Airtran gets into the RJ game

[Ty Webb]

This is primarily to resond to a few issues that "Fly Deltas Jets" has raised:

1) "Low Cost Carriers" don't necessarily succeed or fail because of "lower pay" as you claim. That would be like me saying that Delta is losing billions because they pay too much. The truth is not so simple.

In our case, we are succeeding for a number of reasons, and a lot of them have to do with shrewd management, employees who are willing to use a little more innovation to save money where possible, and keeping things simple with a single fleet type. Hence the reason to outsource the RJ's. It made more sense, and it adds to the bottom line. If the company makes money and grows, we make money and grow.

2) Perhaps the problems in the industry could be traced not to the (marginally) lower pay of our pilots, but to the assinine pricing strategies employed by the big 5.

We make money at our prices, but when your company sees us open a city, they will flood that city with hundreds of extra seats, at prices that cause them to hemmorhage money, while we are still making money.

Now, there's a business strategy- it's called "cutting off your nose to spite your face". That dinosuar business model will cause Delta to continue to lose money, until they are dragged, kicking and screaming, into the millenium.

3) Which leads me to my next point- your airline is losing money because they are trying to provide something that they can't.

Mercedes doesn't make money competing against Chevy. Mariott doesn't compete with Days Inn, and Delta will not make money trying to compete with us for the bottom customer.

The sooner they figure that out and start focusing on what they CAN succeed at, the sooner it will get better for us all. Delta has things to offer that we never will, and the sooner they focus on what they are, instead of trying to be all things to all people, the better for everyone.

And you know what? Maybe then we will be able to get more money in our third contract and meet your expectations.

Oh, and last- our concessions (the ones you were so worried about) lasted for 60 days. That's it. Then back to the contract.

 

[dsee8driver]

Frequent flyer

Being a homebased freight dog, I fly commercial to get to work. Just last week I came home from Norfolk to FLL on a ticket bought the night before. I called SW and DL. DL 372.50 SW 151.00. I have also traveled on AirTran out of FLL many times and a few of those times when weather delays has caused 2 planes to arrive at same time I have witnessed Capt or FO load or offload bags because they were short ground crews. I think a major problem with the majors besides their pricing model and all others pointed out in this and other threads is the ATTITUDE of their employees. I have flown on many jumpseats and I can't remmember once listening to a SW or Airtran pilot complaint about their job, they all are happy to be there and be flying.
I think this alliance with AW and AirTran will benefit both companies and as someone else pointed out, Delta pilots need to worry about the codeshare alliances coming up with other carriers in the same markets.

 

[BoredToDeath]

To all airtran employees

Keep all your flying under your own senority list! The only airlines doing well right now don't have their flying being outsourced, ie Airtran(for now), SW, and Jetblue. Why in the world would you let this happen. The only thing your scope clause should say is ONLY AIRTRAN PILOTS WILL FLY AIRTRAN FLIGHTS. PERIOD!!

If a route calls for an RJ to be on it THEN FLY IT, h$ll if it calls for a freakin 1900 to be on it THEN FLY IT.

Onelist can happen, don't let the company do this. Grow Airtran the right way.

 

[Old Crow]

I must add to "BoredtoDeath" you are correct in your tone. The correct use of outsourcing should be to grow while the addition of aircraft are not available, however, this is not how it works completely.
I truly see the use of alter-ego airlines as a safety net of competition against your union employees.

Yes it is a good thing that Airtran wants to grow right now and by doing so adds the new company to the list.

Yes you Airtran pilots will continue to maintain your current status while you watch your company grow by Air Whisky.

Good luck.

 

[Publishers]

Relationships

The problem here is that htis is so much more than a pilot type issue and for all the ranting, there is no such thing as AirTran or anyone elses flying.

One list is not a probability that is going to occur anywhere and it misses the point entirely at this point.

My remarks here are not based on AirTran per se but the whole system. They may not want to add a type to their system, they may never want to be in the RJ business. The cost of entry versus the cost of hiring a contractor to start or fly a route may be prohibitive.

Whether you believe it or not, no one ever does this trying to create an alter ego airline to get around unions. In most cases, the people who are invoved in the decision making for this aspect are in marketing and pay no attention at all to those type issues.

They see a market they want to serve and know that it will not support the aircraft that they have determined is their base aircraft. This gives them a chance to try it.

While i know some of you would like to think that most management does little but sit around and conspire against pilots and labor groups, that is myth.

 

[DaveGriffin]

I invite all of you to go back an reread threads concerning DAL. Count how many posts insult our entire pilot group. Than do the same for the posts which insult yours. I venture to say that your insults far outnumber ours. I also believe that we have shown substantial restraint in not responding to the seemingly endless put-downs………….

I have never intentionally insulted an entire group. If it's all the same to you guys, I would much prefer to stay away than to sink to that level. I'll leave this thread to those of you who are content to sit around in their underwear and whine about every one of those egotistical Delta pilots. Have fun. Maybe when you are finished you can poke fun at other stereotypes, most of which also have no basis in fact.

I am, however, in favor of ALPA and the company meeting to work together to find ways to mitigate some furloughs. It would be nice if we were treated the same way the other employee groups were. That, however, would not be effective union-busting.

#2. While many of the pilots of airtran are fine professionals, and I mean no disrespect to them, I believe it is very dangerous for our profession when airlines are allowed to compete using lower employee salaries as a weapon. I'm sorry Dave, but I can't look to them with admiration for taking a paycut, when their entire contract is already a massive concession compared to ours.

I believe that we are raising the bar for the profession. Unfortunately, pilots who are willing to do the same job for half the pay gives management another weapon in their fight to lower the bar. .

http://forums.flightinfo.com/showthread.php?threadid=3509&goto=newpost

FDJ;

You have intentionally provoked the AAI guys before.

“While MANY of the pilots of airtran are fine professionals”………?????

You insulted the entire group. You wouldn't even go as far as to say to say MOST of the pilots of airtran.

My question to you is what are the others?

You’re way too defensive about your self-proclaimed record of restrained posts.

 

[enigma]

To all airtran employees

Keep all your flying under your own senority list! The only airlines doing well right now don't have their flying being outsourced, ie Airtran(for now), SW, and Jetblue. Why in the world would you let this happen. The only thing your scope clause should say is ONLY AIRTRAN PILOTS WILL FLY AIRTRAN FLIGHTS. PERIOD!!

If a route calls for an RJ to be on it THEN FLY IT, h$ll if it calls for a freakin 1900 to be on it THEN FLY IT.

Onelist can happen, don't let the company do this. Grow Airtran the right way.

I second that motion, with one addition. Spirit is also doing well with only "inhouse flying". It seems that the airlines who develop a good business plan and stick to it, do well. I pray that our owners remain on the plan.

regards
8N

 

[BoredToDeath]

Publishers says:

**"The problem here is that htis is so much more than a pilot type issue and for all the ranting, there is no such thing as AirTran or anyone elses flying.

One list is not a probability that is going to occur anywhere and it misses the point entirely at this point. "**


How can you say there is no such thing as Airtran or anyone elses flying. If AirWis flys planes painted like Airtran and Airtran is doing the advertising how is this not Airtran flying?

ONELIST does and has worked for many many years. Look at BahamasAir for instance. Dash 8s and 73s flying together under ONELIST. I think Air Jamaica is also ONELIST with the Shorts and Airbus. And if I dig alittle harder I bet I'll find some more.

All its gonna take is a strong pilot group to make it happen here.

 

[BoredToDeath]

enigma,

I'm sorry I forgot about Spirit.

Thanks

 

[Publishers]

Good Examples

Now there are some great examples.

BahamasAir for instance. Dash 8s and 73s flying together under ONELIST. I think Air Jamaica is also ONELIST with the Shorts and Airbus. And if I dig alittle harder I bet I'll fin

Keep digging and let me know what you find. Let's also have an apples and oranges comparison while we are at it. At least in wholly owned's you have some arguiing points. It is not happening there so what makes you think it will ever happen here.

It looks to me like it is Air Wisconsin flying that they are letting AirTran paint their planes for.

 

[FlyDeltasJets]

http://forums.flightinfo.com/showthread.php?threadid=3509&goto=newpost

FDJ;

You have intentionally provoked the AAI guys before.

“While MANY of the pilots of airtran are fine professionals”………?????

You insulted the entire group. You wouldn't even go as far as to say to say MOST of the pilots of airtran.

My question to you is what are the others?

You’re way too defensive about your self-proclaimed record of restrained posts.

Was that the best you could come up with? That I said "many" instead of "most?" Thank you for making my point.

To answer your question, the "others" to whom I was referring were the many EAL scabs at AAI. Again, most (better?) of their guys are fine professionals, I do have a major problem with the scabs on their list, and CAL's, and UAL's and ours.

 

[FlyDeltasJets]

This is primarily to resond to a few issues that "Fly Deltas Jets" has raised:

1) "Low Cost Carriers" don't necessarily succeed or fail because of "lower pay" as you claim. That would be like me saying that Delta is losing billions because they pay too much. The truth is not so simple.

In our case, we are succeeding for a number of reasons, and a lot of them have to do with shrewd management, employees who are willing to use a little more innovation to save money where possible, and keeping things simple with a single fleet type. Hence the reason to outsource the RJ's. It made more sense, and it adds to the bottom line. If the company makes money and grows, we make money and grow.

2) Perhaps the problems in the industry could be traced not to the (marginally) lower pay of our pilots, but to the assinine pricing strategies employed by the big 5.

We make money at our prices, but when your company sees us open a city, they will flood that city with hundreds of extra seats, at prices that cause them to hemmorhage money, while we are still making money.

Now, there's a business strategy- it's called "cutting off your nose to spite your face". That dinosuar business model will cause Delta to continue to lose money, until they are dragged, kicking and screaming, into the millenium.

3) Which leads me to my next point- your airline is losing money because they are trying to provide something that they can't.

Mercedes doesn't make money competing against Chevy. Mariott doesn't compete with Days Inn, and Delta will not make money trying to compete with us for the bottom customer.

The sooner they figure that out and start focusing on what they CAN succeed at, the sooner it will get better for us all. Delta has things to offer that we never will, and the sooner they focus on what they are, instead of trying to be all things to all people, the better for everyone.

And you know what? Maybe then we will be able to get more money in our third contract and meet your expectations.

Oh, and last- our concessions (the ones you were so worried about) lasted for 60 days. That's it. Then back to the contract.

Ty,
First of all, thank you for the more rational post. I enjoy these types of discussions much more.

Secondly, I am not too "worried" about the temporary concessions. If you reread the thread, you will find it was not I who first brought it up.

I also believe that you bring up some good points about DAL's profitability and strategy (or lack of same!). I have some major differences with some recent business decisions as well.

That being said, however, I think it is naive to credit your success to innovative employees and a single fleet type. While those things certainly factor into the equasion, you cannot possibly deny that the largest cost savings you enjoy come from your largest expense...labor.

An airlines largest expense is emplyee wages, and it is here that low fare airlines gain the largest advantage. Your stated savings from other methods, while they might be admirable, are not nearly as signifigant as the savings gainef from lower wages. I will demonstrate using comparisons between Delta and Airtran. However, you can use just about any major and any low-cost airline, and get similar numbers. These numbers come from the annual reports. It is public information, and easy to obtain.

Some have mentioned that Airtran saves money because of a fuel-efficient fleet. While I grant you that the 717 is a cool airplane, it does not quite give you a cost advantage on fuel. In 2001, delta hedged fuel, and as a result, spent an average of 68.6 cents per gallon. Airtran, on the other hand, spent 93.85 cents per gallon. Fuel made up 11.7% of Delta's total expenses, while fuel made up 22.14% of airtran's. As you see, airtran does not have a cost advatage because of fuel. As a matter of fact, Delta does.

Some also mention that the fact that airtran bought inexpensive airplanes gives them a financial and cost advantage over Delta. First of all, that is not necessarily true due to higher maintanence costs of older airplanes. Secondly, no matter how cheap the airplanes are, airtran leveraged themselves very heavily to get them. As a result, their debt to equity ratio is 7.91 (ouch). Delta's is 2.77 (not to good either, but a lot better than 7.91). (I researched these numbers a few weeks ago. They may have changed, but not signifigantly). As a result, airtran does not enjoy a cost advantage on interest payments, either. Delta has a cost advantage here, too.

Others speak of a high percentage of passengers booking through FL's website. That is correct, and they are correct that that does save money. Not as much as one would think, however. They still have to pay high CRS (computer reservation fees), and Delta has significantly cut TA commissions. Also, we are selling a lot through Delta.com. Not as much as FL, but we are catching up. As a matter of fact, when you add advertising costs to distribution costs (what I believe represents to total cost of selling a ticket), you will find that both airlines spend roughly 7% of total expenses. Not much of a cost saving here.


I will grant you that there are other cost saving factors, but none are enormously significant.

So how does airtran and others enjoy such a huge cost advantage? They pay their employees less. In 2001, employee salaries and related costs made up 39.56% of Delta's total expenses. At airtran, only 25.27% of total expenses were spent on employees. It is is a difference, and it is significant. I will say it again, salaries are an airlines largest cost (by far), and low fare airlines pay much less in salary than the majors do. It is for this reason that they have such a cost advantage, and for this reason that they are able to offer such low fares. To assume otherwise is erroneous.



Some would respond that DAL and airlines like them pay their employees too much. They may be correct. But I would hope that fellow pilots wouldn't join in that chorus. After all, when our pay goes down, others will as well, throughout the industry. I think most will agree that with a similar price, most low-fare airlines would have a difficult time competing with the schedules, routes, size, and FF programs of the majors. In order to preserve their ability to offer lower-priced tickets, they will have to maintain their cost advantage. I hope I have illustrated the major factor behind that advatage.


P.S.

A friendly word of caution. You said "if the company makes money and grows, we make money and grow. As we have learned at DAL, the two do not always go hand in hand.

 

[DaveGriffin]

Was that the best you could come up with? That I said "many" instead of "most?" Thank you for making my point.

To answer your question, the "others" to whom I was referring were the many EAL scabs at AAI. Again, most (better?) of their guys are fine professionals, I do have a major problem with the scabs on their list, and CAL's, and UAL's and ours.

I call bigtime BS on that one FDJ. You weren't talking scabs at all and you know it. You were dissin' the pilots of AirTran for taking positive action to avoid furloughs by the seniors taking care of the juniors.

 

[FlyDeltasJets]

Ok Dave. Whatever you say.

Do me a favor, though. Try to refrain from telling me what I "know." I find it pretty annoying. My explanation was exactly what I meant. It came during a discussion of the concessions, but I have never equated level of pay with level of professionalism. If I wanted to insult people for their pay, I have had ample opportunity during my many conversations with my regional jousting partners on this board. That is not my style, and I have never resorted to such tactics. If I wanted to play that way, you would have seen it long before any airtran posts. Scabs were the only thing keeping me from saying that every AAI guy was a fine professional.

However, I have no delusions of convincing you what I was thinking, and frankly, I'm not that interested in trying.

 

[Boeingman]

If this guy thinks he is making "more than the most senior FL Capt" (in other words, over $200K) while he's on the street, well, then, he's not on furlough- he's on mental, err, I mean medical leave.

Best to just leave him be. "Never argue with a Fool; people might not know the difference".

Murphy

LOL. I guess Amway is paying pretty good these days for FDJ.

 

[FlyDeltasJets]

Couldn't keep out of it, could you Boeing?

I will assume that you are joking and accept your ribbing with my usual grace and magnanimity.

Was that better?

 

[Boeingman]

Couldn't keep out of it, could you Boeing?

Nope.

I find your comment about not "insulting people about pay" funny and 2 faced considering your barbs about CAL's contract last winter. Of course, you were sitting on your high and mighty throne at DAL thinking you had the world by the balls.

Look at you now.

BTW, few people consider a staunch unionist to be the final equation in what determines a "professional". That's another lesson I'd like to impart on you, but you won't listen....you haven't been on the street long enough.

 

[FlyDeltasJets]

Just so you know, I still have the world by the balls. Delta didn't define me, and the same qualities that made me successful in my quest for Delta are making me successful in other ventures, be they educational, financial, or personal.

Yeah, look at me now. I'm still doing fine and will continue to do so.

 

[Boeingman]

Just so you know, I still have the world by the balls. Delta didn't define me, and the same qualities that made me successful in my quest for Delta are making me successful in other ventures, be they educational, financial, or personal.

Yeah, look at me now. I'm still doing fine and will continue to do so.

That's great, because I think it will be years before you get back upon your throne in ATL again.

 

[FlyDeltasJets]

I think you're probably right. I'll survive and be stronger for the experience. I know that you will be happy to hear that.