Can Southwest put the last nail in coffin?

[SkyWstman]

Southwest has a great advantage over all carriers right now with their fuel hedges in place. I think I remember reading they pay an equivalent of around 28 dollars a barrel for about the next two years. Could that negate any cost savings the legacy carriers obtain from their work groups? Even the low cost carriers aren't hedged. Two years is a long time to hammer the rest of the ailing industry.
How much will the legacy carriers have to give back to level the playing field if that is even possible?

 

[CaptSeth]

1. Yes

2. All wages, benefits, and workrules

Any questions?

OK, that's the end of the facetious answer. The real answer is that SWA has the sharpest people around in their finance and planning depts.; the other majors are just feeding off of each other's incestous relatives in an orgy of canabilistic self-destructive incompetence. Well, some carriers have decent management, like JetBlue, but the EMB order will separate the men from the boys and I have questions about where all those airplanes are going.
I don't believe it is morally correct to punish employees for poor strategic planning, however that's the way the industry works. The pendulum swings both ways, though, and when oil stabilizes and yields improve - look out.

 

[jetblue320]

Even the low cost carriers aren't hedged.

Well, that's not totally correct. JB is hedged into next year. As it stands right now, we are hedged at 20%. I know that is a small amount compared to SWA and the others (if any), but with oil bouncing around the upper $40's, it's better than nothing.

Not trying to flame you or start an argument, just pointing out your incorrect statement.

C yaaa

 

[LJDRVR]

...How much will the legacy carriers have to give back to level the playing field if that is even possible?

Not even possible. For instance, if USAir's pilots worked for free, their CASM would still be well in excess of most LCC's. (I forget the exact figures, but the math has been done by folks smarter than me.)

The legacy carriers are attempting to cut cost in any way possible. Unfortunately, their management will use the public's perception of us being greedy airline pilots to divert attention from from the real cause of their problems: Incompetent leadership, whose lack of ability to react swiftly to adverse market and industry changes, coupled with a myopic view of taking whatever action is required to satisfy their excessive personal short-term financial greed, at the expense of their organizations future health.

Instead of being prosecuted for malfeasance, they are given golden parachutes by their peers, and instead of being held accountable, they slither into a position elswhere, their way greased by others of their ilk, a band of raping and pillaging brothers, that does a far better job of protecting each others interests than some of us aviators do.

Southwest and other LCC's are not to blame for the legacy carriers' plight. Southwest is not "puting the nail" in anybody's coffin. The leadership of the legacy carriers has done that quite nicely themselves.

 

[jetalc]

Fuel Hedging

Also, FRNT is hedged about 25% right now...

 

[blzr]

the other majors are just feeding off of each other's incestous relatives in an orgy of canabilistic self-destructive incompetence

That is a great line to describe the current state of legacy carriers

 

[SkyWstman]

Thanks for the responses. I've just been curious as to whether the game is realy over. It doesn't seem like there are anymore options for the legacy carriers.

 

[Vik]

You just might be surprised what is going to happen in 2005 with these legacy carriers cutting out everything from an extra olive in first class to pensions.

They have the resources to make their employees work for peanuts and hammer the heck outta the no-frills guys. Bankruptcy court will let'em do it too!

 

[RVR300]

Dream on Vik

 

[canyonblue]

He is dreaming.

 

[NEDude]

They have the resources to make their employees work for peanuts and hammer the heck outta the no-frills guys. Bankruptcy court will let'em do it too!

Tell me, who are the "no-frills" carriers? Most majors provide no meal service, many charge money for headsets for a mediocre movie, heck American is taking pilows out of the MD-80s.

There isn't much that seperates legacy carriers from low fare carriers other than an international network. And some low fare carriers provide much better amenaties and service than the legacies.

 

[Vik]

i'm not dreaming. Just pay attention to the news and what UAL is doing in bankruptcy court and you'll see what is slowly taking shape over there. USAir is doing it too and Delta and AA aren't far behind.

 

[The5th]

I think they meant your pretty airplane picture and not your opinions and statements. Nothing wrong with dreaming though....

 

[Vik]

Thats true.

Doesn't mean the smaller airlines won't feel the pinch with what the top 3-4 are going to do to survive.

Tell me, who are the "no-frills" carriers? Most majors provide no meal service, many charge money for headsets for a mediocre movie, heck American is taking pilows out of the MD-80s.

There isn't much that seperates legacy carriers from low fare carriers other than an international network. And some low fare carriers provide much better amenaties and service than the legacies.

 

[Shocker]

Vik, it is the loveliest picture out there in my opinion, but with your profile, you don't even belong on this board. Just because you subscribe to airliners.net and dream with them, doesn't mean you control the industry.

 

[Juvat]

Good for a laugh

i'm not dreaming. Just pay attention to the news and what UAL is doing in bankruptcy court and you'll see what is slowly taking shape over there. USAir is doing it too and Delta and AA aren't far behind.

It takes balls to walk into a saloon with no gun (in other words, running one's mouth with no credibility).

...it's almost as entertaining as Lowecur.

 

[Vik]

Uh, okay. So I need to actually have flown for the airlines to understand Economics? Maybe it could be my multiple degrees in Economics and a thesis on the airline industry?

Seriously folks, you don't even know me and you're judging me by my profile and not by what I've written. My profile isn't up to date, but it doesn't change that I've never flown for a Part 121 carrier.

I just read an article on CNNfn that quotes the ATA and JetBlue CEOs as saying the same thing, and I'll repeat what I said ...

The "big guys" are going to use bankruptcy courts to squash costs (including your precious labor contracts), and operate on purpose at a loss to get "quick cash" and continue to use the loss to get the bankruptcy judge to give them what they want.

SWA is probably the only one that is well protected mainly because of the fuel futures they own.

Anyway, I'm done saying what I wanted to say. I guess I'll understand the business a little better once I'm at the controls of some heavy iron

 

[Juvat]

I guess I'll understand the business a little better once I'm at the controls of some heavy iron

Naw...you don't have to fly the heavy iron. You just have to start selling insurance like Lowecur, then everything will become clear.

 

[blahshmah]

Vic,

I'd have to agree with you. With your qualifications you could easily take over as a major airline CEO. Certainly you couldn't do any worse.

Multiple degrees and a thesis... ... you are killling me!

If you don't get the CEO job you could make a killing as an airline stock analyst.

Regards,
BS

 

[SWABUM]

Vic, you're right. You're an expert, you heard it from the news. It must be true. If it was your local news it can't be wrong!



Get a clue. Working for an airline does give you alot more insight than reading the news.