AirTran Fruloughs

[Browntothebone]

Good luck guys and gals...we wish you all the best in these tough times.


Minime...as far as FDX and UPS in your statement, well hold on, because they are not doing well either. Just heard FDX may double the number of a/c retirements from the original 12 or so planned, and UPS lost money last quarter, so looks as though it's only SWA on that throne anymore. God help us all!!!

WRONG!!! UPS made over $900 MILLION last quarter.

 

[flyinboxes]

DHL will make sure that changes.

 

[Browntothebone]

DHL will make sure that changes.

You're right! UPS' profits will be even bigger!!!

 

[Max Powers]

PCL-

No, you didn't say revenue was down...you said there was a "revenue problem." Maybe you could expound on what you mean there.

Managers must address all costs, which includes us pilots! Whatother ways should they look for? They can only look for controllable costs right? They cannot control the price of fuel, but they can control the price of labor. Should other employees at the Tranny take cuts so the pilots don't have to?

Lear-

Thanks, that was what I was trying to understand. I would agree completely that threatening to fire newbys to get concessions is quite upestting. Does your contract allow this?

Revenue problem: is we do not have route monopoly's or anything really close. Meaning we can't really cut to the less competitive easier to increase fare routes because there aren't any. All our routes are Highly competitive - not good.

 

[DrunkIrishman]

PCL-

I realize AirTran pilots are not ALPA; however, it was ALPA that decided to pin the wages of pilots on the revenues of the airlines. The result is that pilots are a controlable cost.

Also, your comparison of raising prices to reflect fuel increases is a talking point that lacks a true understanding of revenue management. You may think you know how to run an airline, but until you do I say you are mistaken. Air travel is not a necessity. As discretionary spending has decreased, so too has the ability of the airlines to raise fares.

Max Powers-

Yeah, you seem to get it.

 

[PCL_128]

PCL-

I realize AirTran pilots are not ALPA; however, it was ALPA that decided to pin the wages of pilots on the revenues of the airlines. The result is that pilots are a controlable cost.

ALPA made no such decision. Each individual MEC and pilot group makes their own decisions. This pilot group won't allow itself to be used as a checkbook balancing tool.

Also, your comparison of raising prices to reflect fuel increases is a talking point that lacks a true understanding of revenue management.

I never said anything about raising fares. I said increase revenue. There is a very big difference. Our ancillary revenue (revenue from sources other than ticket fares) has gone up considerably faster than fare revenue, but we need to continue capitalizing on other ancillary revenue opportunities. In any case, whether they choose to attempt to increase revenue or not, my paycheck is not available to them. Not one damned nickel.

 

[JT12345]

PCL-

I realize AirTran pilots are not ALPA; however, it was ALPA that decided to pin the wages of pilots on the revenues of the airlines. The result is that pilots are a controlable cost.

Also, your comparison of raising prices to reflect fuel increases is a talking point that lacks a true understanding of revenue management. You may think you know how to run an airline, but until you do I say you are mistaken. Air travel is not a necessity. As discretionary spending has decreased, so too has the ability of the airlines to raise fares.

Max Powers-

Yeah, you seem to get it.

I love flying, but the way this industry is run is the biggest joke in Capitalism. I thought running a business was about making money.

Based on the costs of doing business, labor, leases, fuel, and airport realestate costs, I would have to say that the overhead verse profits of Airlines are a joke. And management teams seem to be more about cashing out, and building a resume to get a real job.

Customer service doesn't seem to matter either. It has become more about gambling on fuel prices than anything else. The reason why oil affects this industry is because there is no profit margin that the companies refuse to go below. Airlines lose money for years and years, and then seem to barely make a profit in the suppositly good times.

Until this industry becomes more about profits, and profit margin instead of cash flow and market share it is hard to justify anything in terms of labor costs. It seems you never want to have too much profit in this industry, and there are no incentives to do otherwise. Profitablity has been a joke in this industry for a long time. Therefore how do you justify labor reacting to profitability of a airline?

 

[Freddie Spencer]

You're right! UPS' profits will be even bigger!!!

Ouch!!!

 

[scarlet]

Yeah how do you lose millions and billions of dollars for years and years and still stay in business? I need to know so I can do the same with my small business, and the government not look so hard at me.??

 

[maxblast72]

Revenue problem: is we do not have route monopoly's or anything really close. Meaning we can't really cut to the less competitive easier to increase fare routes because there aren't any. All our routes are Highly competitive - not good.

I beg to differ that there isn't routes to cut or change. Fornaro said the west coast flying is dragging our RASM down due to the long stage length. He said there is a need for some west coast stuff but maybe not as big of a percentage of our system going forward until fuel comes down (I think east-west is now close to 23% of our ASM). He said the focus for the near term will be the 500-1000 mile stage length flights (cheaper on gas).

Also, SWF and DAB are going away. I would have to imagine it is because our RASM for those cities are not close to the RASM's out of other cities. Fornaro said we will be looking at each route individually and if it is not performing, we will cut the route to improve our overall system RASM where required. We are not going to play a market share game and stay in markets or routes that don't make sense to stay in right now (ie, we will minimize our losses).

 

[JoeMerchant]

ALPA made no such decision. Each individual MEC and pilot group makes their own decisions. This pilot group won't allow itself to be used as a checkbook balancing tool.

ALPA has made the decision to leave it up to each individual MEC....ALPA doesn't act as a whole...Because of this, pilot costs have become a "controllable expense"....fuel isn't....

Seniority transportability and contract standards are the only way to stop that...otherwise pilot costs are the largest controllable cost....

Oil has OPEC....we have ALPA.....no contest....

 

[Max Powers]

I beg to differ that there isn't routes to cut or change. Fornaro said the west coast flying is dragging our RASM down due to the long stage length. He said there is a need for some west coast stuff but maybe not as big of a percentage of our system going forward until fuel comes down (I think east-west is now close to 23% of our ASM). He said the focus for the near term will be the 500-1000 mile stage length flights (cheaper on gas).

Also, SWF and DAB are going away. I would have to imagine it is because our RASM for those cities are not close to the RASM's out of other cities. Fornaro said we will be looking at each route individually and if it is not performing, we will cut the route to improve our overall system RASM where required. We are not going to play a market share game and stay in markets or routes that don't make sense to stay in right now (ie, we will minimize our losses).

I hope your right, I'm sure there are routes that are weaker on revenue than others. But what my point is we don't have any really strong monopoly's. The legacies and other have much greater route monopoly's they can cut back to. That is why our RASM is the absolute lowest in the industry. We Have Dayton and Ft. Myers but thats about it everywhere else we go Delta or someone else is there.

To be more clear, think of NWA out of MSP there are probably 40 or more cities only they go to. CAL out of Newark the same thing etc. NWA can simply cut their 7 flights a day to Duluth, MN down to 6 or 5 and Jack the prices up because they are the only ones that fly there. We don't go anywhere like that not anywhere. This means we are completely dependent on others to drop flights and the other companies especially Delta know this which, therefore makes them very reticent to drop flight that we compete on - they however are decreasing flights and increasing fares on city that we don't compete with them on - this doesn't help us any. We are in a bad place and lower our employee pay won't help. I say pray for the price of gas to drop or in time we are done.

 

[Dude]

ALPA either needs to act as a solid bargaining unit or not. The middle doesn't help your bargaining position.

 

[maxblast72]

I hope your right, I'm sure there are routes that are weaker on revenue than others. But what my point is we don't have any really strong monopoly's. The legacies and other have much greater route monopoly's they can cut back to. That is why our RASM is the absolute lowest in the industry. We Have Dayton and Ft. Myers but thats about it everywhere else we go Delta or someone else is there.

To be more clear, think of NWA out of MSP there are probably 40 or more cities only they go to. CAL out of Newark the same thing etc. NWA can simply cut their 7 flights a day to Duluth, MN down to 6 or 5 and Jack the prices up because they are the only ones that fly there. We don't go anywhere like that not anywhere. This means we are completely dependent on others to drop flights and the other companies especially Delta know this which, therefore makes them very reticent to drop flight that we compete on - they however are decreasing flights and increasing fares on city that we don't compete with them on - this doesn't help us any. We are in a bad place and lower our employee pay won't help. I say pray for the price of gas to drop or in time we are done.

There's no doubt about it. The business model of growing Low Cost Carriers does better with lower fuel prices. Now that low fuel prices are gone, it is time for us to adapt to the new business environment. The quicker we adapt to the new environment, the less cuts we will have to endure.

Your right, Airtran does not have alot of monopoly routes other than some of the ones we do out of our focus cities like CAK, FNT, PHF, MDW (the routes SW doesn't do like SRQ and BOS), and MKE (the ones that Midwest will soon be vacating). However, a good portion of the route combinations in this country involve one connection. In this regard, we compete straight up with all legacy airlines that offer one stops through their hub. We have the largest low cost carrier hub in the world in ATL with over 260 departures a day this summer. Don't underestimate the position of strength we have here.

I think Airtran will do alright long term, but there might be some painful times for the next 18 to 24 months. Hopefully, fuel comes down to a reasonable enough level or enough capacity comes out of the market to allow Airtran to bring everyone back, and to start growing again.

 

[JT12345]

What does it mean in the letter no bumping rights. Are furloughs based on Airplane or system senority?

I get the impression that the company wants to furlough more 737 guys, but they have hired more 717 guys recently. If they do it based on aircraft then senior 737 FOs will be on the street while junior 717 pilots with hire dates after them remain employed.

When do I start 717 class?

These training costs may be a way to keep more pilots employed.