That is one approach...albeit the traditional one. Again, to solve the problem, you have to get out of the box.
You don't look at aircraft type. You look at the profitability of the hub. You breakdown the traffic at the hub, where it comes from, where it goes through, percentage local vs. through, then you determine each routes costs and unit revenue and determine if the mix of revenue local v. thru is a correct mix to make the flight profitable. If not, sometimes, by changing the mix, that will fix the problem. Sometimes, the route cannot be saved and you are better served allocating that aircraft somewhere else. In other words, it is not as simple as it looks. Also, and this is a big one, UA
will have to go to two aircraft types domestically. It can't make it with one...but it could make it with two. I have the two in mind (but I am holding them in my vest).
Looking at it from the outside, I do not have access to those numbers, I can work it only based on what information I can gather from public access to records, therefore, I have to work it a different way. Its still the same methodology, but in a macro sense, not broken down so much by hub.
I also have products to introduce that will cost money and rolling them out will call for reallocation of funds: closing some non performing routes, selling off aircraft, etc. One thing is very clear: I WILL NOT TAKE ONE MORE DIME THAN HAS ALREADY BEEN TAKEN FROM THE EMPLOYEE GROUPS AND IF AT ALL
POSSIBLE, I WILL FIND A WAY TO
RESTORE A LITTLE OF
WAS TAKEN AWAY, ONCE THE COMPANY IS
That is what I'm thinking.
Hope that answers your question.
David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998