why some airlines (like DL) are making money domestically now is because they cut capacity. Believe it or not, not all carriers are adding capacity in every entity. CO's Latin capacity is virtually flat while UA continues to pull capacity to Latin America - major drivers in determining profitability.
I read the data and know exactly what it said... and what you excluded.
Again, use the data responsibly or leave it to people who will.
Oh please. He posted an interesting comparison of profit margins on US airlines for various international regions. I think it is interesting data, and I am glad he posted it. He didn't draw "irresponsible" conclusions or anything like that.
Your use of the word "irresponsible" is irresponsible (and silly).
Laxintl From United States, joined May 2000, 8353 posts, RR: 11 Reply 16, posted (11 months 1 week 12 hours ago) and read 1497 times:
Quoting WorldTraveler (Reply 14): which is meaningless. No airline operates as an international or domestic entity. They are one airline. Failing to properly address (or even bother to mention the total picture) is irresponsible.
As I said its meant to look at International margins of US carriers. You want to know about their domestic performance then you can research them.
At the end of the day, if you dont like this topic, then disregard it. Others have found the information interesting.
From the desert to the sea, to all of Southern California
WorldTraveler From United States, joined Aug 2003, 4763 posts, RR: 17 Reply 17, posted (11 months 1 week 12 hours ago) and read 1483 times:
no, I will not disregard it. You can either RESPONSIBLY post the total picture or other people will do it for you and trash your credibility in the process.
Data can be manipulated any number of ways... cutting a piece here or there is irresponsible and exactly why people like you will be challenged when you fail to appropriately handle it.
MAH4546 From Sweden, joined Jan 2001, 22298 posts, RR: 64 Reply 18, posted (11 months 1 week 12 hours ago) and read 1477 times:
Quoting Travelin man (Reply 15): Oh please. He posted an interesting comparison of profit margins on US airlines for various international regions. I think it is interesting data, and I am glad he posted it. He didn't draw "irresponsible" conclusions or anything like that.
Don't try to argue. The numbers aren't flattering for Delta, so therefore they are not good figures. Pretty simple.
WorldTraveler From United States, joined Aug 2003, 4763 posts, RR: 17 Reply 19, posted (11 months 1 week 12 hours ago) and read 1454 times:
it has nothing to do with Delta. They aren't terribly flattering for AA but I didn't go there.
It also would lead one to not know that NW's domestic operation significantly supports its Pacific operation. On the other hand, CO's sterling international results mean very little when they lose money domestically (unique among network carriers) and had one of the
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CO domestic had a -3.9% operating margin in Q2.
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, at least part of the problem.