FlyBoeing From United States of America, joined May 2000, 866 posts, RR: 2 Posted (12 years 1 month 2 weeks 1 day 9 hours ago) and read 1244 times:
In today's USA TODAY there are a couple of interesting articles on the airline industry. One of them has to do with the required load factors neccesary to break even for various airlines based on reduced airfares, fewer passengers, and schedule cutbacks:
United Airlines has gone certifiably insane when they have that kind of cost structure where they have to have their planes almost 25% more full than CO's aircraft in order to break even. It's pretty bad for NW too since they have fuel-inefficient airplanes which they HAVEN'T replaced even though interest rates are headed downward.
I'm a CO/WN fan and I'm even more of one now. A typical required load factor is, what, 70%? CO only increased their required load factors by 10% on top of that and it's easy to cut costs by parking the fleet.
UA is up shit's creek. They need every plane full all the time to make money.
But here's another thing from the same USA TODAY about WN. "If an airline such as Southwest tacked on 15 minutes to the time each plane spent on the ground, then it would need 100 additional planes to meet its daily schedule"
Security procedures are going to kill the high frequency flights, it seems. Maybe WN isn't as immune to this crisis as it seems...
FlyBoeing From United States of America, joined May 2000, 866 posts, RR: 2 Reply 2, posted (12 years 1 month 2 weeks 1 day 7 hours ago) and read 1130 times:
I did some thinking about it and realized that WN will probably be hit quite a bit harder given the new security procedures. Since they require that you recheck your own luggage each time with new security. (which adds time to the hub traffic) and they don't operate from the airports close to the cities, they're kinda in the hole here. They'll have to offer even more significant discounts now that the costs associated with traveling WN are higher. But WN's costs are higher too, so...
On the other hand, though, WN has a less risky system given that they have fewer cyclical passengers. You don't lose high-fare passengers in this situation.
AeroArgentina From United Kingdom, joined May 2001, 192 posts, RR: 2 Reply 3, posted (12 years 1 month 2 weeks 1 day 5 hours ago) and read 1094 times:
I think all airlines will be hit hard. WN is also being hit hard, it just has an excellent corporate structure that will allow it to weather the storm much better than the rest (with the exception of CO which is almost as healthy as WN). WN is the only major airline in the US that has not laid anyone off. That speaks volumes and their employees will surely remember this when the time comes.
LoneStarMike From United States of America, joined Jul 2000, 3766 posts, RR: 36 Reply 8, posted (12 years 1 month 2 weeks 1 day 2 hours ago) and read 1029 times:
Here's another set of statistics regarding stock prices of most of the major carriers.The first price listed is what each airline closed at on 09/10/2001. The second price is what each airline's stock closed at on 09/17/2001, the first day that the stock market re-opened. The third price is what each airline closed at today.
AirTran 09/10/2001 closed at $6.00 per share 09/17/2001 closed at $3.62 per share 11/06/2001 closed at $5.05 per share
Alaska 09/10/2001 closed at $30.65 per share 09/17/2001 closed at $21.68 per share 11/06/2001 closed at $25.35 per share
America West 09/10/2001 closed at $8.60 per share 09/17/2001 closed at $3.00 per share 11/06/2001 closed at $1.85 per share
American 09/10/2001 closed at $29.70 per share 09/17/2001 closed at $18.00 per share 11/06/2001 closed at $18.36 per share
Continental 09/10/2001 closed at $39.64 per share 09/17/2001 closed at $17.72 per share 11/06/2001 closed at $17.85 per share
Delta 09/10/2001 closed at $37.25 per share 09/17/2001 closed at $20.64 per share 11/06/2001 closed at $24.20 per share
Northwest 09/10/2001 closed at $19.62 per share 09/17/2001 closed at $12.42 per share 11/06/2001 closed at $13.27 per share
United 09/10/2001 closed at $30.82 per share 09/17/2001 closed at $17.50 per share 11/06/2001 closed at $11.13 per share
US Airways 09/10/2001 closed at $11.62 per share 09/17/2001 closed at $5.57 per share 11/06/2001 closed at $4.79 per share
Southwest 09/10/2001 closed at $17.12 per share 09/17/2001 closed at $13.00 per share 11/06/2001 closed at $17.22 per share.
As you can see, Southwest is the only airline whose stock price has fully recovered from the events of September 11. Now let's hope it stays that way.
Haveric From United States of America, joined Jan 2001, 1247 posts, RR: 4 Reply 9, posted (12 years 1 month 2 weeks 1 day 2 hours ago) and read 1015 times:
You're right LONESTAR -- let's hope that only WN regains stock value because who cares about any other airline? I mean, no one works for them. Everyone knows that WN is about to send 737s to HKG, so who cares is AA and UA crash and burn?
Be a little less myopic about that hick of an airline.
LoneStarMike From United States of America, joined Jul 2000, 3766 posts, RR: 36 Reply 10, posted (12 years 1 month 2 weeks 1 day 2 hours ago) and read 1009 times:
Haveric, I think you misunderstood my post. When I said "Now let's hope it stays that way", I meant I hoped that Southwest would be able to maintain it's share price. I was not implying that I hoped the other airlines did not recover. Sorry if I struck a nerve.
IMissPiedmont From United States of America, joined May 2001, 6246 posts, RR: 36 Reply 11, posted (12 years 1 month 2 weeks 1 day 1 hour ago) and read 997 times:
Look at the source. USA Today is hardly what I consider a good source of news. I'll bet they took selected flights and used those for their report. If these numbers are accurate, all but CO, AS and WN are doomed.
Is grammar no longer taught is schools? Saying "me and her" or some such implies illiteracy.
Tango-Bravo From United States of America, joined Jun 2001, 3777 posts, RR: 30 Reply 14, posted (12 years 1 month 2 weeks 21 hours ago) and read 953 times:
There is every reason to believe that the numbers are giving us a true picture of the load factors required, given today's yields, for the respective airlines to break even -- I work for one of these airlines and the numbers we hear from upper management agree, within a small "margin for error," with what we see in the USA Today article.
Keep in mind -- by the estimates of knowledgeable industry observers, 20% reductions in flights and employees typically saves only about 10% in overall costs.
Moreover, don't forget -- with the exception of Southwest, Continental and Alaska, all of the U.S. majors were losing money profusely before 9/11 in spite of reporting load factors in the 75% range. The reason: yields had declined sharply before 9/11; since then, yield has been in a freefall.