AirTran to Sell two more planes; tougher union talks ahead?

[Eagle757shark]

AirTran to sell two more planes; tougher union talks ahead?

posted by Jason Garcia on Mar 3, 2008 9:52:20 AM

Orlando-based AirTran Airways will sell two jets in April, AirTran President and Chief Executive Bob Fornaro said this morning, as the airline continues to scale back its growth plans amid record fuel costs.
Speaking at the Raymond James Annual Institutional Investor Conference, Fornaro added that the plane sales won't be the last growth cuts AirTran makes. "We're going to adjust our fleet plans further," he said.
What's more, Fornaro said off-the-charts oil prices -- which he said have climbed past $100 a barrel -- could also impact AirTran's protracted negotiations with its pilots union. The two sides have been negotiating a new deal for nearly two years.
The pilots union rejected AirTran's latest offer last fall. But Fornaro said AirTran may not make a better offer -- or even a similar one -- given today's oil prices.
"I would say right now I'm not sure we would put that agreement back on the table. That was a $65-a-barrel agreement and that's not where we are," he said. "We're taking a fresh eye as to what we're going to put on the table."

 

[airline#5]

Nice posturing BOB. He wants to play hardball, let's go. I don't think the lowest paid FO's in the industry will be thinking pay cuts, just a hunch I have.

 

[T3700]

Just remember;

"Don't worry about FO pay rates, you'll all be Captains in 3 years!!"

 

[Eagle757shark]

Just remember;

"Don't worry about FO pay rates, you'll all be Captains in 3 years!!"

It's going to be a looooong year! RAISE TICKET PRICES! Pass the cost off to the consumer and stop living off the backs of the hard working employees!

 

[DonVerita]

:angryfire Oil at $103 barrel. Yet management still gets multi-million dollar bonuses. For what? Making employee's quality of life worse and selling $29 tickets?

Strike fund ready to go. Bring it on!

 

[maxblast72]

It's going to be a looooong year! RAISE TICKET PRICES! Pass the cost off to the consumer and stop living off the backs of the hard working employees!

If the economy was doing great, we probably could raise ticket prices some more. Right now, I think most Americans are about tapped out. Credit cards are about maxed out, house equity is dropping, and gasoline prices are straining alot of middle and lower class Americans (which make up alot of Airtran's traffic).

We will have to see if these ticket price increases that have been going through over the last 6 months start to reduce these record load factors that most airlines have been enjoying. Do you really think Airtran sets their ticket prices to intentionally have one of the worst net income profit margins in the business for 2007? I think it pretty tough to add 10 airplanes a year, add 5% load factor year over year, and increase ticket prices significantly all at the same time. I think all in all, Airtran has done a pretty good job growing consistently and profitably. Just look around the industry if you want to see some crappy airline business plans (Midwest, Frontier, Spirit, USAirways, ATA).

I will agree that our FO pay is crappy, and that our Captain's don't need one cent over cost of living adjustment (and maybe not even that) until our FO pay comes alot closer to industry standard (especially for years 2-6).

 

[maxblast72]

:angryfire Oil at $103 barrel. Yet management still gets multi-million dollar bonuses. For what? Making employee's quality of life worse and selling $29 tickets?

Strike fund ready to go. Bring it on!

Go take a look at Airtran.com and try to book a few flights. Yeah, we may offer a few $29 tickets between ATL-SAV, but alot of tickets are going for $200, $300, and even $500 for some business class one-ways. Who would have ever guessed Airtran would charging $1000 roundtrip for some of their flights?

Our arguement should be we are the second hardest pilot group out there and we have been profitable for 8 years straight, where is our share? Not quit selling $29 dollar tickets.

 

[Eagle757shark]

If the economy was doing great, we probably could raise ticket prices some more. Right now, I think most Americans are about tapped out. Credit cards are about maxed out, house equity is dropping, and gasoline prices are straining alot of middle and lower class Americans (which make up alot of Airtran's traffic).

We will have to see if these ticket price increases that have been going through over the last 6 months start to reduce these record load factors that most airlines have been enjoying. Do you really think Airtran sets their ticket prices to intentionally have one of the worst net income profit margins in the business for 2007? I think it pretty tough to add 10 airplanes a year, add 5% load factor year over year, and increase ticket prices significantly all at the same time. I think all in all, Airtran has done a pretty good job growing consistently and profitably. Just look around the industry if you want to see some crappy airline business plans (Midwest, Frontier, Spirit, USAirways, ATA).

I will agree that our FO pay is crappy, and that our Captain's don't need one cent over cost of living adjustment (and maybe not even that) until our FO pay comes alot closer to industry standard (especially for years 2-6).

I'm well aware of the economics! Our contract has been amendable for several years now. If the airline needs to adjust their delivery schedule or sell airplanes, more power to them. If it helps AirTran's bottom line, I don't have an issue with it. But the pilot contract is another animal. Don't get on this board and be a fool to make us think that we need to start thinking about concessions because of the economy. Whatever happens, negotiations need to be done behind closed doors between the negotiators on both sides, NOT IN THE MEDIA! We have a business and there is a cost to doing business. If you are selling out your flights, that tells me you didn't charge enough for the tickets....bottom line increase your yield! I would rather see 60% load factors and AirTran earning good profits, then 90% load factors and AirTran barely making a profit. Now that it is the job of the executives to figure out the medium to make it work, that is what they are paid for. But not off the backs of labor.

Oh by the way, everywhere in america cost are going up. At the grocery store milk, bread, fruit are going up because of the cost of fuel. The grocery stores are passing that cost off to the consumer. So are the gas stations. Bottom line.....airlines have to do it as well.

 

[71driver]

the variable for high oil prices is ticket prices not employee pay....does he actually think we believe that crap!!!
that makes me think he is going to be another anti-labor CEO way to go bobby boy, oh and by the way bob the price of oil was not 65.00 dollars a barrel when you presented that offer.
The funny thing is you only have to look to Southwest to see how an airline with very intellegent management can run, Southwest makes most of these other airline managements look like morons.

 

[Andy]

Our contract has been amendable for several years now.

I've noticed over the years that in good economic times, management drags its feet. In bad times, they're right there at the negotiating table.
It stinks, but the RLA is stacked in management's favor. Try to get early contract negotiations when times are good - it ain't gonna happen!