Another Merger, Another Bankruptcy whens it gonna end!

[Jon Rivoli]

While all of the above is true, the cost of fuel today is perhaps the largest impediment today to higher pilot wages. Back in 1999, jet fuel was about $.40/gal., today it's around $3.30/gal. A decade ago fuel expense was about 15% of operating expenses, today it's about 35%.

Until fuel prices come down, there will not be money to pay higher wages. And, to those who say to 'just raise ticket prices', higher ticket prices mean fewer passengers. Lower load factors mean schedules get reduced, planes get parked, pilots get furloughed. RJ's are another response; rather than abandoning routes or cutting frequency to one or two flights per day, the small jet allows marketing to adjust the number of seats in a market in more precise increments. A full RJ will always be more profitable than a 150 seater with 50 empty seats. Those who focus only on the higher unit cost of the smaller jets are ignoring half of the equation (Boyd).

About a third of the increase in the cost of oil is due to the FED inflating the money supply in the name of stimulus. If jet fuel were only $2/gal. we could all be making a lot more money and buying a lot more stuff. I like that kind of stimulus much better than the kind that funnels money to OPEC.

 

[HalinTexas]

"And then, if bankruptcy were allowed to work properly and weed out the companies that couldn't run an airline properly, we'd STILL be out of work."

As it should be. We would also be less likely to accept work on a sinking ship. At least when a company ceases to exist the stronger thrive. There would still be more seats available, and stable jobs, than under a regulated environment. I'd rather be susceptible to the free market than to the whims of the political cycle.

"It all works around the same premise: to many seats in the air at too cheap a price, brought on by the fact that there's no accountability for bad business decisions and labor is the only party that has to pay the consequence."

False statements, all. Your premise, as you've stated, is about your job and the income it "should" provide you. If there are too many seats than the market will bear, then the market will/should weed out the weak. The market should not be artificially created, propagated, via regulation. See Solyndra and the others that have failed recently. I agree that there isn't enough accountability for poor management decisions, but there is some. It's all depends on what the BOD negotiates with the officers, and what is negotiated with the creditors. The BODs are the ones that truly should be held accountable in the end. As to the last point, Boeing as well as all the other contractors either don't recoup what is owed in BK court, or receive much smaller amounts of income (less or no profitability) than before BK. These are deemed the "secured creditors." This might result in lost jobs on their end, as well.

 

[Lear70]

While all of the above is true, the cost of fuel today is perhaps the largest impediment today to higher pilot wages. Back in 1999, jet fuel was about $.40/gal., today it's around $3.30/gal. A decade ago fuel expense was about 15% of operating expenses, today it's about 35%.

Until fuel prices come down, there will not be money to pay higher wages. And, to those who say to 'just raise ticket prices', higher ticket prices mean fewer passengers. Lower load factors mean schedules get reduced, planes get parked, pilots get furloughed. RJ's are another response; rather than abandoning routes or cutting frequency to one or two flights per day, the small jet allows marketing to adjust the number of seats in a market in more precise increments. A full RJ will always be more profitable than a 150 seater with 50 empty seats. Those who focus only on the higher unit cost of the smaller jets are ignoring half of the equation (Boyd).

About a third of the increase in the cost of oil is due to the FED inflating the money supply in the name of stimulus. If jet fuel were only $2/gal. we could all be making a lot more money and buying a lot more stuff. I like that kind of stimulus much better than the kind that funnels money to OPEC.

I don't agree with much of the above. If the RJ was such a great idea, you wouldn't see the 50-seater being eliminated just as fast as they can put them to pasture and companies like PCL with dozens of the things with stock prices just barely above where they're going to be delisted.

In addition, we ARE seeing fare increases. Slowly, incrementally, but they're there. And the load factors aren't falling off with the increases. What that tells me is that there's still plenty of room to raise prices before we hit a push-back in terms of lower bookings. The trick is to get ALL the carriers to raise them, which consolidation helps accomplish.

We're seeing an adjustment that should help us in the future. I do, however, agree with the pitfalls of our Dollar being devalued so rapidly... if it's not put in check, it's not going to get better in terms of fuel prices.

 

[Lear70]

False statements, all. Your premise, as you've stated, is about your job and the income it "should" provide you. If there are too many seats than the market will bear, then the market will/should weed out the weak. The market should not be artificially created, propagated, via regulation. See Solyndra and the others that have failed recently. I agree that there isn't enough accountability for poor management decisions, but there is some. It's all depends on what the BOD negotiates with the officers, and what is negotiated with the creditors. The BODs are the ones that truly should be held accountable in the end. As to the last point, Boeing as well as all the other contractors either don't recoup what is owed in BK court, or receive much smaller amounts of income (less or no profitability) than before BK. These are deemed the "secured creditors." This might result in lost jobs on their end, as well.

You have your opinion, I have mine.

Mine centers on primarily wanting the company to be profitable; it doesn't help anyone to have great wages at a company that goes out of business or files bankruptcy with an 1113(c) filing and guts the contract along with it. After that, my next immediate thought is the advancement of our career value back to what it was when I made the decision to get into this industry.

My concern regarding the passengers' ticket prices is a very, very distant 5th behind my coworkers increasing their pay and benefits as well as shareholder value. Again, all within the premise that the company primarily has to be profitable while accomplishing this.

I'll work to make my passengers happy; that's part of my job, but I expect the company to do its best to wring every available dollar out of them until ticket prices (and compensation levels) adjust for inflation from what they used to cost and what we used to make. It's a business... not a charity.

 

[waveflyer]

I think what's being missed are the underlying politics-
Both R's and Ds want a vibrant economy- cheap airline tickets stimulate business on a macro scale. We have to know what we're up against and do our best to vote our interests. Something we don't do well as pilots.
Any thought that we aren't still regulated is a bit ridiculous to me. This industry is taxed and regulated arguably more than any other.

 

[SIG600]

I think what's being missed are the underlying politics-
Both R's and Ds want a vibrant economy- cheap airline tickets stimulate business on a macro scale. We have to know what we're up against and do our best to vote our interests. Something we don't do well as pilots.
Any thought that we aren't still regulated is a bit ridiculous to me. This industry is taxed and regulated arguably more than any other.

Want a vibrant economy, remove all the gov't involvement and let the free market be free. Gov't has proven time and time again they can't succesfully run anything other than their own personal interest.

 

[waveflyer]

Ignorant post of the fledgling year

Want a vibrant economy, remove all the gov't involvement and let the free market be free. Gov't has proven time and time again they can't succesfully run anything other than their own personal interest.

 

[Lear70]

I think what's being missed are the underlying politics-
Both R's and Ds want a vibrant economy- cheap airline tickets stimulate business on a macro scale. We have to know what we're up against and do our best to vote our interests. Something we don't do well as pilots.
Any thought that we aren't still regulated is a bit ridiculous to me. This industry is taxed and regulated arguably more than any other.

True statements, all.

I just look at this as Pandora's Box that has been opened and can't be re-shut. Do I still wish the airline industry had never been deregulated? You bet. Can we go back? Of course not.

Is the situation fixing itself? In *SOME* ways, slowly, and I hope to see more of it in the future through consolidation, which will hopefully do SOME work to fix the low ticket price problem.

We shall see...

And Sig, yeah, hate to say it, but the government NEVER gets their fingers OUT of something they put their fingers INTO in the first place. Just the way we are, as a country.

 

[SIG600]

Ignorant post of the fledgling year

Tell me something gov't has done right. What regulation has done any good in the last 10-15 years?

And Lear that's because people keep voting for the status quo. If even half of Americans actually read the Constitution and the Bill of Rights, they would be pissed to realize what Washington has done and gotten away with.

 

[Smarta$$]

That's exactly right... What a mess the government made of this once-great career. :/

In the name of the free-market.