DELTA fact or fiction.

[General Lee]

Revenue is revenue. That revenue is used to pay fuel costs. Whether the airlines are competing for a Brit paying in pounds in England, a Frenchman paying in euros in France, or a New Yorker paying in dollars in the US, at the end of the day the airlines are competing for the revenue each passenger pays. If an airline from Europe comes to the States for its revenue, that revenue will be paid in dollars.

I agree that open skies could harm american airline careers, depending on how it's written, but not for the reasons you state.

If Lufthansa wants to go to Little Rock, AR, then good for them. Open Skies allows carriers to go anywhere between the US and Europe, assumming there are gates and slots available. Look, most US airlines can't really go to LHR thanks to the lack of gates and slots, and that is the same for any of the European airlines wanting to go to coveted US airports. Do you see a lot of gates open at JFK during peak times? Do you see any gates at ORD or BOS? How about IAD? Not really. There will not be huge expansion from those airlines over there, unless they want to go to Providence, Newburgh, Tampa, etc. The big cities in the US do not have a lot of extra room for new flights, just like London Heathrow doesn't have the room. But, if Lufthansa wants to start Brussels to JFK, they will have to find a gate and maybe move flights around to offer a departure at a peak time that allows business people in Manhattan the time to ride in cab all the way to JFK. Great idea, but most incumbant airlines at the hubs will remain dominate. (Just like BA and Virgin will at Heathrow)

Bye Bye--General Lee

 

[flaps30]

or they partner with B6 and connect in JFK.

 

[400ADude]

or they partner with B6 and connect in JFK.

Very good point

 

[General Lee]

or they partner with B6 and connect in JFK.

They can connect in JFK, but even Terminal 5 won't have many (if any) INTL gates, so it will be a wash. Right now the deal is only a financial deal, not any codeshare etc. The problem is JFK and the lack of gate space and soon to be slots. Regardless, Lufthansa and others will have to find new cities open to INTL traffic, away from the larger cities with less gates and slots available. Lufthansa also is taking the widebody part of the equation away from Jetblue. It is very unlikely now that they will EVER have anything larger than an A320---since Lufthansa will be happy to do anything across the pond for them.(I recall a rumor that had Jetblue possibly getting A330s etc to maybe get some INTL revenue---now very unlikely)



Bye Bye--General Lee

 

[General Lee]

Very good point

How many flights does Lufthansa have a day into JFK? Four. Maybe with this deal they will raise it to six, if they can find gate space large enough and get a slot for takeoff. How many do they have to BOS? Two. Maybe with Open Skies they will raise it to three.

Bye Bye--General Lee

 

[bleagle]

If Lufthansa wants to go to Little Rock, AR, then good for them. Open Skies allows carriers to go anywhere between the US and Europe, assumming there are gates and slots available. Look, most US airlines can't really go to LHR thanks to the lack of gates and slots, and that is the same for any of the European airlines wanting to go to coveted US airports. Do you see a lot of gates open at JFK during peak times? Do you see any gates at ORD or BOS? How about IAD? Not really. There will not be huge expansion from those airlines over there, unless they want to go to Providence, Newburgh, Tampa, etc. The big cities in the US do not have a lot of extra room for new flights, just like London Heathrow doesn't have the room. But, if Lufthansa wants to start Brussels to JFK, they will have to find a gate and maybe move flights around to offer a departure at a peak time that allows business people in Manhattan the time to ride in cab all the way to JFK. Great idea, but most incumbant airlines at the hubs will remain dominate. (Just like BA and Virgin will at Heathrow)

Bye Bye--General Lee

March 30, 2008 will be the beginning of many changes in the industry. T5 will open at LHR ...essentially opening up gates at T1 and T4
http://www.baa.com/portal/site/default/menuitem.9117dc974bda4acc0fb42410c02865a0/

ALSO.... BMI/UAL codeshare agreement begins on the same date 30MARCH2008....
http://news.corporate.findlaw.com/prnewswire/20071106/06nov20071842.html

and remember OUTSOURCING (as well as bankruptcy)is THE tool that most legacies used to lower operating costs... and even DAL hired advisers to evaluate potential merger partners. Essentially, mergers are a further tool in eventually reducing costs while gaining more market.

As far as gates/slots, what is to stop a legacy like UAL from parking planes (reducing costs) and utilizing BMI to maintain domestic capacity.

Why is approx. 50% of DAL domestic service contracted to regionals? Is it b/c of flat domestic sales/revenue? What can we expect in 2008?

I hate sounding like downer debbie but I am wondering what 2008 will bring and how we can prepare for what could be a tighter airline industry.

 

[fareview]

Burn the same fuel.... But companies like EMIRATES don't burn the same MONEY for fuel. I think they pay like .30/gallon. While we pay 2.00 and higher for fuel...

Source?

fv

 

[General Lee]

March 30, 2008 will be the beginning of many changes in the industry. T5 will open at LHR ...essentially opening up gates at T1 and T4
http://www.baa.com/portal/site/default/menuitem.9117dc974bda4acc0fb42410c02865a0/

ALSO.... BMI/UAL codeshare agreement begins on the same date 30MARCH2008....
http://news.corporate.findlaw.com/prnewswire/20071106/06nov20071842.html

and remember OUTSOURCING (as well as bankruptcy)is THE tool that most legacies used to lower operating costs... and even DAL hired advisers to evaluate potential merger partners. Essentially, mergers are a further tool in eventually reducing costs while gaining more market.

As far as gates/slots, what is to stop a legacy like UAL from parking planes (reducing costs) and utilizing BMI to maintain domestic capacity.

Why is approx. 50% of DAL domestic service contracted to regionals? Is it b/c of flat domestic sales/revenue? What can we expect in 2008?

I hate sounding like downer debbie but I am wondering what 2008 will bring and how we can prepare for what could be a tighter airline industry.

First off Heathrow. Do you really think only American Airlines like Delta, Continental, and USAir will get all of the gates at T-1 and T-4? We were all given 3-4 slots, period. Delta got 3, CAL bought 4, USAir got 1, and NWA got 3. Don't you think AA and UAL would try to get more at those terminals too? How about every other country in the World? Emirates would love to have a few more gates and slots, and they can easily afford them.

BMI/UAL. The difference between BMI/UAL and B6/LH is that BMI already has widebodies. They fly A330s from MAN to LAS, ORD, and the Carribbean, along with A330s from Heathrow to Saudi Arabia. They easily have the ability to move those A330s from MAN to Heathrow, since they are the number 2 airline at Heathrow in terms of slots. Jetblue doesn't have any widebodies, and Lufthansa will make sure they offer to always fly anything large across the Atlantic. What is United gaining from a BMI codeshare at LHR, anyway? They already fly from IAD to every large city in Europe, and same with ORD. What they gain is some small feed to Scottland and Northern Ireland. (Edinburough, Glasgow, Aberdeen, Durham Tees, and Belfast) Every other city BMI flies to from LHR United does too.

Why did Delta hire advisors for possible mergers? They were forced to when Pardus Capital brought it up. Also, in the BK proceedings, the board thought it would be a good idea to look at every angle on how to maximize our worth. A merger might help, or it might hurt. I am sure they hired a few people to look at it. Gordon Bethune looked at the USAir merger for our board, and didn't like it at the time. (political pressure didn't help him). Now he "likes" a United and Delta merger, thanks to Pardus Capital paying him.

What do you mean by BMI maintaining domestic capacity? BMI cannot fly intra United States. Nope. They also aren't a very big airline. How many planes do you think they have? BMI stands for British Midlands---the Midlands of England are around Manchester. They are not a very big player in Europe, but they do have a lot of LHR slots.

Why is 50% of our domestic capacity with the regionals? Good question. Ever think that could be why we went into BK? Did you know that we are parking 35 RJs, and actually adding mainline capacity back this next year. We are getting 9 MD90s from Japan (from JAS airlines, based at Tokyo Haneada airport), and 7 737-700s for the domestic arena, and 4 777LRs for the INTL (along with the rest of the 15 total 757ERs from AA/TWA). Those MD90s will be doing all domestic flights, and taking back some of the RJ routes. The 737-700s (there will eventually be 20--25 of them) will do high airports (like Vail, CO) and some INTL stuff in Central America. Anderson knows that too many RJs can hurt us, especially uneconomical 50 and 37 seaters. Also, a CR9 or E170 takes up a valuable gate, one that could have an MD90 instead bringing in more revenue, and that MD90 costs less than a CR9 too. ($9 million total cost with engines)

Actually, 2008 may not be a downer in terms of mergers. A story popped up earlier that stated airlines might want to think about merging NOW instead of 08 because a new Justice department may come along if a Democrat is elected in late 08, and this one may NOT rule on anything until they think there might be another Republican in office. Also, I think one big merger could cause a lot of other ones, and the Government may not want everyone merging. Could there be mergers in 08? Maybe. Will there have to be mergers? I don't think so. Maybe some LCCs will merge thanks to the flat domestic market.

Bye Bye--General Lee

 

[Sedona16]

or they partner with B6 and connect in JFK.

Barger said he did not foresee any initial strategic benefits to the German carrier. JetBlue's interest in an alliance remains limited to its effort to cement a transatlantic marketing relationship with Aer Lingus (ATWOnline, Feb. 7), which Barger said would be finalized "in the very, very near future." The LCC's new Terminal 5 at JFK was not designed to accommodate Lufthansa's widebody aircraft or a full customs area, and Barger reiterated that there is no codeshare or interline agreement between the airlines. "Our goal is still one of organic growth," he said. "We were certainly looking at liquidity opportunities both this year and next year and this was certainly one of those opportunities and it seemed like the right one."

http://www.atwonline.com/news/story.html?storyID=11161

 

[bleagle]

Source?

fv

Well, the chairman of emirates is Sheikh Ahmed bin Saeed Al Maktoum whose family just happens to owe "just a couple of oil fields in Qatar"... the same family who funded the start of Emirates in 85.

Again, an emirates pilot told me about the .30 cost in DUBAI but the point really is about NET Fuel costs and really some advantages that foreign carriers now enjoy. Actually, I believe that as the economy becomes more global that even their cheaper labor costs will change and become more expensive.

I am waiting for a response from my source but he was proudly mentioning the fact that the government owned airline has some costs advantages operating out of Dubai....