Continued From Previous Entry
Fleet Similarities Make Sense
After recently finishing the book, Flying High, about current CEO of JetBlue, David Neeleman and his thoughts on how to run an airline, I have concluded alongside with him that a simple fleet is the best fleet. Having a wide range in aircraft types can seriously inflate the price of maintaining and inspecting the fleet. If you have only a few types of aircraft that are newer and more fuel efficient then the costs will come down. Many airlines recognize this and have trimmed their fleets to only a few types of aircrafts. American Airlines operates a substantial MD-80 fleet, thus reducing the cost of maintaining their fleets.
Continental operates and all Boeing mainline fleet and an all ERJ regional jet fleet. Though United operates a large Boeing fleet they are moving their domestic services from a Boeing fleet to an Airbus fleet, something that might cause some conflicts but nothing too serious.
Continental Airlines United Airlines Mainline Fleet
Mainline Fleet by 2007:
777-200ER 20 747-400 30
767-400ER 16 777-200 52
767-200ER 10 767-300ER 35
757-300 17 757-200 97
757-200 41 737-500 30
737-900 12 737-300 64
737-800 105
737-700 36 A320-200 97
+18 deferred
737-500 63 A319-100 55 +22 ordered
737-300 48 (Quite a few Airbus aircrafts are for Ted.)
Total: 368 Total: 460+40= 500
Regional Jet Fleet by 2007:
ERJ-145XR 104
ERJ-145 140
Total: 274
From these comparisons you can see that the fleets are very similar. Though United has started to phase out their Boeing 737 fleet and started to replace them with an Airbus 319 and Airbus 320 fleet due to the extended range, lower fuel consumption, and the ability to place drop down video screens in the cabin.
Fleet integration is something that makes Continental a nice option. Retraining mechanics would be minimal. Inspections could continue as normal. Even maintenance facilities would continue to stay in place and operate as normal.
East Coast Network Meet Your Missing Key
Continental Airlines has been able to develop a solid product with their key hubs. The key to any successful airline is a solid hub network that flies to the destinations your passengers want to go. Continental has hubs in Newark, NJ; Cleveland, OH; and Houston, TX. These hubs allow Continental to keep a strong presence along the eastern seaboard where a fair amount of passenger traffic is generated.
United Airlines has hubs in Washington D.C; Chicago, IL; Denver, CO; and San Francisco, CA. Notice how none of United’s hubs are even close to a southern city. They are missing that key to the south. Continental is missing that key west coast hub that will allow them to expand west and possible to Asia one day. Continental is missing that upper Midwest connection too. Though their partner airlines in the SkyTeam Alliance have them covered when it comes to that, they still have no mainline or regional carriers flying to any upper Midwest or upper Mountain location, leaving them out of brand recognition when it comes to Midwestern travelers. Once travelers recognize a brand they tend to stay fairly loyal, especially if you are a competitive airline with good services and with a reasonable priced ticket.
Imagine this, European flights leaving from Chicago, Washington D.C., and Newark; flights to South America leaving from Houston, Denver, and Cleveland; and flights to Asia and Australia leaving from Chicago, Denver and San Francisco. This would create the largest hub network in the world and would allow passengers the freedom to travel anywhere in the world without having to go far from their home town.
Next Entry Will Include Meshing the Two Employee Groups
After recently finishing the book, Flying High, about current CEO of JetBlue, David Neeleman and his thoughts on how to run an airline, I have concluded alongside with him that a simple fleet is the best fleet. Having a wide range in aircraft types can seriously inflate the price of maintaining and inspecting the fleet. If you have only a few types of aircraft that are newer and more fuel efficient then the costs will come down. Many airlines recognize this and have trimmed their fleets to only a few types of aircrafts. American Airlines operates a substantial MD-80 fleet, thus reducing the cost of maintaining their fleets. 
Be careful when comparing the basic fleet types and suggesting similarities. Continental and United use different engines for many of their planes, which poses a problem for fleet integration. It can be overcome, sure, but it's a hurdle.
Continental and United both have a decent premium cabin product right now, but United's Economy Plus is a huge step up from Continental's coach. If the two were to merge, I would hope and pray that E+ survives. (That is, if they merge the two airlines into one, and don't just keep two separate airlines running within the same company, a la Air France/KLM.)
Posted by: Better Living Through Miles | June 5, 2006 11:46 AM | Permalink to Comment