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Old 08-30-2009 | 06:30 AM
  #13485  
alfaromeo
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Originally Posted by sailingfun
I have no idea where people get the concept that Delta has lower costs then SWA. We are not even in their ballpark. If you break out our CASM by fleet types it gets even worse since in general the CASM at Delta runs from the largest to the smallest aircraft getting higher as the aircraft gets smaller. For years our lowest CASM aircraft was the 767-400 in the domestic configuration. Here is a link with the 2008 numbers. Very sobering!
http://web.mit.edu/airlinedata/www/2008%2012%20Month%20Documents/Expense%20Related/Total/System%20Total%20Operating%20Expense%20per%20Avail able%20Seat%20Mile%20(CASM).htm
Those numbers are not the relevant numbers. A carrier like Delta has a lot of core costs that are reflected in those numbers. For instance, we have to maintain the costs of a large international sales force that a carrier like Southwest doesn't have.

One relevant number is the incremental additional costs that are incurred when each carrier adds one more flight. In this area, Delta is more than competitive with Southwest.

The real relevant number is the incremental additional net revenue that adding one flight gives you. That is revenue added minus the cost incurred. Our overall RASM is higher than Southwest's, but that doesn't mean it would be so on each segment.

I do know that in Salt Lake, a market where we compete strongly with Southwest, we are doing better than they are. Certainly Delta management does not seem scared by Southwest today. They are a strong carrier and well run, but they are no longer able to walk into any market and push people around any more. They have to compete like the rest of us mere mortals.