AAI to slow deliveries if oil stays high

[lowecur]

They will continue to take one per month but say they will lease the planes out and make money that way if oil prices persist.

Oil prices could slow plane delivery for AirTran


[size=-1]03:25 PM CDT on Tuesday, April 26, 2005[/size]

[size=-1]By ERIC TORBENSON / The Dallas Morning News[/size]

AirTran Airways Inc. widened its first quarter loss from last year as high jet fuel prices ravaged its earnings, and the fast-growing low-cost carrier signaled it may expand slower if oil prices persist.

The Orlando-Fla.-based discount airline said it would continue to take new aircraft from the Boeing Co. at about the rate of one 737 per month.

But if oil prices keep near their $55 per barrel of crude, AirTran would lease the new planes to other parties instead of flying them, said chief financial officer Stan Gadek in an interview Tuesday.

“Those purchase agreements with Boeing are very valuable because of the prices we were able to get,” he said. “They give us a lot of flexibility.”

The discounter lost $8 million, or 9 cents per share, in line with Wall Street expecations. The loss compared with a loss of $4.1 million, or 5 cents per share, for the prior year’s first quarter.

Revenue grew 24.2 percent to $300 million as AirTran continued its brisk growth and announced new service to Richmond, Va. and Charlotte, N.C., and continued to see encouraging results in markets such as Dallas/Fort Worth, where it serves six cities.

However, AirTran doesn’t have any new flying planned in the immediate future at D/FW, where 80 percent of the flying is controlled by Fort Worth-based American Airlines Inc.

If AirTran were to slow down its growth rate, that could dim D/FW’s chances for more low-fare competition to American.

 

[-9Capt]

They will continue to take one per month but say they will lease the planes out and make money that way if oil prices persist.

The CFO tells the media in an interview it's oil prices, the VP of Flight Ops tells us in recurrent it's pilot labor.

Personally, I'm not too worried.

 

[wood pecker]

This very topic as far as one person blaming oil and another blaming pilots worries me. Why is AAI turning against its employees. When AAI took the voluntary pay cut after 9-11 to help their team I was very impressed and jealous at the unity among labor and management. Now I read management prospers but they want the opposite for labor concerning 12% productivity cuts. This is the same B.S that will hurt future demands when times get rough.

I am also tasting sour grapes after 2 of my friends got calls before me when we are using the same references and similiar back grounds and they applied only a few months ago. Did some one spill coffe on the stack of resumes from over a year ago and throw them away.

Anyway I should go take my anti-envy pill and be happy I moved up 2 seniority slots at ASA.

 

[Phaedrus]

>>>The discounter lost $8 million, or 9 cents per share, in line with Wall Street expecations. The loss compared with a loss of $4.1 million, or 5 cents per share, for the prior year’s first quarter.<<<

It was my impression that AAI actually made $4.1M for the first quarter of '04. In fact, from the little I know, AAI has reported profitable quarters every quarter except immediately after 9/11 since 1999 when JL becamed chairman. The Dallas Morning News needs some better editors.
__From prnewswire__
Net income for the first quarter was $4.1 million or $0.05 per diluted
share versus net income of $2.0 million or $0.03 per diluted share for
the year-earlier period. First quarter 2004 results reflect a full tax
rate and approximately 14.1 million additional shares outstanding.

That said, the $8M loss is worrisome.

 

[lowecur]

The CFO tells the media in an interview it's oil prices, the VP of Flight Ops tells us in recurrent it's pilot labor.

Personally, I'm not too worried.

In my narrow view it's quite simply a shot across the bow. Gamesmanship is a typical response where two parties insist on showing the other one who is running the show. It usually escalates into a full blown adversarial relationship where the airline is the ultimate loser. Too early to tell how this one will play out, but if history is any teacher neither party will budge unless forced to.

 

[Ty Webb]

This very topic as far as one person blaming oil and another blaming pilots worries me. Why is AAI turning against its employees. When AAI took the voluntary pay cut after 9-11 to help their team I was very impressed and jealous at the unity among labor and management. Now I read management prospers but they want the opposite for labor concerning 12% productivity cuts. This is the same B.S that will hurt future demands when times get rough.

No surprise here. They are playing from the same old playbook that airline management has used for the past 75 years. You're right, they have squandered a lot of goodwill, and that was very stupid on their part. They had the opportunity to take it to the next level ( ala SWA) but they blew it by re-interpreting the contract to suit their needs, and caused damage to the relationship that will cost them in the next contract . . . IMHO.

It's still a great place to work, but management really did miss the bus on this one . . .

I am also tasting sour grapes after 2 of my friends got calls before me when we are using the same references and similiar back grounds and they applied only a few months ago. Did some one spill coffe on the stack of resumes from over a year ago and throw them away.

Anyway I should go take my anti-envy pill and be happy I moved up 2 seniority slots at ASA.

The squeaky wheel gets the grease . . . perhaps your friends that got hired were a little noisier, getting your shared references to call on their behalf. Did you have comparable total times? Because the 3200TT you have listed in your profile is definitely on the low side of what they are receiving. . . . it's still more than I had when I was hired but I would make sure your reference is working the phones a little harder.

Good luck.

 

[-9Capt]

They are playing from the same old playbook that airline management has used for the past 75 years. You're right, they have squandered a lot of goodwill, and that was very stupid on their part. They had the opportunity to take it to the next level ( ala SWA) but they blew it by re-interpreting the contract to suit their needs, and caused damage to the relationship that will cost them in the next contract . . . IMHO.

IMHO also.

 

[skykid]

My guess is Airtran is going to have the opportunity to expand greatly in the next couple of years. We'll see - hopefully for them they have options to continue taking deliveries at a quicker pace.

 

[FlyBoeingJets]

The CFO tells the media in an interview it's oil prices, the VP of Flight Ops tells us in recurrent it's pilot labor.

Personally, I'm not too worried.

YGTBSM! Pilot labor??? You know more than the rest of us that AirTran 737 crews are not paid what they are worth. Did anyone laugh at the VP of Flight Ops?

 

[-9Capt]

YGTBSM! Pilot labor??? You know more than the rest of us that AirTran 737 crews are not paid what they are worth. Did anyone laugh at the VP of Flight Ops?

BoeingJets,

I don't know of a single passenger airline operating in the USA that pay their pilots "what they are worth".

Let's compare, shall we?

AirTran's 12yr 737-700 pay is $154/hr, 737-800 is $175/hr.

American..$156
Delta...$156
United...$129
UsAir...$125
Midwest...$144 (717)

Are AirTran pilots underpaid, you bet, we all are, yourself included!!

 

[fletch717]

Continental 12 year 737 158.00 hr

I always surprised when people tell me that my airline is ruining the industry because of our pay rates. We are in line with everyone else and we don't cap hours per month for pay. Only Northwest is holding the line on pay rates.

 

[rudderdog]

Continental 12 year 737 158.00 hr

I always surprised when people tell me that my airline is ruining the industry because of our pay rates. We are in line with everyone else and we don't cap hours per month for pay. Only Northwest is holding the line on pay rates.

I don't think most people look only at 12 year captain pay to determine if you're "in line" with others. As a new hire I would look at year 2, 3 and 4 fo pay and then 6 year captain pay and beyond. I don't even know what Airtran pay is, but how does say 3rd year fo pay and retirement hold up against those hiring today...JetBlue, CO, LUV etc....

They seem to top out with the rest of the pack. Your "time value of money" can make a big difference though.

 

[-9Capt]

Rudder,

In my opinion, the only way to make decent money at AirTran, is to upgrade ASAP (currently about 30 months and dropping).

PAY: I don't have the pay scale in front of me but 3rd yr FO is somewhere in the upper $60's, junior capt is around $115. Trip/duty rigs add alot of soft pay, particularly reserves, who routinely fly 75-85/month and get 100+ hrs month credit time. I've been here 7 yrs and I'm at $132/hr and grossed over $142K in '04, thanks in a large part to the rigs.

Retirement is a company funded B-fund at 10.5% of your monthly gross pay.

How does that compare to JB SWA and CO? Check airlinepilotpay.com

 

[Fly-By-Cable]

Well, let me add.

I'm a reserve 717 CA. last month I blocked 53 hours. My credit was 107!
So at my 4th year pay of $112.27 an hour. I actually flew 53 hours at about $225 per hour. Not bad for 117 seats in the after 9-11 era.

Soft pay for reserve pilots is great. If only I could be guaranteed to never fly CDOs or sit ready, I'd be on reserve for ever.

 

[Steeler Fan]

Well, let me add.

If only I could be guaranteed to never fly CDOs or sit ready, I'd be on reserve for ever.

I thought that you liked Stand-ups, especially EWR!

 

[rudderdog]

I'm a reserve 717 CA. last month I blocked 53 hours. My credit was 107!




Sounds a lot like the old TWA......it was great.

 

[FlyBoeingJets]

So, with oil higher is this article just a negotiating tactic to keep labor costs down or are they serious about it?

 

[Phaedrus]

Negotiating tactic? An article from 9 months ago? Sounds like good business sense to me, but what do I know....I'm responding to a thread from 9 months ago.

 

[FlyBoeingJets]

Negotiating tactic? An article from 9 months ago? Sounds like good business sense to me, but what do I know....I'm responding to a thread from 9 months ago.

I'm sorry to hear your attention span does not reach back to 9 months ago.

 

[Ty Webb]

Relevance, please?

Thanks for trotting out this old string . . . . another example of Loweturd proven wrong . . . gotta dig it.

Oil went even higher, yet we still took delivery of all the aforementioned aircraft and flew them ourselves, while making a profit for the seventh consecutive year.

 

[FlyBoeingJets]

Thanks Ty.

Things are looking good over at Airtran. I'm glad some of my buds made a good choice.

 

[Phaedrus]

I'm sorry to hear your attention span does not reach back to 9 months ago.

Tick: My attention span barely reaches back 9 seconds ago. I'm American d@mmit! And proud of it.
As for your dig on my attention span, it barely reaches back 9 seconds ago!