klm617 wrote:johns624 wrote:If they are shifting so much Asian flying to ATL, why are the A350's based in DTW?
Because they want to reduce capacity at DTW by replacing the 744. Those seats are being shifted to ATL . It is by no coincidence that the flights that were a 744 ICN and PVG and are switching now to an A350 will both be liked to ATL now with nonstops. Why didn't KE add Detroit 3 X weekly to pick up that slack instead they are now sending those lost connections over ATL. I anwser to your question as to why the A350 will be based at Detroit simple answer they want international capacity to be further eroded at Detroit. To say the 744 was too big for it's Asia routes is simply not true because as you see they just shifted the capacity to another hub. What Mr. Bastian meant was the 744 was to large to link ATL to Asia as the volume indicated that the 744 was not to big it was just to big for ATL service. Had the route not warented a plane the size of the 744 out of Detroit that capacity would not have been made up with the new ATL flights. If Delta would have operated the 777 over ATL and the 744 over Detroit then yes you would have an over capacity situation so DTW to Asia had to be reduced to make ATL Asia viable.
At the risk of feeding the troll, please let me enlighten you on the economics of flying 744's to Asia. They are not good. At NW we realized that we had too many seats on a single flight to Asia because of the 744's capacity. The large number of seats caused us to sell discounted seats to fill the aircraft. At one time the 744 made sense, but as numerous posters have explained to you, the dynamics of USA-Asia flying has changed. Think about this- is UA trying to shaft ORD and SFO by parking their 744's and replacing them with 777's and future A350-10's? No- they are following the same strategy. Right sizing the aircraft to the new market dynamics.
In any event, NW's use of the 744 drove down it's Revenue Per Passenger Mile, also known as Yield. Why did yield decline? Why did NW receive less average revenue per mile that each passenger flew than it's competition?
Because we had too many seats to fill. (I know this- because I used to fill them) To fill those seats- we discounted them, offering many of them to consolidators (bucket shops) at deeply discounted prices. Those low yield passengers helped fill the plane, but flying a large plane full of low-yield passengers does not lead to long-term financial stability. Putting cheap butts in excess 744 seats drove down our yield. Higher Yield translates into higher Net Profit. Higher Net Profits translates in to lower borrowing costs, and more money to invest in aircraft and staff. In the end, airline profitability is all about passenger yield.
The A350 is the right sized aircraft for the market. The 744 is/was TOO LARGE. If it was the right size- I guarantee you that DL would have placed an order for 748i's and used them to replace 744's.
The carrier with the highest yield will generally be the most successful long-term. Many components go into why one carrier generates higher yield than another. ( i.e. Good customer service generates more high yield business traffic). But the fastest way to reduce yield, and decrease overall profitability is to fly too many seats in a particular market. And the the way to long-term profitability is via capacity discipline. DL usually refuses to chase low-yield traffic in ALL their markets, just not DTW. Instead they make use of the multiple sized AC in their fleet to right-size capacity. And note that they have cancelled Asia service from SFO and JFK too. They had lousy yields. Those assets were moved to where they can generate the highest yield (and net profits)- which then allows DL to make capital investments and raise salaries above post-bankruptcy levels.
So there is no high-yield "slack" in DTW for KE, DL, KL, or anyone else for that matter right now to pick up. There might be low-yield slack....but you cannot run an airline long-term of low yields. Each airline has a route planning department full of number cruncher's trying to maximize the return on capital. They have much more operating, passenger, and cost data that anyone on Airliners has. When they see an opportunity- they strike. And the people in Route Planning are reviewed by senior management on overall flight profitability. And they don't care if the flight leaves from DTW OR ATL.
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