*"Our balls have dropped" New Years add notwithstanding

 

Critical Mass.

BTW:

735 (skeleton fleet mostly on Intra-TX flying) - Y122
733 - Y137 (marginal numbers now in fleet)
73C/73W - Y143
73H - Y175

$50 oil cries for shorter segments when there is no capacity control. Business model has little to do with it.

The network is efficient from a revenue standpoint but not from an operational standpoint. The exact reverse of what SWAs is...they want to be where we are and are trying to change it which many do not notice because it is going at a sloths pace.

 

Business model has a lot to do with it. Price per bag is the same for a FLL-LAX and a FLL-TPA flight. At ancillary revenue at 40% yes indeed shorter flights are the way to go. They have talked about adjusting fees for segment length. It has not happened yet.

I don't think it is efficient from the revenue standpoint. It is rather stable from that standpoint. Efficient? How so? I don't understand your SW comment. They want to be where we are?

 

It really does not. The take rates for ancillaries along with the average fare when you look at systemwide O&Ds varies greatly based on a number of factors with distance being in the #1 spot when you average out market anomalies. Secondly, We've been doing distance based pricing on fees for a while now on a limited basis. BFS anyone?

For your theory to work the average fare would have to multiply evenly based on distance and take rates for ancillaries would have to also do the same. Not the real world.

If its not efficient what are you proposing? That we run a high frequency/low # of city (comparative to fleet size) network like Southwest has been historically...trying to capture market share? That is a losing proposition for any ULCC whether we are taking about NK, FR or DY etc. That is what is needed to achieve those sorts of efficiency you are alluding to.

SWA has almost 0 operational flexibility when it comes to network design because it is constrained via just about every department you can think of whether it is flight ops, ground ops, network planning or even revenue management and marketing. For the last 4-5 years they have been trying to figure out how to achieve levels remotely similar to ours so they can squeeze out optimum market times and aircraft flows system-wide and not try to make up various inefficiencies with power-margin markets like Intra-TX/CA. For the record, SWA does not really want to just be like us when it comes to this flexibility, they want to be like anyone else but them...and they are taking baby steps to achieve that level.

 

Besides the BFS we are not doing anything. There is 4 BFS on the new planes. Hardly meaningful. None of the other charges were adjusted as of now. They are entertaining the idea.

No it does not have to multiply evenly and I realize it does not. You are balancing:

- fuel, time on the airplane, cycles, etc. many variables
vs
- fixed fee system (except BFS) + base fare + fuel charge (when there is one)

This is a complex formula. But it is to be noted that on one side of the equation the fixed fees take 40% of the total. That is almost 1/2 the equation on that side! Very significant. There is a golden number for segment length. I don't know what it is. But we were told in initial that long legs are not where the business is at. And that was when we had only a handful of fees. I.e. the much publicized carry on fee came years later.

At Ryan Air average segment length is 1.2 hours, at Easy it is 1.6 or so. That could be in part because Europe is not nearly the size of the USA.

I can't say I know. But I strongly feel shorter legs are the way to go. Unfortunately.

I am not proposing anything. The company stated that we are going to increase frequencies in 2015. Connecting the dots. Not my idea.

Adding some frequency will not turn us into a network carrier. It is not like we will fly 6 flights a day to everywhere, or else we don't serve that destination at all. Again, there is a golden middle. Less than one leg a day per destination is definitely not, otherwise we would be announcing more destinations for 2015. But we are not. They are increasing frequency instead.

They have issues because they had this explosive growth that was partially fueled by the hedges. They gained significant market share during those times which was awesome for them. Now they will have to trim and/or shift things around. After they fine tune it, they will find their spot. They are certainly not short of talents over there.

 

Thats why I said, limited. I think you forgot that choosing ANY seat on the plane is not uniform . That is a big piece of the pie. So yes, that is something else other than BFS. However, you're also right that there is always new opportunity..although some of it hindered by logistics.

You are trying to disprove someone who does know the exact numbers with hypothetical numbers that you are guessing . The operational factors of operating longer stage lengths are well worth it when you factor in the revenue. Look, im not saying that NK is a transcon airline, just that dreams of whacking at the stage length does not make sense. + The catch-22 is that in a high oil environment you run into major capacity controls and you sacrifice short stages for longer ones and now in a lower oil environment you think about competition from other modes of transport that suddenly are legitimized again (namely, cars).

Europe has a massively different socio-economic situation along with a geography factor which makes it mostly incomparable to American realities. Might as well compare the stage lengths of Azul, Tiger or Air Asia in that case..

Free country my friend! But I'd tell you that youd be the only strategist at any US carrier with that overall belief.

Maybe that was a misunderstanding on my part, I thought you were alluding to running massive amount of frequencies. Going from 3x weekly to Daily or from Daily to Double Daily isnt what I was talking about. I was talking about running frequencies to such a level where we actually compete heavily on it. Never say never though

The issue isnt nor was it growth. If growth is what you want to go with, then let me point you to carriers that have pre-SWA and post-SWA grown like a mushroom and not exhibited these deficiencies. Namely because they are a product of a certain mentality which is why you still cannot depart at 11:02 or 15:59...thats just a fun fact heh

 

Dude if you know the numbers why do you let me write essays with my poor English? Just say so. So what are the numbers? What is the stage length that is best for Spirit at $50 a barrel and what is it at $75 and $100? How would that change if they would implement adjusted fees for everything? I would love to know the answer because this will say a lot about our future "on the job QOL".

I went back to my logbook pro (as much as I hate that software) too see what my average block per leg was:

2008 2.2h
2009 sucking my thumb in fetal
2010 2.2h
2011 2.4h
2012 2.5h
2013 2.4h
2014 2.5h

It actually went up after 2010 when we started to introduce more fees. So you might be up to something. I am wondering what others have for averages.

I certainly hope you are right. None of us wants to fly SW schedules here. I would love trips that average 6 hours a day or more but I would rather fly 2 x 3h legs vs 4 x 1.5h.

 

This conversation has really come to make me realize I have no idea how to run an airline

 

Yes. Please you guys figure this one out. I need to know if I should update my apps with the legacies.

 

RP4242,

I have not been paying too much attention to this thread for the past years. So I mistook you for an ex Chautauqua pilot with that handle. I am like way to go... another RJ pilot with the insight ... well... I used to be one too.

I just now realize that you are actually in some sort of operations/planning role at Spirit. After realizing that I went back and read through your older posts. The ones related to Spirit. It is good to have your inside even though you are only allowed to share so much. I am glad some management types actually care to put their fingers on the pilot's pulse by reading a board like this. I don't want to speak for everyone but I feel there is a huge difference between what is actually happening on the line versus what management thinks is happening. But that is probably every airline out there.

So where do you see Spirit in the next 10 years? How about after that? In your opinion what is the biggest threat to our existence?