harrell associates – (212) 358-1709 [email protected] 1 30th annual faa aviation forecast...

Harrell Associates – (212) 358-1709 [email protected]

1

30th Annual FAA Aviation Forecast Conference March 18, 2005

Mainline Air Carrier & Regional/Commuter Breakout Panel:

Yield Trends

Bob Harrell -- Harrell Associates – New York City


2

Discussion Outline

• Database & Methodology• Yields by Trip Length – 4 Groupings

» Short, Medium, Long, Transcon• Yields by Carrier Type

» Legacy Carriers vs. Low Cost Carriers (LCCs)• Yields by Origin City

» All Cities» Cities with 5 or More Routes» High/Low Routes

• Questions and Discussion


3

Database & Methodology

• Top 40 Directional Routes – Sized by DOT Revenue• 7 Major Carriers – 280 Directional Routes

» AA/DL/UA/CO/US/NW/HP

• Regular Business Fares» Fare generally used by the business traveler.» Refundable, No minimum stay, Advance purchase not to exceed 3 days

• Lowest One Way Fare – In effect on report date -- Weekly• Yield – Based on DOT Mileage

» $/Mile» Min/Max Range

– By Trip Length Group– Position within Range -- % (1 – 100%)


4

Yields Over Time – Short TripsLCC vs. Majors - Over Time -- Short Trips

$0.32$0.30 $0.31 $0.32

$0.97 $0.98

$1.04

$0.84

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20C

ost

per

Mile

LCC S Big 6 S

LCC S $0.32 $0.30 $0.31 $0.32

Big 6 S $0.97 $0.98 $1.04 $0.84

2002 2003 2004 Mar 2005


5

Yields Over Time – Medium TripsLCC vs. Majors - Over Time -- Medium Trips

$0.23$0.20 $0.21 $0.21

$0.72 $0.73$0.70

$0.43

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80C

ost

per

Mile

LCC M Big 6 M

LCC M $0.23 $0.20 $0.21 $0.21

Big 6 M $0.72 $0.73 $0.70 $0.43

2002 2003 2004 Mar 2005


6

Yields Over Time – Long TripsLCC vs. Majors - Over Time -- Long Trips

$0.15 $0.15 $0.15 $0.16

$0.61$0.60

$0.58

$0.33

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

Cos

t pe

r M

ile

LCC L Big 6 L

LCC L $0.15 $0.15 $0.15 $0.16

Big 6 L $0.61 $0.60 $0.58 $0.33

2002 2003 2004 Mar 2005


7

Yields Over Time – Transcon TripsLCC vs. Majors - Over Time -- Transcon Trips

$0.08 $0.08 $0.08 $0.08

$0.43

$0.47

$0.39

$0.23

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

$0.45

$0.50

Cos

t pe

r M

ile

LCC T Big 6 T

LCC T $0.08 $0.08 $0.08 $0.08

Big 6 T $0.43 $0.47 $0.39 $0.23

2002 2003 2004 Mar 2005


8

Premium Over Time – Short TripsLCC vs. Majors - Yield Premium Over Time -- Short Trips

206%

231%237%

162%

0%

50%

100%

150%

200%

250%

Cos

t pe

r M

ile

Big 6 % Prem v. LCC S

Big 6 % Prem v. LCC S 206% 231% 237% 162%

2002 2003 2004 Mar 2005


9

Premium Over Time – Medium TripsLCC vs. Majors - Yield Premium Over Time -- Medium Trips

209%

257%

239%

103%

0%

50%

100%

150%

200%

250%

300%

Cos

t pe

r M

ile

Big 6 % Prem v.LCC M

Big 6 % Prem v. LCC M 209% 257% 239% 103%

2002 2003 2004 Mar 2005


10

Premium Over Time – Long TripsLCC vs. Majors - Yield Premium Over Time -- Long Trips

315%302%

292%

112%

0%

50%

100%

150%

200%

250%

300%

350%

Cos

t p

er M

ile

Big 6 % Prem v. LCC L

Big 6 % Prem v. LCC L 315% 302% 292% 112%

2002 2003 2004 Mar 2005


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Premium Over Time – Transcon Trips

LCC vs. Majors - Yield Premium Over Time -- Transcon Trips

444%

492%

423%

187%

0%

100%

200%

300%

400%

500%

600%C

ost

per

Mil

e

Big 6 % Prem v. LCC T

Big 6 % Prem v. LCC T 444% 492% 423% 187%

2002 2003 2004 Mar 2005


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Yields Over Time – Short TripsLCC vs. Majors - Over Time -- Short Trips

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

Cos

t pe

r M

ile

LCC S AA S DL S UA S CO S NW S US S HP S

LCC S $0.32 $0.30 $0.31 $0.32

AA S $0.00 $0.00 $0.00 $0.00

DL S $0.98 $0.90 $1.01 $0.80

UA S $0.77 $0.84 $0.81 $0.59

CO S $1.24 $1.32 $1.27 $1.03

NW S $0.95 $0.99 $1.00 $0.83

US S $0.94 $0.86 $1.09 $0.93

HP S $0.55 $0.40 $0.34 $0.42

2002 2003 2004 Mar 2005


13

LCC vs. Majors - Over Time -- Medium Trips

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00

Cos

t p

er M

ile

LCC M AA M DL M UA M CO M NW M US M HP M

LCC M $0.23 $0.20 $0.21 $0.21

AA M $0.85 $0.82 $0.84 $0.52

DL M $0.71 $0.74 $0.65 $0.47

UA M $0.89 $0.92 $0.78 $0.40

CO M $0.61 $0.65 $0.68 $0.43

NW M $0.64 $0.66 $0.66 $0.53

US M $0.63 $0.59 $0.60 $0.26

HP M $0.36 $0.36 $0.37 $0.39

2002 2003 2004 Mar 2005

Yields Over Time – Medium Trips


14

LCC vs. Majors - Over Time -- Long Trips

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

Cos

t p

er M

ile

LCC L AA L DL L UA L CO L NW L US L HP L

LCC L $0.15 $0.15 $0.15 $0.16

AA L $0.70 $0.65 $0.68 $0.36

DL L $0.58 $0.52 $0.55 $0.35

UA L $0.59 $0.61 $0.45 $0.25

CO L $0.62 $0.65 $0.66 $0.39

NW L $0.57 $0.54 $0.55 $0.32

US L $0.00 $0.00 $0.00 $0.00

HP L $0.30 $0.20 $0.15 $0.19

2002 2003 2004 Mar 2005

Yields Over Time – Long Trips


15

LCC vs. Majors - Over Time -- Transcon Trips

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60C

ost

per

Mile

LCC T AA T DL T UA T CO T NW T US T HP T

LCC T $0.08 $0.08 $0.08 $0.08

AA T $0.44 $0.46 $0.37 $0.21

DL T $0.50 $0.51 $0.33 $0.23

UA T $0.50 $0.45 $0.44 $0.23

CO T $0.43 $0.40 $0.25 $0.20

NW T $0.21 $0.48 $0.48 $0.23

US T $0.48 $0.49 $0.49 $0.25

HP T $0.29 $0.25 $0.26 $0.23

2002 2003 2004 Mar 2005

Yields Over Time – Transcon Trips


16

Relative Yields by CityCity Count % Range Rank PIT 4 91% 1CLT 3 77% 2MIA 3 72% 3DFW 12 69% 4MSP 11 58% 5ORL 9 58% 6HOU 4 56% 7BOS 20 54% 8NYC 24 53% 9EWR 18 51% 10WAS 15 49% 11ATL 14 48% 12DEN 10 47% 13DTT 10 46% 14FLL 4 43% 15SFO 15 42% 16SJC 4 42% 17CHI 18 39% 18TPA 5 38% 19PHL 15 31% 20PHX 17 31% 21LAX 17 30% 22BWI 3 21% 23LAS 11 18% 24


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Company Information – Harrell AssociatesBob Harrell

Harrell Associates89 Washington PlaceNew York, NY 10011

Telephone: 212-358-1709 Fax: 212-656-1696E-mail: [email protected] Website: www.HarrellAssociates.com

Company Profile and Brief BiographyHarrell Associates focuses in two areas: Airfare and Airline Industry Consulting and Travel Industry Public

Relations. It is currently providing benchmarking and media relations consulting on the travel and airline industries to a number of major financial institutions including: American Express, Goldman Sachs and Merrill Lynch.

Harrell Associates also engages in ad hoc consulting and market research projects in the travel industry.

Mr. Harrell has extensive experience both with the distribution and supplier side of the travel industry. At American Express, where he worked as a vice president for more than 7 years, he was responsible for the Airfare Management

Unit and Airline Supplier Relations. Prior to that, he was with Pan American Airways for more than 15 years.

harrell associates – (212) 358-1709 [email protected] 1 30th annual faa aviation forecast...

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