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stlgph
Posted: Fri Feb 23, 2007 04:54:54 pm
Member
Joined: 27 Jun 2005
Posts: 333
Location: St. Louis, MO
In 2007 Alone -
Charleston
Daytona Beach
Phoenix
San Diego
Saint Louis
Stewart
White Plains
+ one more expected this spring
Attempting to take over Midwest Airlines.
In 2005, service came to Indianapolis with four flights per day ... quickly escalating into expanded service into four additional Florida cities ... then expansion of additional frequencies and the connections out to west coast cities.
Should AirTran slow it down ... should they have stuck to "the guns" of their proven markets ... such as Indianapolis, Baltimore, etc., running service, connecting the dots and seeing the full potential
OR
Does the idea of spreading the wings, channeling as many people as possible into the network and route system the best thing for them to do?
So ...
A) Is AirTran growing too fast?
B) Does AirTran need to expand its name presence in order to get anywhere?
C) Could AirTran handle a JetBlue-esque melt down?
Indy
Posted: Fri Feb 23, 2007 06:57:07 pm
Site Admin
Joined: 15 Jun 2005
Posts: 2316
Location: Indianapolis, IN
AirTran needs to take a step back and figure out who they are. Are they Frontier with a hub & spoke system? Or are the Southwest with a mess of focus cities? AirTran can't seem to pick a side. They are just all over the place. There seems to be no real rhyme or reason to their route selections.
Food4Geeks.com - Even Geeks Like To Eat.ATAIndy
Posted: Sun Feb 25, 2007 03:19:48 pm
Member
Joined: 15 May 2006
Posts: 728
Location: West Lafayette, IN
I'd say connect the dots, becuase if you grow to fast you can end up with empty planes... just look at what happened to Independence Air (I know thats only one of the reasons to the collapse, but it is an important reason). So my advice to FL is take it slow and grow where growth is needed.
Why do my favorite airlines end up going defunct??http://web01.jetphotos.net/showphotos.php?userid=16657
http://myaviation.net/search/search.php?uid=8779
http://www.flickr.com/photos/ataindy/
stlgph
Posted: Wed Feb 28, 2007 05:48:17 pm
Member
Joined: 27 Jun 2005
Posts: 333
Location: St. Louis, MO
Our friends at Midwest have their opinions of the questions...
AirTran's Business is Deteriorating
AirTran's low-cost carrier business model is in trouble. By virtually any metric, AirTran's business is deteriorating. AirTran is desperate to buy Midwest to stave off further erosion of its business.
-- AirTran's profits are deteriorating while Midwest's are improving. For
the last half of 2006, AirTran's earnings per share (EPS) dropped
$0.09, year over year, to a $0.09 per share loss. During that same
period, Midwest's EPS improved $2.58 to a positive $0.25 cents per
share.
-- AirTran's share price lags behind its peers and Midwest. Between
January 3, 2006 and February 27, 2007, the average share price of low-
cost carriers is down 7.7%, while the average share price of network
carriers is up 35.5%. Midwest's share price is up an impressive 156.1%
in the same period, compared to an unattractive 35.8% loss of value for
AirTran's shareholders.
-- AirTran's earnings continue to disappoint while Midwest's show strong
momentum. AirTran has failed to show a profit in three of the last four
quarters, while Midwest has been profitable in three of the last four
quarters. In an effort to obscure its own current poor performance,
AirTran's statements about Midwest focus on years-old data that is
heavily influenced by the after-effects of 9/11, which devastated the
airline industry.
-- AirTran's load factors are on a downward track. AirTran's load factor
declined 0.7 percentage points in 2006 and declined again in January
2007, down 1.6 percentage points. On the other hand, Midwest's load
factor increased 5.2 percentage points in 2006, with increases of 6.6
percentage points in December 2006 and 3.8 percentage points in January
2007, placing Midwest among industry leaders in load factor
improvement. AirTran's declining load factors reflect a pattern of
excessive capacity expansion leading directly to lower unit revenue,
lower profits and lower value for AirTran shareholders.
-- AirTran appears to be focused on adding capacity, not profits. In the
last half of 2006, Midwest's revenue per available seat mile (RASM) was
12.40 cents -- a 12.1% improvement from the last half of 2005.
AirTran's RASM was 9.54 cents in the last half of 2006 -- down 2.1%
from the same period of 2005. AirTran's deteriorating RASM performance
underscores its inability to efficiently utilize its existing capacity.
To further compound the problem, AirTran has committed to purchasing an
additional 60 planes with no clearly articulated strategic plan to
deploy and utilize these planes on a profitable basis.
ATAIndy
Posted: Wed Feb 28, 2007 09:47:27 pm
Member
Joined: 15 May 2006
Posts: 728
Location: West Lafayette, IN
There's some scary information in that report.
Why do my favorite airlines end up going defunct??http://web01.jetphotos.net/showphotos.php?userid=16657
http://myaviation.net/search/search.php?uid=8779
http://www.flickr.com/photos/ataindy/
stlgph
Posted: Sun Mar 04, 2007 05:51:58 pm
Member
Joined: 27 Jun 2005
Posts: 333
Location: St. Louis, MO
It's a fun read.
Midwest isn't entirely innocent either. They've had their troubles, but I think they did hit on a few points ...
1. AirTran's promised services (a la Dallas, etc.)
2. AirTran continues to add add add and add when they should really slow down.
Midwest slowed down and it looks like they're chugging along at a comfortable pace these days. Give it a few weeks, of course, and we shall see.
I don't think the next financial reports for either airline will be all that fantastic. Of course, I could be wrong.
I think Delta and Northwest should have been good wake-ups to AirTran...plugging and plugging more flights keeps your people moving and your planes going, but doesn't necessarily mean that all that revenue coming in because your plane is doing another cycle is going to be kept in the pockets.