BWIA among lowest ASM cost carriers

THE EDITOR: As a BWIA shareholder, I keep hearing about “low cost” carriers around the world being the target at which BWIA should aim. I am by no means a financial expert, but I know the basics of airline economics and so I decided to check for myself what exactly the BWIA numbers were in respect of employee cost per available seat mile, and how they compare with other airlines."

I have taken the numbers published in USA Today of April 1, 2003 in respect of a sample of carriers, including the two “low cost” benchmarks Southwest and Jet Blue for the second quarter of 2002. Unfortunately the BWIA annual report does not report in quarters, but the whole year, but we can still get a general idea of how BWIA compares. The BWIA 2002 number is derived from the numbers published in the BWIA 2003 New Business Model (which has at least one apparent error in it, coincidentally in the operating cost table). I derived two charts, one the relative costs of a mix of carriers for 2Q/02, and then another with Southwest, BWIA and Jet Blue for the years 2000, 2001, 2002.

I only found the Jet Blue report for 2002. I could not find Southwest 2002 in a simple check on the internet, and BWIA’s 2002 report will soon be out, but we can accept that the numbers in the New Business Model will probably be reasonably close. The surprising outcome is that BWIA, with all its  faults, is, and always was, right in there with the lowest cost carriers in terms of employee costs per ASM. I am sure the accountants out there will be able to pick my simplistic analysis to shreds, so I await their comments with interest. If am proven right, then the search for the causes of BWIA’s losses is going to have to move to new areas.

SIMON KELSHALL
Port-of-Spain