Originally Posted by
Gearjerk
What does this mean in the eyes of the "Deltoids"? More quickly reducing the amount of "gas guzzling" DC-9's, or accelerating the conversion of 50-seat leases into 70/76 seat options?
*Disclaimer- No, I'm not throwing out the "F" word, or think that the sky is falling. Just thought it was an interesting article (highlighted in red), and seeing as how the United/Continental bargaining position is to reduce the amount of 50-seat planes, am hoping this helps their position.
GJ
Right now it has 354 planes with 50 seats. Planes of that size are out of favor with airlines right now because they spread fuel costs among fewer passengers. According to a filing last month, the company owned 18 of those and leased the rest as of the end of 2010, opening the possibility that it could park planes whose leases expire this year.
I think overall it helps us & the entire industry. One if the things that would plummet us right back to the red a lack of capacity discipline. With capacity discipline we can adjust fares to compensate for fuel costs. It should also help our stock price.
WRT the 50 seaters, it will help with that too. IMO management will cap out the 70/76 seaters regardless of fuel costs. As the 50 seaters become even less attractive due to rising fuel costs the industry will continue to remove them. When(not it) we hold strong on scope the end result will be less outsourcing.
Capacity discipline is VERY important.