Airtran Pilots, Don't buy that new house yet..

[madjack]

Just another snake oil salesman with a penchant for celebrity.

So true and he will lose to Obama...I am predicting the economy will improve in the next 18 months and the Senator from Chi town will keep his job! Crazy country!

 

[SWA Bubba]

Well, OK, but I doubt that I can overcome your inherit prejudices in this matter. First, age, old enough my great granddaughter had to teach me how to use this computer. Ponzi, a unsustainable enterprise requiring continuously greater amounts of investment or growth. ie; Southwest the poster child of de-regulation, no pension, no lifelong earned benefit supporting the health and welfare of a retiree. A business model requiring constant and unrelenting growth to sustain the desires of a labour force for a returnable income. In point of fact the current labor problems being the result of enimic growth. However you can rationalize any argument and Rick Perry,s nothing new. Just another snake oil salesman with a penchant for celebrity.

Actually, Mr Maru,

I'd submit that you actually have it backwards. The legacy airlines (of which I assume you're a retiree of) are much closer to being a ponzi scheme than SWA.

You said that SWA's no pension and no "lifelong earned benefit" for retirees makes it ponzi, and that it requires constant and unrelenting growth. Don't think so. The legacy airlines (and every other company with a "traditional" retirement with generous life-long benefits gained through numerous union contrracts) are the ones with cash-flow issues. If THEY don't grow and end up with constant revenue year-over-year, they're in trouble, because they have an exponentially growing number of retirees needing to be paid benefits, which each year take a ever-increasing slice of the revenue pie to pay those lower down on the retiree "pyramid."

For example, General Motors used to need $1,800 from every car sold to fund its retirees' benefits. Every car; before any materials were paid for, before the workers who were actually making the cars got paid. That number grew and grew until it was unsustainable. They and legacy airlines, went through BK court to renegotiate and/or dump those obligations because they couldn't afford those unending increases in payouts, with the smaller profit margins they were making.

SWA on the other hand, as you pointed out, works different. Each pilot funds his own retirement through 401-k, profit sharing, stocks, etc. with company-provided contributions paid as-you-go. Therefore, SWA pilot retirees are not burdening the company with a pyramid of ever-increasing future financial obligations. 'Cause doing THAT sounds a little like ponzi.

For us, lack of growth (current "labor problems" you mentioned) just means people bitch about being on reserve or not upgrading fast enough for their tastes. That's part's pretty much the same for every airline (although we temporarily have the additional angst of the intregration with AAI). However, in the mean while, we're still enjoying great pay and benefits and continuing to fund our own retirements. Other airlines with traditional retirement plans? No so much. No legacy airline has adequately funded its retirement obligation in years. They can't afford to.

See my point about Ponzi?

Bubba

 

[SkiFishFly]

Bubba,
You have it absolutely correct. I would add that when an employee retired in the old system, they were just beginning their financial burden on the company and new employees. Under the SWA/401K system, retirements actually lower the costs to the airline as the replacement is hired at much lower costs to include much lower requirements for 401k match.

Now if we could just change SS to a defined contirbution plan...

 

[redflyer65]

And the fact that SEVERAL retired captains were made millionaires just in stock options grants alone...

Not even counting the 401k and profit sharing. Those guys are doing just fine and retirement, and SW isn't paying them anything right now. As a matter of fact, most of the things on the Southwest property are paid off to begin with. Over 80 percent of the airframes are own outright, free and clear.

RF