|Quoting AirlineAV8tor (Reply 20):|
When you cut flights, loads go up! : ) Besides that, they seem to be following in CO's footsteps by overbooking too.
overbooks, as any airline does, and is a practice especially evident in an environment where 80%+ load factors are a rule rather than an exception.
The difference is CO
is growing domestic ASMs yoy (5.8%), and achieving commensurate RPM growth (5.3%), whereas DL
is cutting domestic ASMs (7.3%) and seeing a slight RPM deficiency of .6%. Two cases in which capacity is being matched to demand...CO
sees a need to expand in markets to increase unit profitability, DL
is doing the same by shrinking. CO
's monthly load factor goes down while domestic revenue increases, DL
's load factor rises while domestic revenue goes south. Simple math.
The truth is, more people are flying. The industry is seeing overall 3-5% growth in passengers boarded, and CO
's numbers reflect this progress.
Of note is that Continental needs to add domestic capacity because demand is very strong, and their network is very lean in the first place, with minimal overcapacity. CO
's 2006 April domestic LF
was 85.9%, while 2007 was 85.5%, even still, borderline inefficient and reflective of a need to grow capacity. YTD growth vs. 2006 is essentially flat, indicative of that given the ASM increase. By contrast, DL
posted 77.2% load factors in 2006 and 82.8 for 2007 domestic. Given a hypothetical domestic breakeven LF
of 80%, which is fairly realistic in this day and age, this becomes another smart move for Delta.
|Quoting WorldTraveler (Reply 22):|
except that DL is adding - not cutting - capacity on their int'l system and their int'l performance is as strong as their domestic system.
I have to hand it to you, that's excellent spin, but I think you are wrong on your assessment that DL
's international performance is as strong as
their domestic results.
Delta grew their international network a whopping 17.1% yoy, but was exceeded by a 17.3% RPM increase. YTD numbers are even more impressive...23.7% RPM growth on 22.0% ASM increase. Pacific numbers are divergent, but this reflects DL
's lack of suitable equipment for a more extensive network.
To me, WorldTraveler, Delta's International performance is blowing Domestic out of the water right now, it is WAY stronger! True, the domestic market generates a greater portion of Delta's revenues, but margins are better internationally, and DL
is just following the money. International expansion is proving to be a very wise decision.