SWA plan for 15% ROIC

[humveedriver]

http://centreforaviation.com/analys...-to-meet-previously-missed-roic-targets-94624

Here is the part about labor;


Presently, salaries, wage and benefits comprise about 29% of Southwest’s cost structure. By May-2013 the airline will be in labour negotiations with the five largest unions whose members represent 99% of the carrier’s workforce.

“The facts in front of us are that we’ve got some labor cost challenges that we need to figure out how to overcome,” carrier chief operating officer Michael Van de Ven told investors. He explained that negotiating teams from both the airline and unions are aware of the challenge. But even as union negotiators understand the importance of keeping labour rates competitive, there is no guarantee the wider membership will agree to lower wage rates without some give back by management. The negotiations will continue for quite some time, which means Southwest will still have to battle rising labour costs until new agreements are reached with pilots, flight attendants, ramp workers, mechanics and customer service agents.

 

[scoreboardII]

Pilots just gave him a 22% increase in seats for free. A worry free merger for free. International and Redeye for essentially free.

The pilots have no more to give to make this airline profitable. Oh, has anyone noticed this airline is profitable and will remain as such with impending OAL pilot contracts?

This airline is proceeding down the path that every other airline has in failed attempts to extract concessions and only getting them through bankruptcy.

 

[redflyer65]

Scoreboard has it right. There are plenty of other areas that need more attention company wide. I could give you specific examples, but I'll just leave it at that.

 

[DonVerita]

A SWA pilot on the employee bus yesterday told me that they run the APU's all night long on overnighting aircraft when it is hot or cold outside. YGTBSM!! Just hook up external conditioned air for crying out loud. GK could start with that cost saving move right there.

 

[rjfo]

A SWA pilot on the employee bus yesterday told me that they run the APU's all night long on overnighting aircraft when it is hot or cold outside. YGTBSM!! Just hook up external conditioned air for crying out loud. GK could start with that cost saving move right there.

Not true. Or that pilot was lying just for fun

 

[Jetjockey]

Sounds like management wants labor to subsidize all that free bag revenue the company gives away. Why does management look to cost reductions vs. increasing revenue??? Because shaking down the employees is the easier path.

 

[DonVerita]

Or that pilot was lying just for fun

Why would he do that? Are you saying that SWA pilots intentionally make false statements?

 

[Fly-By-Cable]

Maybe they can start by not paying for employee parking. Oh wait.....

 

[FlyinGuy]

Who knows why that dude said that. That is not a common practice.

 

[CaptWidgeon]

Why would he do that? Are you saying that SWA pilots intentionally make false statements?

maybe he wanted to mess with ya.
maybe you annoyed him.
maybe he is an @ss.
the answer is, no. swa does NOT run the apu all night. honest answer. don't take it personal. move on bro.
:beer:
unless you're a jerk. then you deserve it.

 

[Crash Pad]

ALPA has already chipped in 250 million in pilot concessions. Suck it SWAPA you will never beat ALPA in a race to the bottom. Half pay to the last day! Did I mention we do our cheap flying on the most lucrative international routes. Boom you just got schooled ALPA style.

 

[Mamma]

.15 is pretty big. Alaska's goal is .10 and they are raking the cash in getting .11-.12. I am getting the feeling this is management's new tactic. Give labor some arbitrary ROIC and then say they need to reduce labor costs to reach this new arbitrary goal. "If we can meet this .15 ROIC we can buy new planes, hire more pilots and grow!!! BUT, we are going to need to control costs a little bit more! Thanks for all you do." Its hard to wrap your finger around this and management can use their funny accounting to make this number whatever they want in the end.

 

[Boxboy]

Tell management to shove it up their a$$! No more giving. Take take take....and then take some more from these greedy bastards!

 

[Skyboy722]

A SWA pilot on the employee bus yesterday told me that they run the APU's all night long on overnighting aircraft when it is hot or cold outside. YGTBSM!! Just hook up external conditioned air for crying out loud. GK could start with that cost saving move right there.

A bit naive of you to believe this one. BTW, we can't even leave an airplane powered up on ground power unattended, much less leave the apu running.

 

[scoreboardII]

Not true. Or that pilot was lying just for fun

It's very true but its not a punishment, the ground ops folk leave the APU running in jets pushed off the gate to keep the jet from freezing, and no, there is not enough air carts for jets off the gates. I've seen it and originated jets that came from the pad after the APU had been on all night. It's rare, but does happen.

 

[maxblast72]

SWA doesn't know what they are doing. I think they are going to announce their 40th straight year of profitability next Thursday. Maybe they will file bankruptcy the week after.

 

[ALSF 2]

SWA planes are not allowed to be powered unattended at all... ground power...apu power... nothing! They were pulling your leg. If ramp did that overnight, it would be noticed, and that ramp crew would be out of a job.

Cheers!

 

[scoreboardII]

They are not unnattended, someone is there all night, and it's only about 5 hours seeing as they terminate then originate. Some outstations run the apu to keep the jet from freezing as they have no or not enough power units. It is a rare event but does happen.

 

[Saluki Dawg]

Scoreboard is right. I've seen them do this in BUF, PVD, and BDL I believe. Very rare when it happens, but it does sometimes happen, and yes the ramp crew is forced to babysit the Airplane overnight when that happens.

 

[PCL_128]

.15 is pretty big. Alaska's goal is .10 and they are raking the cash in getting .11-.12. I am getting the feeling this is management's new tactic. Give labor some arbitrary ROIC and then say they need to reduce labor costs to reach this new arbitrary goal. "If we can meet this .15 ROIC we can buy new planes, hire more pilots and grow!!! BUT, we are going to need to control costs a little bit more! Thanks for all you do." Its hard to wrap your finger around this and management can use their funny accounting to make this number whatever they want in the end.

Someone gets it.

 

[maxblast72]

.15 is pretty big. Alaska's goal is .10 and they are raking the cash in getting .11-.12.

SWA generated 15% ROIC in Q2 2012 (when annualized). Of course it didn't hurt that Jet A dropped about $0.60/gallon between the start and finish of the quarter (before climbing again substantially in Q3 and Q4). If fuel stays in the $3.30/range and Gary Kelly acheives his $1 billion extra revenue target from the connection of the two systems, the extra 6 seats with the Evolve interiors, and the replacement of B717s with B737-800s, Southwest will be flirting if not hitting 15% ROIC in 2013.

In today's crazy world with Bernanke and the ECB running the printing presses on premium unleaded, I don't think running the airline conservatively is a horrible thing. Gary Kelly wants to grow but isn't going to overleverage the company just for the sake of growth.

PCL128, if Gary Kelly ever leaves, I will write you a recommendation letter to replace him. It seems like you have it all figured out. Remind me what school you got your MBA at so I can include that in my letter of recommendation.

 

[slaquer5]

PCL128, if Gary Kelly ever leaves, I will write you a recommendation letter to replace him. It seems like you have it all figured out. Remind me what school you got your MBA at so I can include that in my letter of recommendation.

It was Atlanta High School. His MBA is a gold medallion he made in art class ( he is to much of a sissy for shop).

He keeps it on his night stand next to the one that says( fat people rock)

 

[flygirlqt]

PCL128, if Gary Kelly ever leaves, I will write you a recommendation letter to replace him. It seems like you have it all figured out. Remind me what school you got your MBA at so I can include that in my letter of recommendation.

Mr. ALPA got his diploma at the Gulfstream School for PFT clowns

 

[PCL_128]

PCL128, if Gary Kelly ever leaves, I will write you a recommendation letter to replace him. It seems like you have it all figured out. Remind me what school you got your MBA at so I can include that in my letter of recommendation.

Says the guy who acts like the CEO, the Chairman of the Federal Reserve, the Secretary of the Treasury, and a merger attorney, all at the same time?

 

[pilotyip]

SWA is no longer the low cost carrier. Market pressures are making it harder to be profitable. Great airline, great place to work, but can their product of free bags, no changes fees, and highest wages survive in the present market? Management's job is to work to ensure survial and saving of everyone's job. Union's job is to find ways to increase productivity and reduce CSM. That is the reality of today's airline market.

 

[PCL_128]

Union's job is to find ways to increase productivity and reduce CSM.

Uh, no, that's not the union's job.

 

[pilotyip]

Uh, no, that's not the union's job.

So what is the role of the union when it moves to destroy a company, do they then become known as "Company Busters". I am sure you have an answer right?

 

[PCL_128]

So what is the role of the union when it moves to destroy a company, do they then become known as "Company Busters". I am sure you have an answer right?

I'm really not sure what you're talking about. I've never seen a union "move to destroy a company."

 

[maxblast72]

Says the guy who acts like the CEO, the Chairman of the Federal Reserve, the Secretary of the Treasury, and a merger attorney, all at the same time?

Where have I ever posted and told Gary Kelly how to run his airline? I do think I could have done a better job than Greenspan or Bernanke as Fed chief. Boy can those guys blow bubbles.

With respect to merger attorney, I guess this DFR lawsuit might prove who the better merger attorney is, Maxblast72 or PCL128

 

[slaquer5]

I'm really not sure what you're talking about. I've never seen a union "move to destroy a company."

Please tell me your yanking his chain with that comment..