DogWhisperer

Denny Crane

Riddle me this.....

Didn't oil just close at about 84 dollars a barrell? Who knows (no, really who knows) at what point does the price of oil have to go down to to make the 50 seater viable again? Could Delta's purchase of an oil refinery cause them to maybe look at 50 seaters differently for the future?

Denny

Bucking Bar

Denny,

Logic tells me "oil killed the 50 seater" is extremely simplistic. Many of the 50 seaters are simply getting older and the model they were used in no longer exists. Sector costs have increased as a result of all the crap we taxpayers have over built into airports from security to Taj Mahal structures like Brunswick where maybe 120 people walk through the terminal a day. These smaller airports got Federal money to build RJ palaces which simply are not self sustaining using local budgets. At the same time travelers began avoiding RJ connections, preferring to drive to the next larger airport and airlines got tired of competing head to head and decided to remove competitive capacity to raise revenues.

The 50 seat RJ is like my 300,000 mile airport truck. It isn't comfortable or fashionable. Do I really want to spend $1,000 fixing it up to drive another three years?

Management would prefer to buy newer, larger, airplanes to refleet DCI. The thing is half of those newer, larger airplanes are 717's flown by us. That's the deal.

If the deal doesn't happen the 50 seater is remains airworthy. Like my old airport truck they'll refresh the engine, put new brakes on it and run the damn thing until it breaks.

There are still markets where a CRJ200 fits and management is keeping some of them to fly those markets.

Fuel is only a part of the equation. If there is a sufficient revenue premium then the operation still works. Management would prefer to refleet. It is not the end of the World for any of us if they choose option B. In fact, if you like what you see now, that's probably "option B."

Denny Crane

I'm a pretty simplistic guy!! Thanks for answering. As far as your last sentence goes, that's the point, I don't particularly like what I see.....But is the alternative any better? I don't know.

Denny

Bucking Bar

Check out FTB's latest chart. Guaranteed to be the talk of the town later today. Good best case / worst case and I hope he adds a column for status quo with a static fleet +88 717's and 3 to 1 trigger.

I think reality will be somewhere in between the best and worst case, with the wild card of some wide body refleeting once we get our debt in line.

slowplay

That chart is a nice work of fiction. It assumes a huge block hour reduction to keep capacity flat, meaning that Delta would have to pull out of a substantial number of markets.

It's a spreadsheet designed to force a result. Also, he didn't use a proper "control group", our current PWA. Take a look at his numbers presuming that decrease under our current agreement. Where's the "worst case" there...and with his no vote that's what he's advocating.

APCLurker

Why is it that the most profitable airline for decades has the "strongest" scope with zero small jet given away??

johnso29

Because they run an entirely different business structure. They are really NOT comparable. And their cost structure continues to rise. CASM continues to rise, while PRASM is dropping.

APCLurker

Ah yes, the dalpa "we are not swa" or "swa is not in our peer group" meme.

How are they not comparable? You keep spouting off to others in many threads to provide "proof" or "where are your facts." Well, prove it johnso.

johnso29

Look at their route structure. Is it a hub and spoke system? Does SWA operate multiple fleet types? Do they fly around the world? Do they pay for their pilots type ratings?

I never said SWA pilots were not in our peer group. YOU put those words in my mouth. I said Southwest the airline and Delta the airline were not comparable.