What if Delta just continues to outsource our flying and tells us in late 2016, "hey you want some of your flying back in Contract 2012? ... he ha, buy it from us." Just taking post merger shrinkage and straight line compounding, we will be 37% smaller by then.
What leverage do we have?
I'd like to hear the SWA plus group explain how we get that raise when the Company is exercising their muscles to replace us.
Alaska reported 6% higher mainline capacity, this quarter and expects it grow another 4% in Q4. The carrier is expanding its service between San Diego and Hawaii, with the launch of daily nonstop flight to Honolulu in November. Hawaii now accounts for about 20% of the network for Alaska.
For 2012, the carrier is guiding for a capacity growth of about 5%, primarily adding capacity into Hawaii and in regional markets such as Seattle to Spokane, Boise and Kansas City. Alaska views this growth to be in line with its profitability goals as this is driven by back filling of competitive capacity that has left the market.
Hauenstein admits that in hindsight: "There was excess capacity from the industry and from us." Part of the capacity dump could be attributed to the relatively young joint ventures created by the three large airline alliances in the Atlantic market and their acclimation to joint network planning.
Relative to the transatlantic joint venture partners in the SkyTeam tie-up - Delta, Air France and Alitalia - Hauenstin says: "I think this has been a learning process for us as we go through the first two years of our joint venture." Delta and its SkyTeam partners applied lessons learned and have moved to assure that the joint venture's collective transatlantic capacity, which entails routes between North America and Europe, is falling by 7-9%, or 15 points, during the winter season, versus previous growth projections of 7-8%.
The North American transatlantic market during the summer is also seeing a rise in average seat count, driven by Air France and Lufthansa expanding their US A380 operations, Jenks notes. Average aircraft size has risen from 252.4 seats in 2010 to 255.8, underpinned by the addition of a total of five new A380 frequencies introduced during the summer. Lufthansa has added A380 flights from Frankfurt to New York Kennedy, Miami and San Francisco while Air France expanded its Paris-Atlanta A380-operated service introduced last year with the addition of Paris-Washington DC and San Francisco.
What these reporters are missing is that Delta pulling capacity down does not necessarily save us a dime (or earn more profit) we still pay for our 50% of the Joint Venture flying ... we simply pay someone else to fly it.
If I'm wrong, someone school me.