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Independence Air reports August load factor 72.2%

Independence Air reports August load factor 72.2%

 
Old Oct 5, 05, 6:48 am
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Independence Air reports August load factor 72.2%

Independence Air reported their August load factor was 72.2% which is very good considering all the bad financial news.
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Old Oct 5, 05, 7:27 am
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And all the service reductions.
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Old Oct 5, 05, 7:33 am
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The operational performance was also excellent for September if you look farther down the press release. DH should make a good showing on the September DOT rankings.

From press release...
In addition, Independence Air will report the best operational results in its 15-month history for the month of September. On-time arrivals (as per Department of Transportation standards) were at 87.7 percent for the month -- 3.1 points higher than the previous best. Baggage handling was also a record, with mishandled bags reported at a rate of only 2.7 per 1,000 passengers, compared with the previous low of 2.9/1,000. The airline canceled only 0.3 percent of its scheduled flights, equal to its lowest-ever total.
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Old Oct 5, 05, 12:07 pm
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There is simply no way that an August load factor of 72.2% is anything but bad news. If they can't fill their planes in August, they have no hope of filling them in the fourth quarter. If I were a creditor, I'd be inclined to start pulling at the plug.
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Old Oct 5, 05, 12:10 pm
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Originally Posted by EricH
There is simply no way that an August load factor of 72.2% is anything but bad news. If they can't fill their planes in August, they have no hope of filling them in the fourth quarter. If I were a creditor, I'd be inclined to start pulling at the plug.
Agreed. I applaud DH for the downward pressure that they put on fares, but a 72.2% load factor on 'unsustainably low' fares is nothing to cheer about. Thier on-time performance is laudable as well but this has to be the beginning of the end...
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Old Oct 5, 05, 12:22 pm
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also...

You also have to remember that the load factor is somewhat exagerated (by how much I do not know) by the fact that some percentage of those flights were filled by glide pass customers who otherwise would not have been flying. Even though the airline was making more revenue than had those pax not been on the plane, it still seems almost misleading to include them in the load factor.
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Old Oct 5, 05, 12:40 pm
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Lightbulb agreed

Originally Posted by shotime1
You also have to remember that the load factor is somewhat exagerated (by how much I do not know) by the fact that some percentage of those flights were filled by glide pass customers who otherwise would not have been flying. Even though the airline was making more revenue than had those pax not been on the plane, it still seems almost misleading to include them in the load factor.
Not to mention that service reductions would in essence artificially inflate load factor by removing those under-performing flights which presumably have low loads.

This is not to say that flights have to be empty to perform poorly, but I suspect that they were fairly empty.
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Old Oct 5, 05, 4:42 pm
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I agree with your analysis.
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Old Oct 7, 05, 8:52 pm
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Originally Posted by 90minfromJFK-CDG
Not to mention that service reductions would in essence artificially inflate load factor by removing those under-performing flights which presumably have low loads.

This is not to say that flights have to be empty to perform poorly, but I suspect that they were fairly empty.
I would not call that an 'artificial' inflation of load factors. It is more of a business process alteration that would (hopefully) increase load factors.


However, reduction in flights is not guaranteed to increase load factor. When ATA went chapter 11, they cancelled a lot of underperforming flights, and saw system load factor go down in some months (compared to same months in previous year.) We wont know how these reductions pan out until the load factors are announced in a few months.
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Old Oct 8, 05, 1:04 am
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Originally Posted by L Dude 7
I would not call that an 'artificial' inflation of load factors. It is more of a business process alteration that would (hopefully) increase load factors.


However, reduction in flights is not guaranteed to increase load factor. When ATA went chapter 11, they cancelled a lot of underperforming flights, and saw system load factor go down in some months (compared to same months in previous year.) We wont know how these reductions pan out until the load factors are announced in a few months.
Seems like there is a semantic issue here. 'Artificial' or not, DH's load factors are unsustainably low and there seems to be no compelling evidence to suggest that load factors or their 'contribution margin' (to steal an accounting term) will increase in the near future. The very little touchy feely part of me wants to see DH survive because of their plucky, stick it to the legacy attitude, but the practical side of me says no way.
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Old Oct 10, 05, 8:30 am
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Originally Posted by 90minfromJFK-CDG
Seems like there is a semantic issue here. 'Artificial' or not, DH's load factors are unsustainably low and there seems to be no compelling evidence to suggest that load factors or their 'contribution margin' (to steal an accounting term) will increase in the near future. The very little touchy feely part of me wants to see DH survive because of their plucky, stick it to the legacy attitude, but the practical side of me says no way.
Southwest's load factor for September was 67.4%
FlyI's load factor for September was 65.2%

That is not a huge difference in load factor from the airline with the longest consistent streak of profitability. This load factor could be sustainable if costs were in order and the business plan were solid. Unfortunately, FlyI has higher fixed operational costs - RJs, no fuel hedging, costly delay-prone east coast airports (sure they have a high on-time percentage - but look at the 'scheduled time': IAD-BOS is 1:45, on WN STL-OKC is a longer flight but only 1:15 scheduled time.) Most of Southwest's passengers fly non-stop, and when they do connect, they generally tend to be in the same direction (or even the same plane). With multiple 'hubs', this is easy. However, with DH, there is only one hub, and many connections end up backtracking. DH must compete with other airlines that have shorter, and thus less costlier routings. IF FlyI can get its costs down then there may be a future...
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Old Oct 10, 05, 1:31 pm
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Two words doom Independence Air (and the reason why their costs can't be low): Regional Jets.

Regional Jets are not cheap aircraft to operate.
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