Estimated pay
11-07-2022 | 08:42 AM
#41
Seat 0B
Joined: Dec 2007
Posts: 796
Likes: 0
From: 777 FO
11-07-2022 | 09:01 AM
#43
Line Holder
Joined: Apr 2013
Posts: 740
Likes: 38
11-07-2022 | 02:04 PM
#44
On Reserve
Joined: Mar 2011
Posts: 15
Likes: 0
From: CL65
Lets look at actual numbers. If you go to ir.united.com, there is a United Next presentation that was put out June 2021. Lots of good info, to include United Next's strategy.
https://ir.united.com/static-files/0...1-720e3d8d0e82
The slideshow shows that the cost per seat mile for a 700 mile leg is:
$36 per seat on a 50 seater ($1800)
$16 per seat on a Max9 (179 seats) ($2864)
This is based on the assumed fuel prices at the time of this presentation.
This presentation quoted:
2019 = $2.09
2023E = $2.07
2026E = $2.20
One must look at this as opportunity cost. If you collect $200 per ticket, lets assume 4 legs (2 legs going, 2 legs back). So, only $50 applies to this flight.
The full RJ collects $2500 for a $1800 fuel cost for a profit before any other expenses of $700.
The MAX9 costs $2864 in fuel costs. At $50 per pax, that requires 57-58 pax to break even. After that, sheer profit on this scale. RJ made a profit of $700. That would require 14 more passengers.
So, if the MAX 9 booked 58+14 = 72 pax all at the same ticket price (no first class ticket increases factored in), then, they still have 107 more tickets to sell and make more. (opportunity cost) If they booked this flight full, that would generate an additional $5,350 profit on this leg alone.
What's the takeaway. The MAX9 is so fuel efficient compared to a 50 seater, that you can fly a MAX9 less than 1/2 full for cheaper than a 50 seater. Then, you have the "opportunity" to make so much more with pricing power as you try to fill the plane up.
Even more savings can be realized with frequency.
Fly (3) 50 seaters to a city today. That is 150 seats of revenue. ($1800 x 3 = $5400) to fly 15 seats to that city.
or
Fly (2) 179 seat MAX9 to that city for a total of 358 seats of revenue. ($2864 x 2 = $5728 to fly 358 seats to that city.
You sacrifice frequency, but help solve pilot shortage. It costs $328 more to fly 208 more seats a day to this city.
What do you have to do to get there? Get more MAX 9 planes to replace RJs.
United is taking 1 plane every 3.5 days to do this. (United Next)
It can't happen overnight, so you have to put a bandaid on the pilot shortage at the regionals while you get your ducks in a row to execute on this strategy above.
Just my opinion.
11-07-2022 | 05:54 PM
#45
Line Holder
Joined: Dec 2018
Posts: 1,150
Likes: 9
Lets look at actual numbers. If you go to ir.united.com, there is a United Next presentation that was put out June 2021. Lots of good info, to include United Next's strategy.
https://ir.united.com/static-files/0...1-720e3d8d0e82
The slideshow shows that the cost per seat mile for a 700 mile leg is:
$36 per seat on a 50 seater ($1800)
$16 per seat on a Max9 (179 seats) ($2864)
This is based on the assumed fuel prices at the time of this presentation.
This presentation quoted:
2019 = $2.09
2023E = $2.07
2026E = $2.20
One must look at this as opportunity cost. If you collect $200 per ticket, lets assume 4 legs (2 legs going, 2 legs back). So, only $50 applies to this flight.
The full RJ collects $2500 for a $1800 fuel cost for a profit before any other expenses of $700.
The MAX9 costs $2864 in fuel costs. At $50 per pax, that requires 57-58 pax to break even. After that, sheer profit on this scale. RJ made a profit of $700. That would require 14 more passengers.
So, if the MAX 9 booked 58+14 = 72 pax all at the same ticket price (no first class ticket increases factored in), then, they still have 107 more tickets to sell and make more. (opportunity cost) If they booked this flight full, that would generate an additional $5,350 profit on this leg alone.
What's the takeaway. The MAX9 is so fuel efficient compared to a 50 seater, that you can fly a MAX9 less than 1/2 full for cheaper than a 50 seater. Then, you have the "opportunity" to make so much more with pricing power as you try to fill the plane up.
Even more savings can be realized with frequency.
Fly (3) 50 seaters to a city today. That is 150 seats of revenue. ($1800 x 3 = $5400) to fly 15 seats to that city.
or
Fly (2) 179 seat MAX9 to that city for a total of 358 seats of revenue. ($2864 x 2 = $5728 to fly 358 seats to that city.
You sacrifice frequency, but help solve pilot shortage. It costs $328 more to fly 208 more seats a day to this city.
What do you have to do to get there? Get more MAX 9 planes to replace RJs.
United is taking 1 plane every 3.5 days to do this. (United Next)
It can't happen overnight, so you have to put a bandaid on the pilot shortage at the regionals while you get your ducks in a row to execute on this strategy above.
Just my opinion.
https://ir.united.com/static-files/0...1-720e3d8d0e82
The slideshow shows that the cost per seat mile for a 700 mile leg is:
$36 per seat on a 50 seater ($1800)
$16 per seat on a Max9 (179 seats) ($2864)
This is based on the assumed fuel prices at the time of this presentation.
This presentation quoted:
2019 = $2.09
2023E = $2.07
2026E = $2.20
One must look at this as opportunity cost. If you collect $200 per ticket, lets assume 4 legs (2 legs going, 2 legs back). So, only $50 applies to this flight.
The full RJ collects $2500 for a $1800 fuel cost for a profit before any other expenses of $700.
The MAX9 costs $2864 in fuel costs. At $50 per pax, that requires 57-58 pax to break even. After that, sheer profit on this scale. RJ made a profit of $700. That would require 14 more passengers.
So, if the MAX 9 booked 58+14 = 72 pax all at the same ticket price (no first class ticket increases factored in), then, they still have 107 more tickets to sell and make more. (opportunity cost) If they booked this flight full, that would generate an additional $5,350 profit on this leg alone.
What's the takeaway. The MAX9 is so fuel efficient compared to a 50 seater, that you can fly a MAX9 less than 1/2 full for cheaper than a 50 seater. Then, you have the "opportunity" to make so much more with pricing power as you try to fill the plane up.
Even more savings can be realized with frequency.
Fly (3) 50 seaters to a city today. That is 150 seats of revenue. ($1800 x 3 = $5400) to fly 15 seats to that city.
or
Fly (2) 179 seat MAX9 to that city for a total of 358 seats of revenue. ($2864 x 2 = $5728 to fly 358 seats to that city.
You sacrifice frequency, but help solve pilot shortage. It costs $328 more to fly 208 more seats a day to this city.
What do you have to do to get there? Get more MAX 9 planes to replace RJs.
United is taking 1 plane every 3.5 days to do this. (United Next)
It can't happen overnight, so you have to put a bandaid on the pilot shortage at the regionals while you get your ducks in a row to execute on this strategy above.
Just my opinion.
11-09-2022 | 07:22 AM
#46
Banned
Joined: Feb 2011
Posts: 1,629
Likes: 0
From: 756 Left Side
Lets look at actual numbers. If you go to ir.united.com, there is a United Next presentation that was put out June 2021. Lots of good info, to include United Next's strategy.
https://ir.united.com/static-files/0...1-720e3d8d0e82
The slideshow shows that the cost per seat mile for a 700 mile leg is:
$36 per seat on a 50 seater ($1800)
$16 per seat on a Max9 (179 seats) ($2864)
This is based on the assumed fuel prices at the time of this presentation.
This presentation quoted:
2019 = $2.09
2023E = $2.07
2026E = $2.20
One must look at this as opportunity cost. If you collect $200 per ticket, lets assume 4 legs (2 legs going, 2 legs back). So, only $50 applies to this flight.
The full RJ collects $2500 for a $1800 fuel cost for a profit before any other expenses of $700.
The MAX9 costs $2864 in fuel costs. At $50 per pax, that requires 57-58 pax to break even. After that, sheer profit on this scale. RJ made a profit of $700. That would require 14 more passengers.
So, if the MAX 9 booked 58+14 = 72 pax all at the same ticket price (no first class ticket increases factored in), then, they still have 107 more tickets to sell and make more. (opportunity cost) If they booked this flight full, that would generate an additional $5,350 profit on this leg alone.
What's the takeaway. The MAX9 is so fuel efficient compared to a 50 seater, that you can fly a MAX9 less than 1/2 full for cheaper than a 50 seater. Then, you have the "opportunity" to make so much more with pricing power as you try to fill the plane up.
Even more savings can be realized with frequency.
Fly (3) 50 seaters to a city today. That is 150 seats of revenue. ($1800 x 3 = $5400) to fly 15 seats to that city.
or
Fly (2) 179 seat MAX9 to that city for a total of 358 seats of revenue. ($2864 x 2 = $5728 to fly 358 seats to that city.
You sacrifice frequency, but help solve pilot shortage. It costs $328 more to fly 208 more seats a day to this city.
What do you have to do to get there? Get more MAX 9 planes to replace RJs.
United is taking 1 plane every 3.5 days to do this. (United Next)
It can't happen overnight, so you have to put a bandaid on the pilot shortage at the regionals while you get your ducks in a row to execute on this strategy above.
Just my opinion.
https://ir.united.com/static-files/0...1-720e3d8d0e82
The slideshow shows that the cost per seat mile for a 700 mile leg is:
$36 per seat on a 50 seater ($1800)
$16 per seat on a Max9 (179 seats) ($2864)
This is based on the assumed fuel prices at the time of this presentation.
This presentation quoted:
2019 = $2.09
2023E = $2.07
2026E = $2.20
One must look at this as opportunity cost. If you collect $200 per ticket, lets assume 4 legs (2 legs going, 2 legs back). So, only $50 applies to this flight.
The full RJ collects $2500 for a $1800 fuel cost for a profit before any other expenses of $700.
The MAX9 costs $2864 in fuel costs. At $50 per pax, that requires 57-58 pax to break even. After that, sheer profit on this scale. RJ made a profit of $700. That would require 14 more passengers.
So, if the MAX 9 booked 58+14 = 72 pax all at the same ticket price (no first class ticket increases factored in), then, they still have 107 more tickets to sell and make more. (opportunity cost) If they booked this flight full, that would generate an additional $5,350 profit on this leg alone.
What's the takeaway. The MAX9 is so fuel efficient compared to a 50 seater, that you can fly a MAX9 less than 1/2 full for cheaper than a 50 seater. Then, you have the "opportunity" to make so much more with pricing power as you try to fill the plane up.
Even more savings can be realized with frequency.
Fly (3) 50 seaters to a city today. That is 150 seats of revenue. ($1800 x 3 = $5400) to fly 15 seats to that city.
or
Fly (2) 179 seat MAX9 to that city for a total of 358 seats of revenue. ($2864 x 2 = $5728 to fly 358 seats to that city.
You sacrifice frequency, but help solve pilot shortage. It costs $328 more to fly 208 more seats a day to this city.
What do you have to do to get there? Get more MAX 9 planes to replace RJs.
United is taking 1 plane every 3.5 days to do this. (United Next)
It can't happen overnight, so you have to put a bandaid on the pilot shortage at the regionals while you get your ducks in a row to execute on this strategy above.
Just my opinion.
Though there are still a few unknowns.
Will the passenger be agreeable to losing 1 third of their choices?
Will we be able to fill all those extra seats or do we eat the loss?
On our side- will our pilots be able, willing and ready to do some of this RJ type flying (or SouthWest Style!)?
And what will the new company costs be? We are probably looking at a total of 25% more in pilot labor costs.
(That includes not only the new PayRates, but new Min PPD, new BFund, etc..)
In some ways, these are GREAT problems to have. But lets not kid ourselves.. these are problems!
Always
Motch
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