December 14, 2009

Telegram Story

Click here for the story. Good story, but a couple things that were not able to make the story. First Steve Foley was able to download numbers from the Department of Transportation site for the first 7 months of this year.

  1. January, 2009 26 flights 1615 passengers 3874 seats
  2. February, 2009 24 flights 2248 passengers 3576 seats
  3. March, 2009 25 flights 1898 passengers 3347 seats
  4. April, 2009 31 flights 2401 passengers 4106 seats
  5. May, 2009 24 flights 1726 passengers 3171 seats
  6. June, 2009 20 flights 1720 passengers 2656 seats
  7. July, 2009 9 flights 971 passengers 1341 seats

12,579 passengers out of a possible 22,071 seats equates to a 56.99% load factor.

Secondly, I tried to emphasize how Cape Air with their JetBlue code sharing would have been perfect for ORH like it has been for Hyannis. Would have like to have seen some answers from the Airport Director as to why this has not happened.


JSF said...

Did you ever hear the numbers that Direct Air reported? I recall there was a difference between the figures I got from the Bureau of Transportation Statistics and what Allegiant had published.

Jahn said...

I just quickly glimpsed at that story for 10 seconds and immediately it hit me when the reporter stated something to this effect....and I paraphrase........52,000 passengers passed through the airport in a particular year...MMMMMMMMM... .ok so what ??

Somwhat misleading IMO when one is writing a story about Direct Air at the airport.

As you point, it s/b more about Direct Airs #'s.

Do we still get teh $100,000(?) annually from Washington if we reach a certain commercial air passenger threshold................was it 10,000 passengers?

Businesses rarely reach 100% capcity, as 100% is about perfection...........but can a business truly operate long term with a 57% capacity utilization factor? Especailly a business that is heavy fixed costs. Heavy fixed costs business are very, very volume sensitive. Evidentally, so far I guess the answer is yes for DA at the airport

Soooooooooooooooo....Massport is taking over our airport....?????........has anyone lately asked exactly when? I would guess it wont now happen until at least July 1st, 2010 which is the start of Beacon Hills nex (2011) fiscal year????

Do we need to draw up a list of the major projects that have been fermenting in Worc now for the past few years and for how long they have sat on the back burner or are still sitting in the refridgerator?


City Sq.

Massport Takeover.

Mason St.

Canal District

If only some of these projects could come to fruition as rapidly as we can erect low income housing........

JSF said...

Jahn wrote:
"can a business truly operate long term with a 57% capacity utilization factor? Especailly a business that is heavy fixed costs. Heavy fixed costs business are very, very volume sensitive. Evidentally, so far I guess the answer is yes for DA at the airport"

This is exactly why I like Direct Air's business model. They were stumbling along at 57%, so decided to drop the expensive Virgin equipment, and switch to less expensive aircraft. I suspect if the numbers were higher, they would have kept the leather seats.

If the numbers continue to decline, they can switch to smaller, less fuel hungry aircraft.

Bill Randell said...

Steve at 57%, I just dont see how they can make any money. In fact I think they got to be losing alot of money at 57%

JSF said...

If they were losing money, could they still plug along after a year?

I don't think they have the cash reserves to sustain a loss for that long. If they were losing money, they would roll up their operation and go home.

I'm sure they know exactly what their break even point is, and if they drop below that for too long, they're gone. In the meantime, they keep flying.

Bill Randell said...

It would depend on how much we spent of the DOT Small COmmunity Air Service grant to subsidize their operation.

This winter is key. If the loads are 57%, I just don't see how they can possibly keep it going.


Jahn said...

JSF, lowering their plane rental costs obviously helps any airline or business. They are still stuck with the 57% capacity utilization factor though.

When they rented diff. planes, were they also smaller planes which would end up increasing their utilization factor assuming the same number of passengers flew on smaller capacity planes.

It still puzzles me that they rent their aircraft from otHER. carriers. fROM MY PERSPECTIVE this indicates an inabilty to finance the purchase of their own assets (planes). It's similar to leasing a car for 36 months because you cannot afford the upfront money to buy one or cannot get the credit to buy one.

Anonymous said...

Starting an airline and flying your own planes normally takes 1-2 years and $5-6M. It isn't cheap and frankly, the extra money they spend on chartered aircraft, they save in overhead.

They are not making money at 57%. The only markets that make money at those loads are routes to the Caribbean and South America that have limited frequencies.