Originally Posted by Packer Backer
So why are their CASM's higher, excluding fuel, than Southwest's? I THINK it is because they have to many non-operational employees driving the labor costs per mile up.
They have higher costs for several reasons.....................
Most Legacy Carriers have their hubs in Large Metro Markets...............
LAX, SFO, ORD, ATL, DFW JFK on the domestic side coupled with the higher costs of LABOR and Realestate in International cities. The legacies generally have larger #'s of Gates and a Larger # of Landing fees respectively. JB has their Hub in JFK but I believe (don't quote me) their were given a very lucrative lease deal for Gate space there..........
However with the Bankruptcies, the legacies are renogotiating their gate leases and other costs at their main hubs.
Legacies have higher CASM's because they operate several different types of aircraft, which cause additional training and Mainteneace costs.................
Even that is changing, The legacies are beginning align their Fleets to limit the different types to only a few....................Continental is a good example. They are a Boeing Fleet, 737, 757,777.........They parked their DC9's, DC-10s and 727's and I believe most if not all their MD-80s.
American is slowly replacing the MD-80's with 737NG. American parked their DC-10s, MD-11 and is finishing up with their A-300's. Same with NWA losing their DC-9s and Dc-10s.
The Old USAir, for example, at one time had 11 different aircraft. Very inefficient.
Airbus has helped them with the 319, 320, 321..........different size aircraft for different markets yet they are the same "TYPE Rating" for pilots and the same for Maintenance. They Still have A-330's, 767's 757's 737's and the 319-321 with the A350 on order.
American is slowly replacing the MD-80's with 737NG. American parked their DC-10s, MD-11 and is finishing up with their A-300's.
Legacies have higher costs because they offer additional products.............
First and Business classes for the in Demand Business traveler. They have Business lounge facilities.
The funny thing is when you break down the cost by specific Aircraft (which they genrally don't do) instead including all fleet types the legacies are pretty close to the LCC's when you compare A-320s for example.
It has been said before...........Once this Delta battle is over, watch and see what happens. The BIG boys will be on PAR if not slightly less than many LCC's. The water level will stablize and things will get better. (barring another international catastophe or major Oil shock)