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US Carrier Intl Route Profitability 03Q08  
User currently offlineLAXintl From United States of America, joined May 2000, 24881 posts, RR: 46
Posted (5 years 7 months 1 week 1 day 15 hours ago) and read 7232 times:

Here are the reported US carriers international route performance for the 3rd quarter 2008 as supplied to the DOT.

The quarter saw nice increases in yields for most airlines across their networks, however the fuel spike negatively effected cost pushing many into loss during a period that has historically been the most profitable for international ops.

Atlantic

American
Operating Revenue Per ASM:16.49
Operating Expense Per ASM:15.89
Profit/Loss per ASM:-0.60
Yield per RPM(cents):15.01

Continental
Operating Revenue Per ASM:13.98
Operating Expense Per ASM:12.05
Profit/Loss per ASM:+1.93
Yield per RPM(cents):14.67

Delta
Operating Revenue Per ASM:13.50
Operating Expense Per ASM:13.66
Profit/Loss per ASM:-0.16
Yield per RPM(cents):14.04

Northwest
Operating Revenue Per ASM:13.49
Operating Expense Per ASM:12.89
Profit/Loss per ASM:+0.60
Yield per RPM(cents):13.08

United
Operating Revenue Per ASM:14.54
Operating Expense Per ASM:15.28
Profit/Loss per ASM:-0.74
Yield per RPM(cents):14.24

US Airways
Operating Revenue Per ASM:15.97
Operating Expense Per ASM:18.87
Profit/Loss per ASM:-2.90
Yield per RPM(cents):13.16


Latin

American
Operating Revenue Per ASM:17.64
Operating Expense Per ASM:16.07
Profit/Loss per ASM:+1.57
Yield per RPM(cents):16.75

Continental
Operating Revenue Per ASM:16.57
Operating Expense Per ASM:13.98
Profit/Loss per ASM:+2.60
Yield per RPM(cents):16.11

Delta
Operating Revenue Per ASM:13.69
Operating Expense Per ASM:13.57
Profit/Loss per ASM:+0.13
Yield per RPM(cents):14.16

United
Operating Revenue Per ASM:13.33
Operating Expense Per ASM:14.93
Profit/Loss per ASM:-1.60
Yield per RPM(cents):14.79

US Airways
Operating Revenue Per ASM:17.48
Operating Expense Per ASM:20.77
Profit/Loss per ASM:-3.29
Yield per RPM(cents):13.79


Pacific

American
Operating Revenue Per ASM:16.45
Operating Expense Per ASM:16.49
Profit/Loss per ASM:-0.04
Yield per RPM(cents):14.46

Continental
Operating Revenue Per ASM:13.33
Operating Expense Per ASM:10.70
Profit/Loss per ASM:+2.62
Yield per RPM(cents):13.31

Delta
Operating Revenue Per ASM:13.30
Operating Expense Per ASM:14.34
Profit/Loss per ASM:-1.04
Yield per RPM(cents):12.85

Northwest
Operating Revenue Per ASM:13.69
Operating Expense Per ASM:16.21
Profit/Loss per ASM:-2.52
Yield per RPM(cents):13.22

United
Operating Revenue Per ASM:14.13
Operating Expense Per ASM:14.33
Profit/Loss per ASM:-0.20
Yield per RPM(cents):14.26


From the desert to the sea, to all of Southern California
64 replies: All unread, showing first 25:
 
User currently offlineSESGDL From United States of America, joined Jan 2001, 3466 posts, RR: 10
Reply 1, posted (5 years 7 months 1 week 1 day 14 hours ago) and read 7094 times:

Interesting to note that AA has the highest RASM in every region, yet they also have the 2nd highest costs after US. If AA could lower their expenses they would be extremely profitable on the international side.

Jeremy


User currently offlineLAXdude1023 From India, joined Sep 2006, 7510 posts, RR: 24
Reply 2, posted (5 years 7 months 1 week 1 day 14 hours ago) and read 7064 times:



Quoting SESGDL (Reply 1):
If AA could lower their expenses they would be extremely profitable on the international side.

My thoughts exactly. I wonder what they could do to reduce costs.



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlineJetlanta From United States of America, joined Jul 2001, 3255 posts, RR: 35
Reply 3, posted (5 years 7 months 1 week 1 day 14 hours ago) and read 7066 times:



Quoting SESGDL (Reply 1):
Interesting to note that AA has the highest RASM in every region, yet they also have the 2nd highest costs after US. If AA could lower their expenses they would be extremely profitable on the international side.

Yeah, well IF I didn't have two mortgages, i'd have a lot of extra cash.  Wink


User currently offlineBreaker1011 From United States of America, joined Nov 2007, 938 posts, RR: 2
Reply 4, posted (5 years 7 months 1 week 1 day 14 hours ago) and read 7042 times:

What's going to happen to US with results like these? Seems like they are loosing their shirts across the Atlantic and into LA. In Latin Am specifically, any idea what makes their cost per ASM higher than any any carrier in any other international region? That's astounding!

Looking at these results makes you worry about Delta, especially in the Pacific. I know there are different allocation methods for the revenue and costs though.

Continental though - wow those guys are ROCKING!

LAXIntl - great post, thanks for always putting these together!



Life's tough. It's even tougher if you're stupid. J. Wayne
User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5372 posts, RR: 7
Reply 5, posted (5 years 7 months 1 week 1 day 14 hours ago) and read 7026 times:



Quoting Breaker1011 (Reply 4):
Looking at these results makes you worry about Delta,

Where is that "revenue premium to the industry" Bastian is always talking about?



I love long German words like 'Freundschaftsbezeigungen'.
User currently offlineSESGDL From United States of America, joined Jan 2001, 3466 posts, RR: 10
Reply 6, posted (5 years 7 months 1 week 1 day 14 hours ago) and read 7027 times:



Quoting Jetlanta (Reply 3):
Yeah, well IF I didn't have two mortgages, i'd have a lot of extra cash.

Of course you would.  Big grin

Quoting Breaker1011 (Reply 4):
Looking at these results makes you worry about Delta, especially in the Pacific. I know there are different allocation methods for the revenue and costs though.

DL does much better domestically than internationally, though this has a lot to do with how they allocate revenue.

Jeremy


User currently offlineLAXintl From United States of America, joined May 2000, 24881 posts, RR: 46
Reply 7, posted (5 years 7 months 1 week 1 day 13 hours ago) and read 6976 times:

One slight correction

Atlantic

American
Operating Revenue Per ASM:16.49
Operating Expense Per ASM:15.89
Profit/Loss per ASM:+0.60
Yield per RPM(cents):15.01

Quoting SESGDL (Reply 1):
If AA could lower their expenses they would be extremely profitable on the international side.

Yes seemingly AA is burdoned by a high cost structure. Suppose it has something to do with the fact the carrier is still paying millions for things such as pensions which majority of its peers have shed, and direct labor cost and productivity which many carriers were able to tweak in Ch11.

Quoting Breaker1011 (Reply 4):
In Latin Am specifically, any idea what makes their cost per ASM higher than any any carrier in any other international region?

Well remember US LatAm capacity is all on narrowbody aircraft, while many others utilize widebodies to Caribbean, CenAm, and certainly deep South American.

Quoting Breaker1011 (Reply 4):
LAXIntl - great post, thanks for always putting these together!

Glad to contribute.  Smile

Quoting SESGDL (Reply 6):
DL does much better domestically than internationally, though this has a lot to do with how they allocate revenue.

True. Time permitting I'll work on getting the domestic numbers up later today.

However regardless of how individual carriers allocate things, its still interesting to note and compare how various divisions perform within the same carrier. For instance for NWA while it having a huge Pacific presence has for many quarters now lost out vis-a-vis the carriers Atlantic ops.



From the desert to the sea, to all of Southern California
User currently offlineEXAAUADL From , joined Dec 1969, posts, RR:
Reply 8, posted (5 years 7 months 1 week 1 day 11 hours ago) and read 6820 times:

1. US is a trainwreck on international routes. If they do this poorly over the summer imagine how winter looks. Allegheny wouldnt have done any worse.

2. DL's rapid expansion has probably caught up with them and they will need to take a look at how those those routes perform after then NW merger and begin thinking about doing some cutting.

3. UA is really suffering, probably from a product image and lack of focus

4. CO is doing well. EWR-HKG/China and EWR-India must be doing well. 757s across the Atlantic must be profitable

5. Does AA still fly 762s on international? That might explain their higher costs. AA has been slammed on here for not growing like DL but now we see that AA''s more conservative strategy in the short term anyway is more profitable. AA must also be doing ok to China and India

5. NW is doing poorly on the pacific. Worse than I thought. Maybe some redelploying of the fleet with 763s from DL will help. Also some of those circa 1989 744s much have high costs.


User currently offlinePanamair From United States of America, joined Oct 2001, 4880 posts, RR: 25
Reply 9, posted (5 years 7 months 1 week 1 day 10 hours ago) and read 6687 times:
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Once again, as repeated every quarter, you cannot draw too many conclusions just by looking at the international picture - for every carrier.

Quoting EXAAUADL (Reply 8):
CO is doing well. EWR-HKG/China and EWR-India must be doing well. 757s across the Atlantic must be profitable

I don't see how one can possibly draw this conclusion. As has been reiterated here every quarter, if you took a look at CO's domestic performance every quarter (according to these same metrics), they ALWAYS show CO with a LOSS on domestic. Every quarter. Losses. Now, everyone knows that this cannot be true - there's no way that CO loses money every single quarter on its domestic network particularly with a huge market like EWR/NYC or oil-rich markets like IAH, or they, like all others, have cut capacity and driven up yields/RASM on domestic.

Again, for Q3, all you need to do is look at CO's overall financial performance for Q3, and you will see that they actually reported an operating loss, even minus all the specials. For international to be such a huge moneymaker as the above stats seem to imply, it would have to mean that domestic is deeply in the red, which again, is an overstatement.



Quoting EXAAUADL (Reply 8):
Does AA still fly 762s on international?

No, AA has not operated 762s on international for years already.

Quoting EXAAUADL (Reply 8):
DL's rapid expansion has probably caught up with them and they will need to take a look at how those those routes perform after then NW merger and begin thinking about doing some cutting.

Actually, while CO's results in this type of reporting skews heavily towards international 'profitability', DL's skews the other way around. This has been the case for many quarters now. The truth is somewhere in between: DL's domestic doesn't make as much money as these stats seem to imply and DL's international is better performing than these stats show; CO's domestic performs better than these stats, and its international is not as good as these stats' implication.

All you need to do is look at every quarter's stats - and DL shows relatively thin margins on all the international in these stats. Every quarter. Same story. The network guys at DL are no dummies. If DL were truly showing these stats with razor-thin margins (yes, look at Q3 2007 or Q2 2007 or Q2 2008 - they all don't show any spectacular 'profitability' in these stats), they would not be focusing on international they way they have been.


User currently offlineLAXdude1023 From India, joined Sep 2006, 7510 posts, RR: 24
Reply 10, posted (5 years 7 months 1 week 1 day 7 hours ago) and read 6399 times:



Quoting Panamair (Reply 9):
Once again, as repeated every quarter, you cannot draw too many conclusions just by looking at the international picture - for every carrier.

Ok, Ill bite.

If these number dont hold valitity, then whats the point is even posting them in the first place? For that matter why not just make numbers up?

Of course these numbers dont tell the whole story, but they are definately part of it.

If for one was glad to see AA post a profit on their international network!!!  Smile



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlineFlyDreamliner From United States of America, joined Jan 2006, 2759 posts, RR: 15
Reply 11, posted (5 years 7 months 1 week 1 day 6 hours ago) and read 6253 times:



Quoting EXAAUADL (Reply 8):
3. UA is really suffering, probably from a product image and lack of focus

Their product in Y is competitive against their competitors - it may not be as good as CO, but is at least the equal of DL, NW, US, and AA. Their new J and C are the best offered by any US product. I think their marketing needs to be better, on the whole though.

I agree their issue is direction. Their results are mediocre, not the best or worst, but they need to do better. They need to do better - to have a focus they leverage.

As for their current profitability, they are still working through some losing fuel hedges that negatively impact their fuel costs. Hopefully that improves for them.

Quoting EXAAUADL (Reply 8):

5. NW is doing poorly on the pacific. Worse than I thought. Maybe some

redelploying of the fleet with 763s from DL will help. Also some of those circa 1989 744s much have high costs.



Quoting EXAAUADL (Reply 8):
2. DL's rapid expansion has probably caught up with them and they will need to take a look at how those those routes perform after then NW merger and begin thinking about doing some cutting.

It is looking more and more like NW and DL really do need this merger - and they need it to everything they have said it will. NW's largest, most important international asset - its international network needs to be profitable - and DL after the largest and fastest international expansion of a US airline needs to fine tune - make their routes profitable - leverage the places they can get yield premiums and rethink areas that can't/aren't producing and don't show promise for the near future. I can only imagine there are cuts coming...

As for US - it is a mystery to me why they are doing so poorly. If they have structural problems preventing them from making money on international routes (I don't know what they are), then the A330s they are set to take delivery of are not going to do them any favors. It just blows my mind how much money they are losing.



"Let the world change you, and you can change the world"
User currently offlineGSOShutout55 From United States of America, joined Feb 2006, 125 posts, RR: 0
Reply 12, posted (5 years 7 months 1 week 1 day 3 hours ago) and read 5797 times:

Thanks for posing that. At a business student, aviation enthusiast, and investor, stats and posts like these interest me, as they are a good resource for easily and quickly assessing the raw data and facts about financial profitability and the airline in general.


Right Rudder!!!!!!!!!!
User currently offlineCarledwards From United Kingdom, joined May 2004, 262 posts, RR: 0
Reply 13, posted (5 years 7 months 1 week 21 hours ago) and read 5155 times:



Quoting FlyDreamliner (Reply 11):
Their product in Y is competitive against their competitors - it may not be as good as CO, but is at least the equal of DL, NW, US, and AA. Their new J and C are the best offered by any US product. I think their marketing needs to be better, on the whole though.

I agree their issue is direction. Their results are mediocre, not the best or worst, but they need to do better. They need to do better - to have a focus they leverage.

As for their current profitability, they are still working through some losing fuel hedges that negatively impact their fuel costs. Hopefully that improves for them.

Thanks, I completely agree with this, rather than just saying UA is bad. As a frequent flier on them I try to support them how I can, and I only fly them because I think their economy and business cabins are better on average than offered on the other US carriers, plus they are better value for money than the European carriers. I think personally its a great model, but marketed very poorly. Now they cost of fuel has come down I hope this will help them, but when did Tilton hedge the expensive fuel until?



Directoria
User currently offlineDFWEagle From United States of America, joined Dec 2006, 1071 posts, RR: 9
Reply 14, posted (5 years 7 months 1 week 20 hours ago) and read 4989 times:



Quoting LAXintl (Thread starter):

Thanks for posting these results, LAXintl - much appreciated!

Some good results for AA – they were second only to Continental in all three international regions.

Quoting SESGDL (Reply 1):
Interesting to note that AA has the highest RASM in every region, yet they also have the 2nd highest costs after US. If AA could lower their expenses they would be extremely profitable on the international side.



Quoting LAXdude1023 (Reply 2):
My thoughts exactly. I wonder what they could do to reduce costs.



Quoting LAXintl (Reply 7):
Yes seemingly AA is burdoned by a high cost structure.

As a number of people have commented, apart from US, AA has the highest costs in all regions. But they do generate a higher RASM than their competitors so their overall profitability is good in comparison with most other carriers.

AA’s high costs are partly due to the fact that they have a majority of their flights to very high-cost airports like Tokyo, Heathrow, Frankfurt, Paris, Miami etc. In addition, a lot of flights are on very low-density 3-class 777’s which pushes up the overall CASM.
These same reasons are why they able to command a higher RASM, so if they did attempt to change their business model to lower CASM, they would also lower RASM. AA has focussed on big business markets and premium paying passengers for many years. That’s their business model and they plan to stick with what is working for them.

CO has lower costs flying to much cheaper smaller airports using smaller planes. They produce lower revenues, but have much lower costs so they are actually more profitable overall.

CO and AA have two different business models and both seem to be working successfully in different ways.

Quoting LAXintl (Reply 7):
Suppose it has something to do with the fact the carrier is still paying millions for things such as pensions which majority of its peers have shed, and direct labor cost and productivity which many carriers were able to tweak in Ch11.

This is another contributory factor to AA's higher cost structure. AA may be able to reduce their costs a little by getting increased productivity from their workforce in the union negotiations, which are ongoing.
However, higher costs are not necessarily a massive problem for AA if they are consistently able to generate higher revenues for the resons discussed above. AA is likely to get a further boost in their Atlantic revenues if they are granted antitrust immunity with BA and IB and form a joint venture on Atlantic routes.



Ryan / HKG
User currently offlineJetlanta From United States of America, joined Jul 2001, 3255 posts, RR: 35
Reply 15, posted (5 years 7 months 1 week 17 hours ago) and read 4520 times:

I cannot believe that this happens every quarter.

Folks, these numbers in isolation mean NOTHING.

Airlines are network businesses. They are not designed to make money in specific entities, but rather on the whole. Airlines allocate revenues and cost differently across their networks. The reporting requirements for this data leave an enormous amount of room for variation. There is only one set of numbers you need to know about at the end of the day...


AMR: Net +45M, Excluding special gain from sale of American Beacon Investors unit -$360M
UAL: Net -$779M, Excluding Hedge Losses -$252M
CAL: Net -$236M, Excluding Hedge Losses -$145M
LCC: Net -$865M, Excluding Hedge Losses -$242M
NWA: Net -$317M, Excluding Hedge Losses +$93M
DAL: Net -$26M, Excluding Hedge Losses +363M

NWA+DAL: Net -$343M, Excluding Hedge Losses +456M

The lesson here is, once again, Form 41 financial reporting at the entity level is not a true apples-to-apples comparison between carriers. I implore you, as I do EVERY quarter, not to read too much into this data.


User currently offlineDFWEagle From United States of America, joined Dec 2006, 1071 posts, RR: 9
Reply 16, posted (5 years 7 months 1 week 16 hours ago) and read 4355 times:



Quoting Jetlanta (Reply 15):

Is there any particular reason why you have not mentioned AA’s fuel hedging activities and how they affected their bottom line? Did they make a loss on hedging or not?

If you have that information, it would be very useful to compare AA to the other carriers.



Ryan / HKG
User currently offlineLAXdude1023 From India, joined Sep 2006, 7510 posts, RR: 24
Reply 17, posted (5 years 7 months 1 week 16 hours ago) and read 4346 times:



Quoting Jetlanta (Reply 15):

You left out how AA's hedgeing affected its profits. Any reason why?



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlineLAXIntl From United States of America, joined May 2000, 24881 posts, RR: 46
Reply 18, posted (5 years 7 months 1 week 16 hours ago) and read 4232 times:

Here was the Domestic portion in Q3.

Domestic

American
Operating Revenue Per ASM:15.18
Operating Expense Per ASM:16.81
Profit/Loss per ASM:-1.63
Yield per RPM(cents):13.48

Continental
Operating Revenue Per ASM:16.60
Operating Expense Per ASM:18.77
Profit/Loss per ASM:-2.17
Yield per RPM(cents):12.80

Delta
Operating Revenue Per ASM:19.16
Operating Expense Per ASM:18.35
Profit/Loss per ASM:+0.81
Yield per RPM(cents):13.14

Northwest
Operating Revenue Per ASM:19.99
Operating Expense Per ASM:21.86
Profit/Loss per ASM:-1.87
Yield per RPM(cents):15.01

United
Operating Revenue Per ASM:17.64
Operating Expense Per ASM:19.19
Profit/Loss per ASM:-1.55
Yield per RPM(cents):13.90

US Airways
Operating Revenue Per ASM:17.34
Operating Expense Per ASM:21.30
Profit/Loss per ASM:-3.96
Yield per RPM(cents):13.15


Despite what would in many casses be record high yields at many carriers, the spike in fuel cost drowned out chances of profitability by pushing CASM thru the roof.

Quoting Jetlanta (Reply 15):
Folks, these numbers in isolation mean NOTHING.



Quoting Jetlanta (Reply 15):
They are not designed to make money in specific entities

They might not mean much to you, however they do tell a story that leads up to the big headline numbers.
Such headline numbers can be very much obscured with all types minutia making core airline operating data blurred with things such as MRO earnings, ground handling, or dozens of financial transactional schemes leaving a one unsure where the enterprise is with its core air transportation franchise. At the very least form-41 data provides some added color to the relative performance of one market over another internally.

As far as managing individual entities, I don't know what airline you are speaking off, however carriers like American and United very much operate along divisional lines with their own management and marketing teams which are responsibility for their respective geographic P&L. Some even take this further by reporting such geographic P&L in their SEC 10K reports.



btw - why is it always Deltaoid's that question the validity of such long published DOT data?



From the desert to the sea, to all of Southern California
User currently offlineLAXdude1023 From India, joined Sep 2006, 7510 posts, RR: 24
Reply 19, posted (5 years 7 months 1 week 15 hours ago) and read 4150 times:



Quoting LAXIntl (Reply 18):
btw - why is it always Deltaoid's that question the validity of such long published DOT data?

Because this particular set of Data wasnt flattering to DL so it cant possibly be correct.  Yeah sure

Quoting LAXIntl (Reply 18):
however they do tell a story that leads up to the big headline numbers.

 checkmark 

They arent the whole story, but they are part of the story. They arent to be discounted and numbers dont lie.



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlineSESGDL From United States of America, joined Jan 2001, 3466 posts, RR: 10
Reply 20, posted (5 years 7 months 1 week 15 hours ago) and read 4097 times:



Quoting LAXIntl (Reply 18):
American
Operating Revenue Per ASM:15.18
Operating Expense Per ASM:16.81
Profit/Loss per ASM:-1.63
Yield per RPM(cents):13.48

Continental
Operating Revenue Per ASM:16.60
Operating Expense Per ASM:18.77
Profit/Loss per ASM:-2.17
Yield per RPM(cents):12.80

Delta
Operating Revenue Per ASM:19.16
Operating Expense Per ASM:18.35
Profit/Loss per ASM:+0.81
Yield per RPM(cents):13.14

Northwest
Operating Revenue Per ASM:19.99
Operating Expense Per ASM:21.86
Profit/Loss per ASM:-1.87
Yield per RPM(cents):15.01

United
Operating Revenue Per ASM:17.64
Operating Expense Per ASM:19.19
Profit/Loss per ASM:-1.55
Yield per RPM(cents):13.90

US Airways
Operating Revenue Per ASM:17.34
Operating Expense Per ASM:21.30
Profit/Loss per ASM:-3.96
Yield per RPM(cents):13.15

Conversely, AA has the lowest RASM of any of the network carriers. It's interesting to note that DL has the second highest RASM and is the only carrier profitable on its domestic network, which makes up a larger portion of DL's overall ASMs than international. DL's cuts in 2005-2006 on domestic really have made DL's domestic network profitable, something difficult to do in this aviation market. Overall, US is a mess. They really need to get their house in order, they're unprofitable on every segment of their network.

Jeremy


User currently offlineJetlanta From United States of America, joined Jul 2001, 3255 posts, RR: 35
Reply 21, posted (5 years 7 months 1 week 15 hours ago) and read 4075 times:



Quoting DFWEagle (Reply 16):

Is there any particular reason why you have not mentioned AA’s fuel hedging activities and how they affected their bottom line? Did they make a loss on hedging or not?

If you have that information, it would be very useful to compare AA to the other carriers.



Quoting DFWEagle (Reply 16):
You left out how AA's hedgeing affected its profits. Any reason why?

Because AMR made no mention of losses due to hedges in its 3Q earnings release. If you can find a reference, I'll be happy to edit.

Quoting LAXIntl (Reply 18):
They might not mean much to you, however they do tell a story that leads up to the big headline numbers.
Such headline numbers can be very much obscured with all types minutia making core airline operating data blurred with things such as MRO earnings, ground handling, or dozens of financial transactional schemes leaving a one unsure where the enterprise is with its core air transportation franchise. At the very least form-41 data provides some added color to the relative performance of one market over another internally.

As far as managing individual entities, I don't know what airline you are speaking off, however carriers like American and United very much operate along divisional lines with their own management and marketing teams which are responsibility for their respective geographic P&L. Some even take this further by reporting such geographic P&L in their SEC 10K reports.



btw - why is it always Deltaoid's that question the validity of such long published DOT data?

Non-passenger revenue is a fraction of U.S. airlines' business and earnings from those units have an almost inconsequential impact on the bottom line.

Of course airlines separate out operational and marketing divisions on a geographical basis. But NETWORKS are managed by a single business unit. The nature of a network business like an airline is that everything is inter-related. The reason that these comparisons and this data is highly subjective is that airlines pro-rate their revenue and costs differently. If the average fare between St. Louis and Mumbai, for example, is $1,000. DL may assign a higher value to the domestic segment than say AA does.

In fact, I can tell you that DL and NW are finding that they each pro-rate revenue quite differently and are try to work towards a solution. This means that short-haul markets, for example, are more valuable on the P&L statement than long-hauls for NW versus DL.

In the case of Form 41 data, Delta shows stronger results on its domestic system than international partly due to its pro-ration methodology. As I have mentioned several times in the past, the carrier would not have spent the past three years moving capacity from U.S. to international markets if the DOT was an accurate reflection of real world performance.

Quoting LAXdude1023 (Reply 19):

Because this particular set of Data wasnt flattering to DL so it cant possibly be correct. Yeah sure

You know, I'm getting tired of these kind of implications. I try really hard to back up my opinions with facts. And I spend an awful lot of time explaining rather than making off handed remarks. I defend Delta a lot because I like the company, true. But I don't make sh*t up. If you can't argue back logically, please don't bother posting.

Quoting LAXdude1023 (Reply 19):
They arent the whole story, but they are part of the story. They arent to be discounted and numbers dont lie.

Number DO lie. See the above explanation. Again.


User currently offlineLAXdude1023 From India, joined Sep 2006, 7510 posts, RR: 24
Reply 22, posted (5 years 7 months 1 week 14 hours ago) and read 3986 times:



Quoting Jetlanta (Reply 21):
Number DO lie. See the above explanation. Again.

They arent the whole story, just a chapter. But they dont exist for no reason. Thats not to say that DL isnt profitable or isnt doing a good job, but we cant just write off everything thats not flattering. My beloved AA has crappy crappy numbers domestically. I would conclude that they arent cutting it the way they should in that area. Conversely DL has great numbers domestically. Im sure its all in the way they distribute their revenue, but these numbers arent completely meaningless reguardless of what you say. You also cant determine a carriers well being by them. Its a two way street.

Quoting Jetlanta (Reply 21):
But I don't make sh*t up.

No one accused you of that. I did say:

Quoting LAXdude1023 (Reply 10):
If these number dont hold valitity, then whats the point is even posting them in the first place? For that matter why not just make numbers up?

But no one accused you of lying or making stuff up.

Quoting SESGDL (Reply 20):
Conversely, AA has the lowest RASM of any of the network carriers. It's interesting to note that DL has the second highest RASM and is the only carrier profitable on its domestic network, which makes up a larger portion of DL's overall ASMs than international.

Indeed they do. AA's international network helps make up for domestic losses. It looks like DL is the other way around.

Quoting SESGDL (Reply 20):
Overall, US is a mess. They really need to get their house in order, they're unprofitable on every segment of their network.

Yes indeed. They need big changes if they are here for the long run.



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5372 posts, RR: 7
Reply 23, posted (5 years 7 months 1 week 13 hours ago) and read 3951 times:



Quoting LAXIntl (Reply 18):
Delta
Operating Revenue Per ASM:19.16
Operating Expense Per ASM:18.35
Profit/Loss per ASM:+0.81
Yield per RPM(cents):13.14

Any thoughts why the spread between RASM and Yield is so much higher than it is at other airlines?

Quoting Jetlanta (Reply 21):
Non-passenger revenue is a fraction of U.S. airlines' business and earnings from those units have an almost inconsequential impact on the bottom line.

Once true, but not any more. In DL's third quarter, cargo revs were $162 million and "other" revenues were $579 million; combined they were about 13% of the total. "Other" includes baggage handling fees, maintenance for other airlines, and FF revenues, all quite profitable.



I love long German words like 'Freundschaftsbezeigungen'.
User currently offlineUnited1 From United States of America, joined Oct 2003, 5930 posts, RR: 9
Reply 24, posted (5 years 7 months 1 week 13 hours ago) and read 3936 times:



Quoting Jetlanta (Reply 15):
DAL: Net -$26M, Excluding Hedge Losses +363M

NWA+DAL: Net -$343M, Excluding Hedge Losses +456M

Those are not DLs results for 3rd quarter 2008.

Net -$26M (Excluding Specials)
Net -$50M
Operating was +$131M


I think your getting the +363M from Q3 2007 numbers, AFAIK DL did not take heding losses last quarter because their hedges were not under water at that point.

http://news.delta.com/article_text/prelease3q08.pdf



Semper Fi - PowerPoint makes us stupid.
25 Jetlanta : I never said they were meaningless. What I WAS saying is that you can't jump to the conclusions that were being made on this board from those numbers
26 LAXintl : The industry trend, and one recommend by IATA as a best practice is to use the mileage square root method where indeed shorter segments see higher re
27 Jetlanta : That is well and good, but that isn't how all U.S. carriers do it. And I don't expect it ever will be. Plus, some carriers, like Delta, that connect
28 MasseyBrown : As you and others (including myself, now and then) have said, the allocation process is art not science, but I still don't think cargo and ancillary
29 LAXintl : Absolutely. Since we keep talking about Delta - in Q3 the carrier had $4.9Bil of consolidated passenger revenues. In addition it booked earnings from
30 Jetlanta : But we are still talking about REVENUE. Let's just assume that on a fully-allocated basis, those activities generate a 10% margin. We are talking abo
31 EXAAUADL : sorry I dont agree. DL has rapidly grown internationally which is probably better than 10 daily 763s ATL-TPA but it will also drive down internationa
32 EXAAUADL : [ I an tell you for a fact if in a board meeting the VP of Europe said "My entity isnt profitable but it supports domestic which is profitable, so my
33 MOBflyer : They are very good for tracking segment performance of the same airline over an interval. It really does. For network carriers, the unit revenue incr
34 MasseyBrown : I don't think that's a good assumption. From what I know of non-transportation product pricing, a product or service with only a 10% profit potential
35 Jetlanta : As a matter of fact, I have. And perhaps I didn't make the point as well as I could have. Of course they want all entities to be profitable. The poin
36 LAXintl : OK, lets talk about profitability. To protect the innocent I'll give you a real example for a foreign carrier I've been doing some work for. For the f
37 WorldTraveler : AA's productivity is one of the lowest in the industry... that is the largest driver of AA's sub-par results. Further, in many respects, defined pens
38 LAXdude1023 : These numbers posted are anything but sub par for AA. AA does have sub par domestic numbers. So that DL looks good and everyone else looks bad in com
39 SESGDL : AA was only profitable on its Latin American system, they were unprofitable on their Atlantic, Pacific, and Domestic network, that is indeed sub-par.
40 LAXdude1023 : Re read LAXIntl's correction: Not to mention their Pacifc network's loss was miniscule. When you combine their international network as a whole, it w
41 Panamair : Again, my point was that this is not apples-to-apples across all the reporting carriers. Par = average and if you're gauging AA's supposed 'sub-par'
42 WorldTraveler : once again, the issue with DOT data is it gives the government what it requires but doesn't tell any meaningful information because the data can be ma
43 AirNZ : Do you mean 'understood' as in the definition of the word, or as a way to use/deny/manipulate as it suits one's particular purpose at any given momen
44 WorldTraveler : no one who supports DL on this website has ever asked for someone to not speak about any facts that exist. We don't need to. DL has by far done a bet
45 Jetlanta : I really hate that this thread became another argument. My original comments perhaps didn't make the point I wanted to really make. Of course I agree
46 LAXintl : Because I suppose with the increased focus US carriers have shown towards international ops the last few years, I get repeated request from a.net mem
47 Jetlanta : I personally like the fact that you post it. It's the typical responses to it that aggravate me. I'm not sure there is anyway around it, since most p
48 LAXdude1023 : That is very true. Ive always thought of these data as "pieces" of a much larger puzzle. I agree that you cant look at just one set of data and make
49 DFWEagle : Just curious, but who exactly are you referring with that comment? It’s perfectly fine if you think the regional Form 41 data is meaningless, or th
50 Jetlanta : Yeah, my frustration is that not everyone understands that. I'm not going to name specific people, sorry. Again, I am not saying the data is meaningl
51 WorldTraveler : But every carrier - including CO which is still the most int'l US carrier based on revenue distribution - still gets at least half of its revenue fro
52 LAXintl : How about the cost of providing such non-transportation revenues? Having only the revenue does not do much, when you have no idea what the cost of ac
53 DeltaL1011man : I'm going to stay out of this pointless pissing match but KW has not been dropped. It is still very much in the system (i will say Y loads are Great C
54 MOBflyer : I only included operating revenue, which is largely comprised of cargo after (of course) passenger revenue. For most carriers, cargo costs that could
55 EXAAUADL : If their Atlantic/Asia numbers look good there is no other conclusion Well, it came across as entities profitability doesnt matter. And yes entities
56 OA412 : Huh? How in the world do you come to that conclusion. Just because the numbers show profitalbility on Atlantic or the Pacific does not ipso facto mea
57 WorldTraveler : since DL consistently shows its domestic system being much more profitable than its int'l entities and CO shows just the opposite, you can only come
58 MasseyBrown : True. Here is the revenue split for Q3, 2008. Numbers in millions; "Pax" includes regional. Airline...Pax Rev...Cargo...Other AA...5614...230...577 C
59 LAXintl : But the folks here do care, and are interested to see how airline routes perform. This threads is meant solely to show how airlines do in the air-tra
60 WorldTraveler : of course people want to know how routes perform but you can't know that.... even the entity data is a guess at best. Massey-Brown's post right above
61 FlyPNS1 : Actually you can come to a third conclusion. CO makes money on the international side, but needs the domestic feed to support the international flyin
62 BriGuyinHou : I totally agree with this statement. We keep reading in the business sections of newspapers across the US about how firms are collapsing or in financ
63 Jetlanta : This is very well-said. Which is yet another reason that these numbers, while interesting, should not lead to some of the conclusions reached on here
64 WorldTraveler : but domestic is 50% of CO's revenue. There is no company that would continue to maintain one side of the company if it continued to lose money at the
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