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tphuang
Posts: 5297
Joined: Tue Mar 14, 2017 2:04 pm

Re: UA CLE LGA?

Wed Jan 22, 2020 2:47 am

EADSYABSOB73857 wrote:
tphuang wrote:
the margins at BOS is definitely currently lower than SEA. One could argue that's expected since they are at an earlier stage in the buildup. Either way, it's a huge bloodbath up there. RDU really has very low margins too.

People keep making DL out to be geniuses and everyone else out to be stupid. That's not the case, every airline has to build to its strength. UA doesn't need new hubs when it's existing hubs are all at great locations. They said it themselves in earning calls.


I haven’t been on this forum long, but I’ve consistently noticed that; while you post very valid data that gives much insight to route profits, you have a strong bias and continuously bash DL, more than anyone else. You tend to focus on one station (mostly BOS) and base your opinion of DL on that and for their actions in that market- I’ve followed your posts. The truth is; DL is the most profitable airline in the world (above AA, UA, AS, and B6- and there’s concrete data to back that up). And, data has shown that BOS has actually become more profitable for DL- which aligns with their goal from the onset. You like to focus on 5-6 regional markets out of BOS and state that BOS’ DL operation is ‘tanking’ from a profitability standpoint. Now I am agnostic; I’m actually a Wall Street industry analyst and you can see in my history I’ve written and defended other airlines (including B6).. but the fact of the matter is that: a) when any airline builds a new hub, they will take hits against their profitability for a multitude of reasons- most common historical reasons are they are either flooding a market in order to build their position, and/or other airlines are defending their share- every major US airline has been in this situation, I can pull industry data and show you if you’d like- it’s not only consistent with DL, BOS, and SEA..

One recent example- B6 BUF-BOS is down to 3x daily- 1 year ago it was 5-6x daily.. so yes, BOS-BUF may be one of DL’s worst performing routes, the point is, B6 has reduced flights (from 6 down to 5, then from 5 down to 3)- simple wisdom is that if BOS-BUF wasn’t so poor performing this would not be the case (a reduction in flights).. plain and simple. Looks like DL won the battle here and set out exactly what they were trying to achieve (cut into frequencies and reduce route frequencies from existing carriers/routes- plain and simple).


I am simply reporting on the numbers. I am also simply stating obvious point that delta is running a very low margin operation in Boston since it's at the beginning of a buildup. I have also looked at the numbers and have concluded that they have turned things around in NYC after many years of losses. I don't see why I would state the later if I am not basing things on numbers. So when delta turns Boston around in a way that's verifiable, I will admit to that. And it simply hasn't done that in Seattle either. I follow that market closely too. It's simply more interesting to look at competitive markets.

If delta won Boston buffalo, JetBlue would be out of that market. But it's simply running the same number of flights it runs in winter time due to the urgent need to deploy aircraft to JFK due to slot usage issues. It seems to me the corporate clients are looking for better schedule from JetBlue to larger markets and that's where they are adding to.

I don't see why I need to think delta knows everything or does everything better than everyone else when there are quite a few well run airlines around. And no, JetBlue is not one of them.

If you would like to continue this conversation, I would glad entertain it over pm.
 
MohawkWeekend
Posts: 271
Joined: Tue Jan 08, 2019 2:06 pm

Re: UA CLE LGA?

Wed Jan 22, 2020 2:54 am

To EADSYABSOB73857 - As an analyst, why do you think the Government allows this predatory behavior? And as you mentioned this is not the first time.
    300 319 320 321 707 717 720 727 72S 737 73S 734 735 73G 738 739 747 757 762 ARJ B11 C212 CRJ CR2 CR7 CR9 CV5 D8S DC9 D9S D94 D95 D10 DH8 DTO EMB EM2 E135 E145 E190 FH7 F28 F100 FTRIMTR HRN L10 L15 M80 M90 SF3 SWM YS11
     
    SFOtoORD
    Posts: 1216
    Joined: Tue Jul 03, 2007 2:26 am

    Re: UA CLE LGA?

    Wed Jan 22, 2020 3:33 am

    EADSYABSOB73857 wrote:
    tphuang wrote:
    the margins at BOS is definitely currently lower than SEA. One could argue that's expected since they are at an earlier stage in the buildup. Either way, it's a huge bloodbath up there. RDU really has very low margins too.

    People keep making DL out to be geniuses and everyone else out to be stupid. That's not the case, every airline has to build to its strength. UA doesn't need new hubs when it's existing hubs are all at great locations. They said it themselves in earning calls.


    I haven’t been on this forum long, but I’ve consistently noticed that; while you post very valid data that gives much insight to route profits, you have a strong bias and continuously bash DL, more than anyone else. You tend to focus on one station (mostly BOS) and base your opinion of DL on that and for their actions in that market- I’ve followed your posts. The truth is; DL is the most profitable airline in the world (above AA, UA, AS, and B6- and there’s concrete data to back that up). And, data has shown that BOS has actually become more profitable for DL- which aligns with their goal from the onset. You like to focus on 5-6 regional markets out of BOS and state that BOS’ DL operation is ‘tanking’ from a profitability standpoint. Now I am agnostic; I’m actually a Wall Street industry analyst and you can see in my history I’ve written and defended other airlines (including B6).. but the fact of the matter is that: a) when any airline builds a new hub, they will take hits against their profitability for a multitude of reasons- most common historical reasons are they are either flooding a market in order to build their position, and/or other airlines are defending their share- every major US airline has been in this situation, I can pull industry data and show you if you’d like- it’s not only consistent with DL, BOS, and SEA..

    One recent example- B6 BUF-BOS is down to 3x daily- 1 year ago it was 5-6x daily.. so yes, BOS-BUF may be one of DL’s worst performing routes, the point is, B6 has reduced flights (from 6 down to 5, then from 5 down to 3)- simple wisdom is that if BOS-BUF wasn’t so poor performing this would not be the case (a reduction in flights).. plain and simple. Looks like DL won the battle here and set out exactly what they were trying to achieve (cut into frequencies and reduce route frequencies from existing carriers/routes- plain and simple).


    If I summarize your post, you admit the data is valid, think the person posting the very factual data is biased, delta is the most profitable airline and ipso facto the data is really not valid? I don’t think any posters here claimed there wasn’t a valid reason to lose money on a route. Much ado about nothing.
     
    dstblj52
    Posts: 497
    Joined: Tue Nov 19, 2019 8:38 pm

    Re: UA CLE LGA?

    Wed Jan 22, 2020 4:22 am

    MohawkWeekend wrote:
    To EADSYABSOB73857 - As an analyst, why do you think the Government allows this predatory behavior? And as you mentioned this is not the first time.

    How would you block it, it's necessary to allow airlines to compete and sometimes that competition involves trying to take route dominance from other carriers, no different from when the ULCC started doing 49 dollar NYC MCO returns.
     
    N649DL
    Posts: 987
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    Re: UA CLE LGA?

    Wed Jan 22, 2020 8:09 am

    STT757 wrote:
    tphuang wrote:
    N649DL wrote:

    Aside SEA, this I actually doubt. DL has grown very conservatively and maturely at RDU is being really smart about BOS by having feed to it's secondary TATL hub. This was actually a goal for them back when they opened the BOS terminal but plans got shelved IIRC because they just out of BK and merging with NW and didn't take the risk. They focused on NYC instead back in the day.

    Now for these so-called "Focus Cities" that don't exist on DL yet such as SJC and AUS (where they have a much lower presence), those could be a huge bloodbath for them. Probably why they held off on expanding them after the Press Release.

    the margins at BOS is definitely currently lower than SEA. One could argue that's expected since they are at an earlier stage in the buildup. Either way, it's a huge bloodbath up there. RDU really has very low margins too.

    People keep making DL out to be geniuses and everyone else out to be stupid. That's not the case, every airline has to build to its strength. UA doesn't need new hubs when it's existing hubs are all at great locations. They said it themselves in earning calls.


    I wonder if Denver’s remarkable growth, especially the United hub, is going to have a negative impact on DL’s Salt Lake City hub. I know they’re investing in new facilities there, but the growth factor of Denver has to be be of concern to DL.

    Might they need to start putting some investments of more flying into SLC and away from SEA? Especially in light of DL’s continues sub par performance in Asia post Narita closure and Korean air venture.


    Sent from my iPhone using Tapatalk Pro


    UA needs to watch out for a tank in Denver's local economy even compared to the rest of the country. As someone who's lived there, all the real estate numbers extremely inflated and UA capped out on this hub way later than it should've. People have extra spending money out there at the moment and UA is likely bottom feeding on fares against F9 and WN to stay afloat (somewhat) and once the local economy dips, it's going to be dire out there (see DEN's economy in the early 1990s and early 2000s.)

    DL on the other hand is tapping into overall market share at SLC. Yes UA has grown at DEN significantly, but the competition is right in their backyard and DL has effectively ran a lot of it out at SLC.
     
    fun2fly
    Posts: 1613
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    Re: UA CLE LGA?

    Fri Jan 24, 2020 7:45 pm

    N649DL wrote:
    STT757 wrote:

    I wonder if Denver’s remarkable growth, especially the United hub, is going to have a negative impact on DL’s Salt Lake City hub. I know they’re investing in new facilities there, but the growth factor of Denver has to be be of concern to DL.

    Might they need to start putting some investments of more flying into SLC and away from SEA? Especially in light of DL’s continues sub par performance in Asia post Narita closure and Korean air venture.


    Sent from my iPhone using Tapatalk Pro


    UA needs to watch out for a tank in Denver's local economy even compared to the rest of the country. As someone who's lived there, all the real estate numbers extremely inflated and UA capped out on this hub way later than it should've. People have extra spending money out there at the moment and UA is likely bottom feeding on fares against F9 and WN to stay afloat (somewhat) and once the local economy dips, it's going to be dire out there (see DEN's economy in the early 1990s and early 2000s.)

    DL on the other hand is tapping into overall market share at SLC. Yes UA has grown at DEN significantly, but the competition is right in their backyard and DL has effectively ran a lot of it out at SLC.


    What does this have to do with CLE>LGA? And the next post too about dog carriers. Come on members, let's not ruin another thread.
     
    chidino
    Posts: 212
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    Re: UA CLE LGA?

    Fri Jan 24, 2020 8:31 pm

    avtcle wrote:
    Geez idk why this forum was created considering this was discussed in the CLE forum and United network forum but it’s just turned into an all out war on Cleveland. Idk what some here are following but Cleveland’s economic situation (which is nowhere near as bad as some suggest) is obviously not effecting air travel in CLE. 2019 traffic is projected 5% growth with over 10,000,000 passengers. More than CMH, PIT, IND, CVG.


    None of which are hubs. CLE is simply adjusting to the world with four megacarriers. It'll be fine. But a.net members talking about hubbing operations there -- yo, don't bogart what you're smoking.
     
    dstblj52
    Posts: 497
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    Re: UA CLE LGA?

    Fri Jan 24, 2020 10:11 pm

    Look is anyone surprised? Point to Point flying is tough in best of markets and its near impossible to do flying into a rivals hub meaning they likely offer bigger planes with better amenities because they are not just flying O&D traffic but connecting traffic. You would have to be a real united loyalist to fly a crj200 at a less convenient schedule then what American or Delta are offering
     
    greenair727
    Posts: 1467
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    Re: UA CLE LGA?

    Sat Jan 25, 2020 5:08 pm

    Actually, I'd rather CAK not lose their DCA/LGA flights on AA to CLE as those still serve the metro Cleveland market if CLE can replace the lost UA capacity from elsewhere. I just realized Columbus has 6 flights each on DL and AA to LGA and AA has 5 daily to DCA. Some of those should be shifted to Cleveland to replace the lost UA service.
     
    dstblj52
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    Re: UA CLE LGA?

    Sun May 10, 2020 1:20 am

    MohawkWeekend wrote:
    2nd Question for Midwestindy - In your estimation, how much revenue would a flight need to have to cover direct and indirect costs to breakeven? Using the DCA - CLE example a flight run by Republic on a 170 with 70 seats. About 1 hour block time. Thanks!

    Sorry for necrowing this thread but I can give you a rough answer a large RJ cost ~1,400 dollar an hour to operate, which is why they are so much more attractive than small rj's who cost ~1,300 dollars an hour but have 50% less available seats and earning capacity. All data from 2017 haven't been able to find any newer data.
     
    greenair727
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    Re: UA CLE LGA?

    Sun May 10, 2020 4:20 am

    dstblj52 wrote:
    MohawkWeekend wrote:
    2nd Question for Midwestindy - In your estimation, how much revenue would a flight need to have to cover direct and indirect costs to breakeven? Using the DCA - CLE example a flight run by Republic on a 170 with 70 seats. About 1 hour block time. Thanks!

    Sorry for necrowing this thread but I can give you a rough answer a large RJ cost ~1,400 dollar an hour to operate, which is why they are so much more attractive than small rj's who cost ~1,300 dollars an hour but have 50% less available seats and earning capacity. All data from 2017 haven't been able to find any newer data.



    $1400 -- that's all? Including fuel, aircraft wear and tear, cleaning, pilots, and flight attendants? That seems pretty cheap, no?
     
    dstblj52
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    Re: UA CLE LGA?

    Sun May 10, 2020 6:13 am

    greenair727 wrote:
    dstblj52 wrote:
    MohawkWeekend wrote:
    2nd Question for Midwestindy - In your estimation, how much revenue would a flight need to have to cover direct and indirect costs to breakeven? Using the DCA - CLE example a flight run by Republic on a 170 with 70 seats. About 1 hour block time. Thanks!

    Sorry for necrowing this thread but I can give you a rough answer a large RJ cost ~1,400 dollar an hour to operate, which is why they are so much more attractive than small rj's who cost ~1,300 dollars an hour but have 50% less available seats and earning capacity. All data from 2017 haven't been able to find any newer data.



    $1400 -- that's all? Including fuel, aircraft wear and tear, cleaning, pilots, and flight attendants? That seems pretty cheap, no?

    Thats the average cost per hour of large RJ operation nationwide in 2017, it's likely gone up since then but I can't find any newer DOT data, I would guess anything touching NYC would have some higher costs in terms of local pay, hotels, and landing fees, but that was the national average cost
     
    N649DL
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    Re: UA CLE LGA?

    Sun May 10, 2020 7:31 am

    Cointrin330 wrote:
    UA has the most subpar product on LGA-CLE and has for years compared to DL and AA. Aside from one E175 it is usually E145s and they are shabby inside and uncomfortable with zero amenities. Back in the 1990s and early 2000s, CO was flying everything from MD80s, 731s, 733s, 735s, 737-700s, 738s, and occasionally, post merger, an A319/320. I don't see UA axing LGA-CLE until they figure out what to do with the slots.


    When UA and CO merged and started cross fleeting, IIRC LGA-CLE was a 757 at one point. Maybe I'm thinking of EWR-CLE.
     
    Cointrin330
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    Re: UA CLE LGA?

    Sun May 10, 2020 12:32 pm

    N649DL wrote:
    Cointrin330 wrote:
    UA has the most subpar product on LGA-CLE and has for years compared to DL and AA. Aside from one E175 it is usually E145s and they are shabby inside and uncomfortable with zero amenities. Back in the 1990s and early 2000s, CO was flying everything from MD80s, 731s, 733s, 735s, 737-700s, 738s, and occasionally, post merger, an A319/320. I don't see UA axing LGA-CLE until they figure out what to do with the slots.


    When UA and CO merged and started cross fleeting, IIRC LGA-CLE was a 757 at one point. Maybe I'm thinking of EWR-CLE.


    A 757 on LGA-CLE was likely a sub and maybe a short-lived operation (the merged UA/CO did use some 757's out of CLE post merger) but LGA to CLE was mostly ERJ-145's and a couple of E-170's. Out of EWR, from what I recall, it was (post-merger) mostly mainline, and mainly 737-700s, -800s, the occasional -900) and some A320s as well, with some Express equipment also used outside of peak times.

    I was wrong on believing UA would not cut LGA-CLE before they figured out what to do with the slots, but since the route was planned to end in late March, it's a moot point now given the massive cuts to NY area airports in light of COVID which accelerated in early April.
     
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    jfklganyc
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    Re: UA CLE LGA?

    Sun May 10, 2020 1:33 pm

    Could we see UA leave LGA altogether? Or downsize to just ORD?

    All possible now
     
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    STT757
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    Re: UA CLE LGA?

    Sun May 10, 2020 1:38 pm

    They just recently brought back LGA-IAD, so no.
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    Nicknuzzii
    Posts: 1215
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    Re: UA CLE LGA?

    Sun May 10, 2020 1:42 pm

    jfklganyc wrote:
    Could we see UA leave LGA altogether? Or downsize to just ORD?

    All possible now


    Very possible. But I think after seeing all the regret when dropping JFK I don’t think it will happen. We don’t need anymore UA at EWR lol.
     
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    jfklganyc
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    Re: UA CLE LGA?

    Sun May 10, 2020 1:51 pm

    STT757 wrote:
    They just recently brought back LGA-IAD, so no.



    Doesnt mean much in an airline shrinking by 30 percent.
     
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    Midwestindy
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    Re: UA CLE LGA?

    Sun May 10, 2020 2:54 pm

    greenair727 wrote:
    dstblj52 wrote:
    MohawkWeekend wrote:
    2nd Question for Midwestindy - In your estimation, how much revenue would a flight need to have to cover direct and indirect costs to breakeven? Using the DCA - CLE example a flight run by Republic on a 170 with 70 seats. About 1 hour block time. Thanks!

    Sorry for necrowing this thread but I can give you a rough answer a large RJ cost ~1,400 dollar an hour to operate, which is why they are so much more attractive than small rj's who cost ~1,300 dollars an hour but have 50% less available seats and earning capacity. All data from 2017 haven't been able to find any newer data.



    $1400 -- that's all? Including fuel, aircraft wear and tear, cleaning, pilots, and flight attendants? That seems pretty cheap, no?


    It's significantly higher than that, although I don't want to give out the exact number.

    A $1400/hour flight would mean, on a 1hr 76 seat RJ flight, you would only need to fill 80% of the seats with $23 fares to break even.

    Nicknuzzii wrote:
    jfklganyc wrote:
    Could we see UA leave LGA altogether? Or downsize to just ORD?

    All possible now


    Very possible. But I think after seeing all the regret when dropping JFK I don’t think it will happen. We don’t need anymore UA at EWR lol.


    As you know LGA is slot-controlled, and as we saw earlier in the pandemic, airlines are willing to endure significant losses to protect their valuable slot holdings because once you sell your slots its hard to get them back.

    IMO, the only reasons to give up slots right now is:
    a)You desperately need the cash from the slot sale to fund your operations
    b)You can find a buyer willing to pay a good rate for the slots (highly unlikely in this environment)
    c)You don't think travel will return to previous levels anytime soon

    If UA were to sell their slots right now, and travel were to return within 80-90% of previous levels in the next couple years, UA looks kind of dumb.

    Also I believe UA has used some of their slots as collateral for some of their debt they have issued, so I don't know if they would even be allowed to sell.
    Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
     
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    jetblastdubai
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    Re: UA CLE LGA?

    Sun May 10, 2020 3:19 pm

    Midwestindy wrote:

    If UA were to sell their slots right now, and travel were to return within 80-90% of previous levels in the next couple years, UA looks kind of dumb.

    Also I believe UA has used some of their slots as collateral for some of their debt they have issued, so I don't know if they would even be allowed to sell.


    I doubt that UA (or anyone) will be shedding valuable slots at LGA or DCA. They're just too important to any airline's route structure. I actually see UA trying to acquire some JFK slots before all the fallout is over as international traffic will be much slower to recover and UA has indicated that they'd like to get back into the domestic market from JFK.

    If we're to believe the comments being tossed around here lately, AA won't be using a fair number of their existing JFK slots in the future.
     
    tphuang
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    Re: UA CLE LGA?

    Sun May 10, 2020 5:14 pm

    jetblastdubai wrote:
    Midwestindy wrote:

    If UA were to sell their slots right now, and travel were to return within 80-90% of previous levels in the next couple years, UA looks kind of dumb.

    Also I believe UA has used some of their slots as collateral for some of their debt they have issued, so I don't know if they would even be allowed to sell.


    I doubt that UA (or anyone) will be shedding valuable slots at LGA or DCA. They're just too important to any airline's route structure. I actually see UA trying to acquire some JFK slots before all the fallout is over as international traffic will be much slower to recover and UA has indicated that they'd like to get back into the domestic market from JFK.

    If we're to believe the comments being tossed around here lately, AA won't be using a fair number of their existing JFK slots in the future.


    You are still acting like this is 2019. These 5 CLE slots will get traded/sold/leased at some point. They simply have no use for it elsewhere. The question is if they are willing to give up more slots than that. I think trade/lease are both more likely than sell.

    Keep in mind this is an airline that is trying very hard to not end up in chapter 11 and needs to shrink by at least 30%. Now, think about what kind of aircraft they are using for many of the flights out of LGA and try to take 1/3 capacity out of that. Can they maintain the same level of frequency when they are trying to retire the 50 seaters? If they can't, what do they do here?

    If you are UA, do you try to consolidate at EWR and make sure NK/B6 do not expand there or do you continue trying to keep a healthy presence at LGA? I wouldn't be surprised if they end up giving up more than just the CLE slots.

    At this current climate, UA is not going into JFK unless it has a partnership with B6. Going into JFK with reduced demand, no feed and no good facility is a great way to blow through cash.

    On top of that, AA is going to downsize signficantly at LGA also and they are flying a lot 44 and 50 seaters right now. And they have told their employees that these aircraft are no economical at LGA. So if your AA and has to shrink your network by 35% and NYC is your least or second least profitable hub, how do you not shrink NYC if you are struggling to stay away from the courts? And if LGA is shrinking by even 30% and are already using the smallest aircraft, how do they not cut flights?
     
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    Midwestindy
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    Re: UA CLE LGA?

    Sun May 10, 2020 6:13 pm

    tphuang wrote:
    jetblastdubai wrote:
    Midwestindy wrote:

    If UA were to sell their slots right now, and travel were to return within 80-90% of previous levels in the next couple years, UA looks kind of dumb.

    Also I believe UA has used some of their slots as collateral for some of their debt they have issued, so I don't know if they would even be allowed to sell.


    I doubt that UA (or anyone) will be shedding valuable slots at LGA or DCA. They're just too important to any airline's route structure. I actually see UA trying to acquire some JFK slots before all the fallout is over as international traffic will be much slower to recover and UA has indicated that they'd like to get back into the domestic market from JFK.

    If we're to believe the comments being tossed around here lately, AA won't be using a fair number of their existing JFK slots in the future.


    You are still acting like this is 2019. These 5 CLE slots will get traded/sold/leased at some point. They simply have no use for it elsewhere. The question is if they are willing to give up more slots than that. I think trade/lease are both more likely than sell.

    Keep in mind this is an airline that is trying very hard to not end up in chapter 11 and needs to shrink by at least 30%. Now, think about what kind of aircraft they are using for many of the flights out of LGA and try to take 1/3 capacity out of that. Can they maintain the same level of frequency when they are trying to retire the 50 seaters? If they can't, what do they do here?

    If you are UA, do you try to consolidate at EWR and make sure NK/B6 do not expand there or do you continue trying to keep a healthy presence at LGA? I wouldn't be surprised if they end up giving up more than just the CLE slots.

    At this current climate, UA is not going into JFK unless it has a partnership with B6. Going into JFK with reduced demand, no feed and no good facility is a great way to blow through cash.

    On top of that, AA is going to downsize signficantly at LGA also and they are flying a lot 44 and 50 seaters right now. And they have told their employees that these aircraft are no economical at LGA. So if your AA and has to shrink your network by 35% and NYC is your least or second least profitable hub, how do you not shrink NYC if you are struggling to stay away from the courts? And if LGA is shrinking by even 30% and are already using the smallest aircraft, how do they not cut flights?


    Leasing is completely different than completely exiting, which was what was being discussed. Besides, who is going to be leasing slots right now? And if you are UA why would you lease out your slots right now, when you are going to get pennies on the dollar than if you lease from a year or two from now.

    Regardless of demand fluctuations, airlines are all likely going to be keeping their slot holdings for the foreseeable future as they can use the slots as collateral for loans.

    UA hardly had any 50 seaters from LGA other than CLE which is now gone, and AA had been removing 44/50 seaters from LGA starting in Q1 this year

    You can protect the financial health of your company without giving up some of your most important assets
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    jetblastdubai
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    Re: UA CLE LGA?

    Sun May 10, 2020 7:46 pm

    tphuang wrote:

    You are still acting like this is 2019. These 5 CLE slots will get traded/sold/leased at some point. They simply have no use for it elsewhere. The question is if they are willing to give up more slots than that. I think trade/lease are both more likely than sell.


    I'm actually looking ahead to 2022 and beyond. The hysteria of the past few months will eventually blow over and the industry will bounce back although probably never as big as it was in 2019. LGA has always been brutally competitive and business-oriented airlines will always want those slots available down the road. I just don't see those slots being bargained away for anything. They can shed assets they can replace later on if necessary....once a LGA slot is gone, it might be gone for decades.
     
    tphuang
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    Re: UA CLE LGA?

    Sun May 10, 2020 7:49 pm

    Midwestindy wrote:

    Leasing is completely different than completely exiting, which was what was being discussed. Besides, who is going to be leasing slots right now? And if you are UA why would you lease out your slots right now, when you are going to get pennies on the dollar than if you lease from a year or two from now.

    Regardless of demand fluctuations, airlines are all likely going to be keeping their slot holdings for the foreseeable future as they can use the slots as collateral for loans.

    UA hardly had any 50 seaters from LGA other than CLE which is now gone, and AA had been removing 44/50 seaters from LGA starting in Q1 this year

    You can protect the financial health of your company without giving up some of your most important assets


    They clearly don't need to lease right now, since there is a waiver right now. So it will be for when slot waivers end next year. WN/B6/NK would all be willing to lease LGA slots for next year. Guaranteed.

    My point is that if they are flying 70/76 seatersand 50 seaters are gone and they need reduce capacity by 30%, what can they do other than reducing flights?

    I actually don't think UA will have that many slots to trade/lease, but there will be a few. UA's first and foremost task is ensure its dominance at EWR.

    The bigger question is what kind of flying capacity AA can maintain after the slot waiver is over. It clearly has already given up on using its JFK slots. i'd say at this point that its LGA flying will be dramatically reduced also. AA simply cannot protect its financial health unless there is a sharp recovery.

    Even if it can avoid chapter 11, how do you think AA can run enough of a margin (in a weakened demand environment) to pay off the interest on its loans without cutting back on its worst performing stations? If demand is down 25% in business markets for the next couple of years due to COVID and financial downturn and AA is finding that 44/50 seaters are too uneconomical, how does it upgauge in that scenario?
     
    tphuang
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    Re: UA CLE LGA?

    Sun May 10, 2020 7:50 pm

    jetblastdubai wrote:
    tphuang wrote:

    You are still acting like this is 2019. These 5 CLE slots will get traded/sold/leased at some point. They simply have no use for it elsewhere. The question is if they are willing to give up more slots than that. I think trade/lease are both more likely than sell.


    I'm actually looking ahead to 2022 and beyond. The hysteria of the past few months will eventually blow over and the industry will bounce back although probably never as big as it was in 2019. LGA has always been brutally competitive and business-oriented airlines will always want those slots available down the road. I just don't see those slots being bargained away for anything. They can shed assets they can replace later on if necessary....once a LGA slot is gone, it might be gone for decades.


    AA won't have a choice. They don't have cash to keep LGA going. Let's say they are 30% smaller (which is probably a low estimate) for next summer, they'd need to probably cut a good chunk of its worst performing routes. Where do you think these flying are at?

    As for UA, they have been the most aggressive at cutting to avoid chapter 11. It's not a secret UA management sees that it will be a lot smaller coming out of this. How much of a presence does it need at LGA if it continues to dominate at EWR?
     
    dstblj52
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    Re: UA CLE LGA?

    Sun May 10, 2020 8:13 pm

    Midwestindy wrote:
    greenair727 wrote:
    dstblj52 wrote:
    Sorry for necrowing this thread but I can give you a rough answer a large RJ cost ~1,400 dollar an hour to operate, which is why they are so much more attractive than small rj's who cost ~1,300 dollars an hour but have 50% less available seats and earning capacity. All data from 2017 haven't been able to find any newer data.



    $1400 -- that's all? Including fuel, aircraft wear and tear, cleaning, pilots, and flight attendants? That seems pretty cheap, no?


    It's significantly higher than that, although I don't want to give out the exact number.

    A $1400/hour flight would mean, on a 1hr 76 seat RJ flight, you would only need to fill 80% of the seats with $23 fares to break even.

    Nicknuzzii wrote:
    jfklganyc wrote:
    Could we see UA leave LGA altogether? Or downsize to just ORD?

    All possible now


    Very possible. But I think after seeing all the regret when dropping JFK I don’t think it will happen. We don’t need anymore UA at EWR lol.


    As you know LGA is slot-controlled, and as we saw earlier in the pandemic, airlines are willing to endure significant losses to protect their valuable slot holdings because once you sell your slots its hard to get them back.

    IMO, the only reasons to give up slots right now is:
    a)You desperately need the cash from the slot sale to fund your operations
    b)You can find a buyer willing to pay a good rate for the slots (highly unlikely in this environment)
    c)You don't think travel will return to previous levels anytime soon

    If UA were to sell their slots right now, and travel were to return within 80-90% of previous levels in the next couple years, UA looks kind of dumb.

    Also I believe UA has used some of their slots as collateral for some of their debt they have issued, so I don't know if they would even be allowed to sell.

    https://www.faa.gov/regulations_policie ... -costs.pdf
    2013 but cost per operation block hour of RJ with more then 60 seats 1,424
     
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    Midwestindy
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    Re: UA CLE LGA?

    Mon May 11, 2020 3:37 am

    tphuang wrote:
    jetblastdubai wrote:
    tphuang wrote:

    You are still acting like this is 2019. These 5 CLE slots will get traded/sold/leased at some point. They simply have no use for it elsewhere. The question is if they are willing to give up more slots than that. I think trade/lease are both more likely than sell.


    I'm actually looking ahead to 2022 and beyond. The hysteria of the past few months will eventually blow over and the industry will bounce back although probably never as big as it was in 2019. LGA has always been brutally competitive and business-oriented airlines will always want those slots available down the road. I just don't see those slots being bargained away for anything. They can shed assets they can replace later on if necessary....once a LGA slot is gone, it might be gone for decades.


    AA won't have a choice. They don't have cash to keep LGA going. Let's say they are 30% smaller (which is probably a low estimate) for next summer, they'd need to probably cut a good chunk of its worst performing routes. Where do you think these flying are at?

    As for UA, they have been the most aggressive at cutting to avoid chapter 11. It's not a secret UA management sees that it will be a lot smaller coming out of this. How much of a presence does it need at LGA if it continues to dominate at EWR?


    Won't have cash to keep LGA going? They are hardly running anything from LGA right now, & won't need to until the 80% rule goes back into effect. (which likely won't happen until mid-2021)

    Not sure what you meant by "Where do you think these flying are at?"

    UA literally said the same thing about JFK, and look where they wanted back in a few years later, like clockwork.

    dstblj52 wrote:
    Midwestindy wrote:
    greenair727 wrote:


    $1400 -- that's all? Including fuel, aircraft wear and tear, cleaning, pilots, and flight attendants? That seems pretty cheap, no?


    It's significantly higher than that, although I don't want to give out the exact number.

    A $1400/hour flight would mean, on a 1hr 76 seat RJ flight, you would only need to fill 80% of the seats with $23 fares to break even.

    Nicknuzzii wrote:

    Very possible. But I think after seeing all the regret when dropping JFK I don’t think it will happen. We don’t need anymore UA at EWR lol.


    As you know LGA is slot-controlled, and as we saw earlier in the pandemic, airlines are willing to endure significant losses to protect their valuable slot holdings because once you sell your slots its hard to get them back.

    IMO, the only reasons to give up slots right now is:
    a)You desperately need the cash from the slot sale to fund your operations
    b)You can find a buyer willing to pay a good rate for the slots (highly unlikely in this environment)
    c)You don't think travel will return to previous levels anytime soon

    If UA were to sell their slots right now, and travel were to return within 80-90% of previous levels in the next couple years, UA looks kind of dumb.

    Also I believe UA has used some of their slots as collateral for some of their debt they have issued, so I don't know if they would even be allowed to sell.

    https://www.faa.gov/regulations_policie ... -costs.pdf
    2013 but cost per operation block hour of RJ with more then 60 seats 1,424


    It's inaccurate, I don't know what else to say, I have the cost data for RJ/Mainline in front of me.
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    UA444
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    Re: UA CLE LGA?

    Mon May 11, 2020 4:12 am

    UA dumping LGA would be even worse than dumping JFK.
     
    N649DL
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    Re: UA CLE LGA?

    Mon May 11, 2020 4:20 am

    Cointrin330 wrote:
    N649DL wrote:
    Cointrin330 wrote:
    UA has the most subpar product on LGA-CLE and has for years compared to DL and AA. Aside from one E175 it is usually E145s and they are shabby inside and uncomfortable with zero amenities. Back in the 1990s and early 2000s, CO was flying everything from MD80s, 731s, 733s, 735s, 737-700s, 738s, and occasionally, post merger, an A319/320. I don't see UA axing LGA-CLE until they figure out what to do with the slots.


    When UA and CO merged and started cross fleeting, IIRC LGA-CLE was a 757 at one point. Maybe I'm thinking of EWR-CLE.


    A 757 on LGA-CLE was likely a sub and maybe a short-lived operation (the merged UA/CO did use some 757's out of CLE post merger) but LGA to CLE was mostly ERJ-145's and a couple of E-170's. Out of EWR, from what I recall, it was (post-merger) mostly mainline, and mainly 737-700s, -800s, the occasional -900) and some A320s as well, with some Express equipment also used outside of peak times.

    I was wrong on believing UA would not cut LGA-CLE before they figured out what to do with the slots, but since the route was planned to end in late March, it's a moot point now given the massive cuts to NY area airports in light of COVID which accelerated in early April.


    You Know, you're right. Now that I recall it, I flew LAX-EWR on a sUA 757 that came in from CLE back in 2012 and started out at EWR. Weird flight since when we arrived at EWR there was a massive Tornado Watches & Warnings in September of that year when a buddy of mine picked me up from the airport. However the flight was completely smooth throughout.

    When UA and CO combined it wasn't uncommon to see the sUA 757s on CLE-LAX/DEN/MCO/IAH/ORD. I couldn't remember if CLE-LGA (or even BOS) was also on 757s but LGA was definitely mainline at some point.

    There were some also weird sUA 757 flights that were one offs like SAT and DFW to EWR back in like 2014 as well.
     
    tphuang
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    Re: UA CLE LGA?

    Mon May 11, 2020 11:00 am

    Midwestindy wrote:
    tphuang wrote:
    jetblastdubai wrote:

    I'm actually looking ahead to 2022 and beyond. The hysteria of the past few months will eventually blow over and the industry will bounce back although probably never as big as it was in 2019. LGA has always been brutally competitive and business-oriented airlines will always want those slots available down the road. I just don't see those slots being bargained away for anything. They can shed assets they can replace later on if necessary....once a LGA slot is gone, it might be gone for decades.


    AA won't have a choice. They don't have cash to keep LGA going. Let's say they are 30% smaller (which is probably a low estimate) for next summer, they'd need to probably cut a good chunk of its worst performing routes. Where do you think these flying are at?

    As for UA, they have been the most aggressive at cutting to avoid chapter 11. It's not a secret UA management sees that it will be a lot smaller coming out of this. How much of a presence does it need at LGA if it continues to dominate at EWR?


    Won't have cash to keep LGA going? They are hardly running anything from LGA right now, & won't need to until the 80% rule goes back into effect. (which likely won't happen until mid-2021)

    Not sure what you meant by "Where do you think these flying are at?"

    UA literally said the same thing about JFK, and look where they wanted back in a few years later, like clockwork.

    How much cash do you think they will have by next year at this point? AA at NYC is going to be dramatically smaller a year from now vs 2019. What is their normal margin? How much of hit a on the margin is covid + economic downturn? What kind of operational margin do they need to turn to avoid chapter 11 and then chapter 7 with all that interest payment + new aircraft delivery? How much do they furlough in October to lower their cash burn?

    I'd be surprised if they are operating more than 150 flights a day between JFK and LGA after the slot waiver goes away. DL can cut 20 to 30% from its LGA/JFK capacity and still meet their slot usage requirements. What can AA do at LGA/JFK it is already not maximing its slot usage and flying so much 44/50 seaters?

    "Where do you think these flying are at?" - where do you think their worst performing routes are out of?
     
    Cointrin330
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    Re: UA CLE LGA?

    Mon May 11, 2020 11:30 am

    N649DL wrote:
    Cointrin330 wrote:
    N649DL wrote:

    When UA and CO merged and started cross fleeting, IIRC LGA-CLE was a 757 at one point. Maybe I'm thinking of EWR-CLE.


    A 757 on LGA-CLE was likely a sub and maybe a short-lived operation (the merged UA/CO did use some 757's out of CLE post merger) but LGA to CLE was mostly ERJ-145's and a couple of E-170's. Out of EWR, from what I recall, it was (post-merger) mostly mainline, and mainly 737-700s, -800s, the occasional -900) and some A320s as well, with some Express equipment also used outside of peak times.

    I was wrong on believing UA would not cut LGA-CLE before they figured out what to do with the slots, but since the route was planned to end in late March, it's a moot point now given the massive cuts to NY area airports in light of COVID which accelerated in early April.


    You Know, you're right. Now that I recall it, I flew LAX-EWR on a sUA 757 that came in from CLE back in 2012 and started out at EWR. Weird flight since when we arrived at EWR there was a massive Tornado Watches & Warnings in September of that year when a buddy of mine picked me up from the airport. However the flight was completely smooth throughout.

    When UA and CO combined it wasn't uncommon to see the sUA 757s on CLE-LAX/DEN/MCO/IAH/ORD. I couldn't remember if CLE-LGA (or even BOS) was also on 757s but LGA was definitely mainline at some point.

    There were some also weird sUA 757 flights that were one offs like SAT and DFW to EWR back in like 2014 as well.


    Indeed. sUA 757s were in fact flying from CLE to LAX and a few other destinations (ORD too) in that time frame. I think there might have been one mainline UA frequency on LGA-CLE at that time (until the late 2000s there were at least two, including the first departure of the morning and a late afternoon rush hour time flight). Those were on 738s and 73Gs respectively as far as I recall.
     
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    Midwestindy
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    Re: UA CLE LGA?

    Mon May 11, 2020 1:22 pm

    tphuang wrote:
    Midwestindy wrote:
    tphuang wrote:

    AA won't have a choice. They don't have cash to keep LGA going. Let's say they are 30% smaller (which is probably a low estimate) for next summer, they'd need to probably cut a good chunk of its worst performing routes. Where do you think these flying are at?

    As for UA, they have been the most aggressive at cutting to avoid chapter 11. It's not a secret UA management sees that it will be a lot smaller coming out of this. How much of a presence does it need at LGA if it continues to dominate at EWR?


    Won't have cash to keep LGA going? They are hardly running anything from LGA right now, & won't need to until the 80% rule goes back into effect. (which likely won't happen until mid-2021)

    Not sure what you meant by "Where do you think these flying are at?"

    UA literally said the same thing about JFK, and look where they wanted back in a few years later, like clockwork.

    How much cash do you think they will have by next year at this point? AA at NYC is going to be dramatically smaller a year from now vs 2019. What is their normal margin? How much of hit a on the margin is covid + economic downturn? What kind of operational margin do they need to turn to avoid chapter 11 and then chapter 7 with all that interest payment + new aircraft delivery? How much do they furlough in October to lower their cash burn?

    I'd be surprised if they are operating more than 150 flights a day between JFK and LGA after the slot waiver goes away. DL can cut 20 to 30% from its LGA/JFK capacity and still meet their slot usage requirements. What can AA do at LGA/JFK it is already not maximing its slot usage and flying so much 44/50 seaters?

    "Where do you think these flying are at?" - where do you think their worst performing routes are out of?


    They aren't going to find a buyer/trader for those slots, & if they are legitimately on the brink of bankruptcy by next year they'll want the slots as collateral. If you don't operate at the 80% levels you give them up for free.

    Q1 AA had already begun converting most of the LGA flying to E175s, not sure how many 44 seaters are there at this point, but it is significantly less than it has been in the past.

    At this point though this is way off track from the original thread topic.
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    tphuang
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    Re: UA CLE LGA?

    Mon May 11, 2020 1:57 pm

    Midwestindy wrote:
    tphuang wrote:
    Midwestindy wrote:

    Won't have cash to keep LGA going? They are hardly running anything from LGA right now, & won't need to until the 80% rule goes back into effect. (which likely won't happen until mid-2021)

    Not sure what you meant by "Where do you think these flying are at?"

    UA literally said the same thing about JFK, and look where they wanted back in a few years later, like clockwork.

    How much cash do you think they will have by next year at this point? AA at NYC is going to be dramatically smaller a year from now vs 2019. What is their normal margin? How much of hit a on the margin is covid + economic downturn? What kind of operational margin do they need to turn to avoid chapter 11 and then chapter 7 with all that interest payment + new aircraft delivery? How much do they furlough in October to lower their cash burn?

    I'd be surprised if they are operating more than 150 flights a day between JFK and LGA after the slot waiver goes away. DL can cut 20 to 30% from its LGA/JFK capacity and still meet their slot usage requirements. What can AA do at LGA/JFK it is already not maximing its slot usage and flying so much 44/50 seaters?

    "Where do you think these flying are at?" - where do you think their worst performing routes are out of?


    They aren't going to find a buyer/trader for those slots, & if they are legitimately on the brink of bankruptcy by next year they'll want the slots as collateral. If you don't operate at the 80% levels you give them up for free.

    Q1 AA had already begun converting most of the LGA flying to E175s, not sure how many 44 seaters are there at this point, but it is significantly less than it has been in the past.

    At this point though this is way off track from the original thread topic.


    That's my point. WN, B6 and NK will all be willing to lease these slots. They have literally been talking about opportunities opening up a congested airport.
     
    ScottB
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    Re: UA CLE LGA?

    Mon May 11, 2020 2:09 pm

    tphuang wrote:
    How much cash do you think they will have by next year at this point? AA at NYC is going to be dramatically smaller a year from now vs 2019. What is their normal margin? How much of hit a on the margin is covid + economic downturn? What kind of operational margin do they need to turn to avoid chapter 11 and then chapter 7 with all that interest payment + new aircraft delivery? How much do they furlough in October to lower their cash burn?

    I'd be surprised if they are operating more than 150 flights a day between JFK and LGA after the slot waiver goes away. DL can cut 20 to 30% from its LGA/JFK capacity and still meet their slot usage requirements. What can AA do at LGA/JFK it is already not maximing its slot usage and flying so much 44/50 seaters?

    "Where do you think these flying are at?" - where do you think their worst performing routes are out of?


    Even in its darkest days during its two bankruptcies, US Airways maintained its LGA presence and slot portfolio. They ran ridiculous crap like 20x daily LGA-PHL on DH8s but they kept those slots utilized because there is a lot of value in those slots. JFK is less critical to AA but they'll still keep enough slots for the hubs and a somewhat smaller gateway operation. JFK is messier because AA is on the hook for the borrowing to build the terminal, so things may change if they can get someone else to take over the payments -- but T8, while a gorgeous facility, doesn't fit well into DL's or B6's JFK operation.

    jfklganyc wrote:
    Could we see UA leave LGA altogether? Or downsize to just ORD?


    UA won't exit LGA and they won't reduce to just LGA-ORD, either. LGA-DEN and LGA-IAH are incredibly important to business travel, even if that market segment shrinks. They won't allow WN and DL to take the traffic from two of their largest hub markets to NYC's preferred airport for short haul.
     
    Cointrin330
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    Re: UA CLE LGA?

    Mon May 11, 2020 2:29 pm

    ScottB wrote:
    tphuang wrote:
    How much cash do you think they will have by next year at this point? AA at NYC is going to be dramatically smaller a year from now vs 2019. What is their normal margin? How much of hit a on the margin is covid + economic downturn? What kind of operational margin do they need to turn to avoid chapter 11 and then chapter 7 with all that interest payment + new aircraft delivery? How much do they furlough in October to lower their cash burn?

    I'd be surprised if they are operating more than 150 flights a day between JFK and LGA after the slot waiver goes away. DL can cut 20 to 30% from its LGA/JFK capacity and still meet their slot usage requirements. What can AA do at LGA/JFK it is already not maximing its slot usage and flying so much 44/50 seaters?

    "Where do you think these flying are at?" - where do you think their worst performing routes are out of?


    Even in its darkest days during its two bankruptcies, US Airways maintained its LGA presence and slot portfolio. They ran ridiculous crap like 20x daily LGA-PHL on DH8s but they kept those slots utilized because there is a lot of value in those slots. JFK is less critical to AA but they'll still keep enough slots for the hubs and a somewhat smaller gateway operation. JFK is messier because AA is on the hook for the borrowing to build the terminal, so things may change if they can get someone else to take over the payments -- but T8, while a gorgeous facility, doesn't fit well into DL's or B6's JFK operation.

    jfklganyc wrote:
    Could we see UA leave LGA altogether? Or downsize to just ORD?


    UA won't exit LGA and they won't reduce to just LGA-ORD, either. LGA-DEN and LGA-IAH are incredibly important to business travel, even if that market segment shrinks. They won't allow WN and DL to take the traffic from two of their largest hub markets to NYC's preferred airport for short haul.


    Agreed. ORD, DEN, and IAH will remain the mainstay of UA operations at LGA and American Airlines will also retain a significant footprint at LGA.
     
    tphuang
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    Re: UA CLE LGA?

    Mon May 11, 2020 2:44 pm

    ScottB wrote:
    tphuang wrote:
    How much cash do you think they will have by next year at this point? AA at NYC is going to be dramatically smaller a year from now vs 2019. What is their normal margin? How much of hit a on the margin is covid + economic downturn? What kind of operational margin do they need to turn to avoid chapter 11 and then chapter 7 with all that interest payment + new aircraft delivery? How much do they furlough in October to lower their cash burn?

    I'd be surprised if they are operating more than 150 flights a day between JFK and LGA after the slot waiver goes away. DL can cut 20 to 30% from its LGA/JFK capacity and still meet their slot usage requirements. What can AA do at LGA/JFK it is already not maximing its slot usage and flying so much 44/50 seaters?

    "Where do you think these flying are at?" - where do you think their worst performing routes are out of?


    Even in its darkest days during its two bankruptcies, US Airways maintained its LGA presence and slot portfolio. They ran ridiculous crap like 20x daily LGA-PHL on DH8s but they kept those slots utilized because there is a lot of value in those slots. JFK is less critical to AA but they'll still keep enough slots for the hubs and a somewhat smaller gateway operation. JFK is messier because AA is on the hook for the borrowing to build the terminal, so things may change if they can get someone else to take over the payments -- but T8, while a gorgeous facility, doesn't fit well into DL's or B6's JFK operation.



    I would say this is probably going to get darker than those bankruptcies. 40 to 50% smaller is not out of question.
     
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    jfklganyc
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    Re: UA CLE LGA?

    Mon May 11, 2020 4:21 pm

    NYC is a special case

    Until there is a vaccine, you really can’t use the subway. The problem is this isnt Dallas or Orlando where you drive to work in the corporate Park and park your car.

    Without a subway, New York City and specifically Manhattan dont work

    I think business and around New York City is going to be in trouble until the vaccine is in place. And that means business travel, the heart and soul of LaGuardia, is going to be way down.

    B6 JFK ... That is who you want to be for this recovery in New York City
     
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    Midwestindy
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    Re: UA CLE LGA?

    Mon May 11, 2020 4:43 pm

    tphuang wrote:
    Midwestindy wrote:
    tphuang wrote:
    How much cash do you think they will have by next year at this point? AA at NYC is going to be dramatically smaller a year from now vs 2019. What is their normal margin? How much of hit a on the margin is covid + economic downturn? What kind of operational margin do they need to turn to avoid chapter 11 and then chapter 7 with all that interest payment + new aircraft delivery? How much do they furlough in October to lower their cash burn?

    I'd be surprised if they are operating more than 150 flights a day between JFK and LGA after the slot waiver goes away. DL can cut 20 to 30% from its LGA/JFK capacity and still meet their slot usage requirements. What can AA do at LGA/JFK it is already not maximing its slot usage and flying so much 44/50 seaters?

    "Where do you think these flying are at?" - where do you think their worst performing routes are out of?


    They aren't going to find a buyer/trader for those slots, & if they are legitimately on the brink of bankruptcy by next year they'll want the slots as collateral. If you don't operate at the 80% levels you give them up for free.

    Q1 AA had already begun converting most of the LGA flying to E175s, not sure how many 44 seaters are there at this point, but it is significantly less than it has been in the past.

    At this point though this is way off track from the original thread topic.


    That's my point. WN, B6 and NK will all be willing to lease these slots. They have literally been talking about opportunities opening up a congested airport.


    You mean B6 & NK have, WN has said no such thing, and they have been quite open about NYC underperforming for them. They have few uses of slots from LGA, as all their non-focus city markets have performed terribly to LGA.

    AA is not giving B6 or NK slots in LGA unless it is a trade, and neither carrier has anything to offer AA.

    As I have mentioned network planning and airline management are extremely reluctant to give up slots.
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    tphuang
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    Re: UA CLE LGA?

    Mon May 11, 2020 4:53 pm

    Midwestindy wrote:
    tphuang wrote:
    Midwestindy wrote:

    They aren't going to find a buyer/trader for those slots, & if they are legitimately on the brink of bankruptcy by next year they'll want the slots as collateral. If you don't operate at the 80% levels you give them up for free.

    Q1 AA had already begun converting most of the LGA flying to E175s, not sure how many 44 seaters are there at this point, but it is significantly less than it has been in the past.

    At this point though this is way off track from the original thread topic.


    That's my point. WN, B6 and NK will all be willing to lease these slots. They have literally been talking about opportunities opening up a congested airport.


    You mean B6 & NK have, WN has said no such thing, and they have been quite open about NYC underperforming for them. They have few uses of slots from LGA, as all their non-focus city markets have performed terribly to LGA.

    AA is not giving B6 or NK slots in LGA unless it is a trade, and neither carrier has anything to offer AA.

    As I have mentioned network planning and airline management are extremely reluctant to give up slots.

    they won't have a choice. The will be a lot smaller in NYC/LAX.

    WN has said many times before they are looking for more LGA slots and they have the cash for it.
     
    User avatar
    STT757
    Posts: 14138
    Joined: Tue Mar 28, 2000 1:14 am

    Re: UA CLE LGA?

    Mon May 11, 2020 4:59 pm

    jfklganyc wrote:
    NYC is a special case

    Until there is a vaccine, you really can’t use the subway. The problem is this isnt Dallas or Orlando where you drive to work in the corporate Park and park your car.

    Without a subway, New York City and specifically Manhattan dont work

    I think business and around New York City is going to be in trouble until the vaccine is in place. And that means business travel, the heart and soul of LaGuardia, is going to be way down.

    B6 JFK ... That is who you want to be for this recovery in New York City


    Interesting. Around 9/11, despite many people's fears, New York City started to grow and experience an urban renewal unlike anything else in the City's history. Especially Brooklyn where neighborhoods that were war zones in the 1990s became hipster havens by the late '00s. NYC became the mecca of the urbanization movement all over the US that saw cities grow especially with younger millennials. JetBlue being based in New York city really rode this wave, the wave of growth of younger people without kids and disposable incomes filling the outer boroughs of the City. As has been discussed many times in the late nineties when B6 was getting up and going you could go bowling on Kennedy airport's runways during certain hours due to the lack of traffic.

    The city grew, tourism grew, B6 grew and Kennedy airport grew (eventually overtaking EWR which had historically been NYC's busiest airport).

    If the city suffers, if the love of everything urban wanes, if people with incomes that can afford it again move out of the city and back to the suburbs that will be something B6 or anyone else is not going to be able to easily adapt to serve. If anything the stifling of international tourism which will likely be the last areas the industry will see return would hurt B6 and Kennedy the most where as EWR and LGA which both handle more domestic passengers than Kennedy will do better.

    But alas as I've seen in my twenty years here I would not write New York city off just yet. I remember reading here right after 9/11 that NYC would suffer economic fallout that would make the 1970s look like a golden age. When in reality the years after 9/11 were the city's best years.

    I work in Lower Manhattan and commute in from New Jersey. I am not taking transit or the bus until this is over, I'm driving in as is everyone I work with. I would love to go back to the convenience of just getting to park right outside of my work without having to walk blocks in the city to reach public transportation. Perhaps that will finally convince B6 to finally move to Orlando.
    Eastern Air lines flt # 701, EWR-MCO Boeing 757
     
    tphuang
    Posts: 5297
    Joined: Tue Mar 14, 2017 2:04 pm

    Re: UA CLE LGA?

    Mon May 11, 2020 5:07 pm

    I think EWR and JFK are both going to win here, but EWR especially. My company is looking now to open up a NJ office, which is great since I've moved to Jersey side now. And the reason for the move is simple. It doesn't make sense to bring everyone together and get infected. A lot of people will work in their homes in NJ. Also, the cost of leasing office space is just a lot cheaper in NJ than midtown or wall street area. And EWR was already as convenient as LGA if you were start off in wall street area. As more business lease spaces in Jersey City and Hobokken (not just in exchange place), I see the share of business traffic to EWR will increase after this.

    And same with JFK, as businesses get comfortable with the idea of multiple offices and not putting everyone in the same place, there will be more offices in Brooklyn, Long Island and westchester. And a lot more people will work from home too, so they won't be leaving from midtown manhattan, where LGA is the most convenient. I think there will be a profound shift in how we fly out of NYC.

    If you are UA, this is a great thing to consolidate on your fortress hub at EWR.

    And speaking of business travel, I think it will be a while until domestic business travel really get going again. I can't say for consulting since that's a different line of work. But for tech or finance company, it just doesn't make sense to allow even domestic business travel while COVID is a threat, since you don't want 20% of your office get sick. The liability is pretty high. And the conferences will be even further away. I can't imagine that will be up and running before vaccine is available. VFR will be the first thing back. Right now, the only reason I would want to travel is to see my friends and relatives.
     
    ScottB
    Posts: 7039
    Joined: Fri Jul 28, 2000 1:25 am

    Re: UA CLE LGA?

    Mon May 11, 2020 9:44 pm

    tphuang wrote:
    I would say this is probably going to get darker than those bankruptcies. 40 to 50% smaller is not out of question.


    Those bankruptcies at US weren't that far from that number. In 2000, US flew 66.9 billion ASMs and had a fleet of 417 mainline aircraft. By the time of the merger with AWA in 2005, US had 232 mainline aircraft and flew 51.5 billion ASMs. US dropped two hubs at PIT and BWI -- but not LGA. And they came very close to liquidation late in 2004.

    STT757 wrote:
    Around 9/11, despite many people's fears, New York City started to grow and experience an urban renewal unlike anything else in the City's history. Especially Brooklyn where neighborhoods that were war zones in the 1990s became hipster havens by the late '00s. NYC became the mecca of the urbanization movement all over the US that saw cities grow especially with younger millennials. JetBlue being based in New York city really rode this wave, the wave of growth of younger people without kids and disposable incomes filling the outer boroughs of the City.


    Perhaps off-topic, but several factors came together to fuel this shift. A string of long, credit-fueled economic expansions beginning during the Reagan administration and extending to earlier this year, punctuated by a handful of deep recessions, helped both cities and suburbs alike. The champions of the post-industrial economy -- knowledge industries like finance, high tech, and biotech -- tended to cluster in cities and near institutions of higher education. Lack of investment in roads and transit infrastructure since the 1960s/1970s (due both to funding problems and highway revolts) meant grinding commutes into cities with high-paying jobs. And leadership in cities like New York took on some of the nagging quality-of-life issues like muggings which drove people out of cities.

    JetBlue also benefited from legacy incumbents sharply reducing air service. In July 2000, the eight of the ten largest U.S. carriers which flew to BOS (AA/CO/DL/HP/NW/TW/UA/US) operated 9,803 domestic mainline departures for the month. By July 2019, the three descendants of these carriers operated 5,099 domestic mainline departures for the month, while B6 had 4,509 domestic departures in the same month (there were an additional 1,701 regional carrier departures on behalf of the mainline operators in July 2019, but BOS was even busier for regional flying in 2000).
     
    tphuang
    Posts: 5297
    Joined: Tue Mar 14, 2017 2:04 pm

    Re: UA CLE LGA?

    Mon May 11, 2020 11:02 pm

    ScottB wrote:
    tphuang wrote:
    I would say this is probably going to get darker than those bankruptcies. 40 to 50% smaller is not out of question.


    Those bankruptcies at US weren't that far from that number. In 2000, US flew 66.9 billion ASMs and had a fleet of 417 mainline aircraft. By the time of the merger with AWA in 2005, US had 232 mainline aircraft and flew 51.5 billion ASMs. US dropped two hubs at PIT and BWI -- but not LGA. And they came very close to liquidation late in 2004.

    That's 23% shrinkage. That level of shrinkage is probably close to what B6/AS has to be looking at if we are going by a L shaped recovery. And I'm thinking B6 a year from now will probably have to shrink each of FLL/MCO/SJU by over 30%, cut LGB almost completely, in order to limit JFK/BOS cuts. And AS will probably have to chop all non-hub HI flying, shrink Cali by 1/3 to not shrink SEA.

    I'm thinking 40% shrinkage is probably what AA is going to be facing with the mountain of debts they are facing. And also right now, LGA/LAX is basically so much less profitable than rest of their network, that I'm not sure how much stuff they'd have to cut in places like MIA/PHL/ORD/PHX to avoid taking the hammer on LGA. As I said, it's not like they can lower the capacity by just downgauging.

    JetBlue also benefited from legacy incumbents sharply reducing air service. In July 2000, the eight of the ten largest U.S. carriers which flew to BOS (AA/CO/DL/HP/NW/TW/UA/US) operated 9,803 domestic mainline departures for the month. By July 2019, the three descendants of these carriers operated 5,099 domestic mainline departures for the month, while B6 had 4,509 domestic departures in the same month (there were an additional 1,701 regional carrier departures on behalf of the mainline operators in July 2019, but BOS was even busier for regional flying in 2000).

    guess what, that's about to happen again at BOS.

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