Consider Taking Off The Rose-Colored SWA Glasses For a Moment and Discuss...

[Skyboy722]

As I read this thread, it’s very evident to me that most of LUV guys just don’t seem to understand how lucky their fuel hedge strategy has worked out for them since 911. LUV has basically been paying ½ price for their fuel the last four years.

There is not a single pilot at SWA that does not fully understand this.

Since LUV pretty much sets domestic prices, they prevented the rest of the airlines from correctly pricing the cost of air travel to aid in the recovery from 911 and left the rest of the industry in a very vulnerable position for any run-up in the price of oil which is now the case.

What do you suggest SWA should have done? All they did is correctly price the cost of air travel for SWA. Where does SWA's responsibility lie beyond that?

This time around it looks like LUV’s strategy is a scorched earth policy with death to all but them. I got to wonder if the higher ups at LUV really think a re-regulated industry or foreign ownership will be in their long-term best interest because that’s where the industry is headed if the of price of gas doesn’t start coming back down.

So you suggest that it's in SWA's best interest to keep competitors healthy to avoid re-regulation of the industry? While I actually do understand your core point here, you have to admit, that's an impossibly complex strategy, that involves a heck of alot of BIG assumptions. I think a more reasonable strategy is to keep SWA as healthy as possible for as long as possible.

The truth is LUV’s fuel hedges have masked their increasing costs over the last five years. Without the fuel hedge advantage the past few years, life would be radically different over there. Though Southwest does continue to possess some productivity advantages, it is nowhere near the major advantage it used to be before 911.

I fully agree.

Like I said before on another thread, LUV starts losing their major fuel hedges after this year. By 2010 their cost advantage is basically eliminated since the other airlines do have some cheaper hedges.

This one has been disproved over and over. If you go back a few years, you will see that our hedges were supposed to have run out by now. This is a constantly evolving position.

It’s hard to comprehend, given their fuel advantage, why the LUV pilots haven’t capitalize on it and sought better pay, retirement, health benefits, etc. that would have helped the rest of the industry. Instead they seem to keep cratering our profession and career with the likes of Age 65 and trying to increase the annual 1000 FAR limit.

We ARE trying!!!!!!!!!!! Not sure what you're talking about with the 1000 hour thing, and don't even get me started on the 65 thing. Not happy on that one...

 

[AA767AV8TOR]

I'll take the bait though- and ask you what you think SWA should've been doing, if not competing and taking every advantage they've earned?

And don't talk about pay when you're flying around 777's around for what they're flying 73's. They're undercutting ticket prices--- YOU are undercutting the piloting profession. I've never been less proud to be a legacy pilot w/ what guys at all 6 airlines have been willing to fly for.

I agree with your assessment. But let me ask you this- If you had been Gary Kelly for the past six years, would you have done anything differently? Also by your statement you allude to the fact you support price collusion or some sort of oligopoly- even if it's intent was magnanimous. Do you really think Carty/Arpey wouldn't have done the same if they were in a position to hedge and then turn the screws to whom ever they could? I simply believe this is free market capitalism (or Darwinism) playing out for better of for worse.

Waveflyer & XR650R,

As both of you say, SWA has taken every advantage of its oil hedges which is its divine right in our dog eat dog world. It’s just unfortunate for the rest of us (and to the American public) that SWA was able to gain such a cost advantage on the heels of 911 and at such a critical time in US aviation history.

Southwest was one of the few carriers with cash after 911 and made a good (and lucky) investment in oil futures. By winning the lotto on fuel hedges, they have been able to keep prices artificially low and, as such, have not allowed the rest of the airlines to correctly price the product to our customers which; which in turn, has poorly positioned the rest of us for the current downturn.

The American public is in for quite a shock next year as they find out the results of Southwest’s hedge victory – much less service for everyone especially in the smaller towns and cities and ultimately higher prices as their hedges run out. The end result for us and the profession is less jobs and worst contracts (Section 1113’s come to mind??) which will ultimately come back to bit the Southwest guys as their hedges run out. Southwest is already drastically cutting back on growth and look at what they’re paying for gas!!

With the entire industry facing collapse in 12-24 months if oil prices stay at or near their current levels; there will be a strong call for re-regulating the entire industry. Bob Crandall has already been hitting the airways on behalf of the ATA calling for such. With Southwest keeping prices low in this environment, they are hastening the collapse of the entire industry. Perhaps that is what they want, but again I ask, is it in their long-term best interest.

This is a little off subject, but I have been stressing to APA and want to alert the ALPA and SWAPA pilots, that if the entire industry does fall into bankruptcy and re-regulation, management will be doing everything possible to protect their revenue streams; we, as labor, must do everything possible to protect our professions and careers. All the unions must get on the same page and perhaps come up with some minimum pay scales (so we’re not constantly cutting each other off at the knees) and put the furloughed pilots in some industry-wide common pool based on various criteria to be offered jobs as they come open again.

It’s not going to be pretty the next couple of years, but we all need to tow the line, stick together, and not let the entire profession fall into disarray and panic.

AA767AV8TOR

 

[Freight Dog]

SWA, unlike every other U.S. airline, fosters the environment of taking care of the employees FIRST.

Other airlines look STRICTLY at the spreadsheet and employees are a cost unit to them and approach them as such.

Something to be said for human factors as well...

 

[AA767AV8TOR]

We ARE trying!!!!!!!!!!! Not sure what you're talking about with the 1000 hour thing, and don't even get me started on the 65 thing. Not happy on that one...

Skyboy,

See my responses to your questions posted above. About the 1000 FAR limitation relaxation sought by some LUV pilots, it’s been a nasty rumor out on the line since the company has basically run the limit on productivity improvements and the pilots are looking to other alternatives to increase their W-2 pay. If true, it would roll back 60 years of important safety improvements sought by ALPA (usually written in blood) and forced on the government. Perhaps you can care to dispel the rumor??

Again, it’s unfortunate given the major advantage in costs that Southwest holds over the rest of the industry, SWAPA has not be able to capitalize on some better improvements but has instead given the rest of the industry Age 65 (it was the leader on the Age 65 issue) and 401K’s pension plans. Moreover, it’s come to light that many of you are sitting on a pile of worthless stock options. Your union refuses to call APA to even discuss the issue. Your pay remained high since you piggy-backed on UAL and Delta and luckily you didn’t have to suffer the catastrophe of losing crews and airplanes on 911 which lead to 1113’s and bankruptcy.

It’s disappointing to see the while the love fest was going on for Herb a couple of weeks back, the company is still playing you on your contract negotiations. You were in an awesome position to make some great progress for all of us, but it looks like the opportunity has once again been floundered.

Do you really think if the entire industry collapses that the Southwest employees somehow will be insulated from the implosion?? It’s reminds me of the great line from Andrei Bonovia in Hunt for Red October, “You arrogant a**. You've killed us!”

AA767AV8TOR

 

[firstthird]

I have heard nothing from SWAPA or any SWA pilot about the 1000 hour rule. Plenty of SWA pilots opposed the 60 to 65 age change but what really broke the damn in congress was ALPA shifting to a neutral/supportive of changing age 60.

401Ks were coming SWA or not. Look around the fortune 500 these days. The only job types that consistently have DB plans are gov't unions (teachers, fire, police, transit workers) and military/civil service. Most private corporations have gone to DC programs. You'll notice the difference b/t the Army and SWA is that one needs to turn a profit. Schools don't. neither do subway systems.

If it makes you feel better to blame SWA for the demise of the industry, but all means, hold your grievance to your breast and treasure it.

The rest of us are doing our best to make our way in the world as we find it now, not as it was in 1970.

And for all the nay saying about how much better it was back then, sure, for the 30% of us that would have this job if it was still regulated, it'd be pretty good. The other 70% would be doing something else.

 

[waveflyer]

I think you still underestimate WN's position... w/o the hedges, wn has the lowest costs in the industry except for air tran, i think. They'd still be able to set prices that make them profitable...

It's pretty strange to go after WN when they are pricing to ward off the virgin's and skybus's of the world... in all honesty- they compete against other LCC's primarily-- and against the car- Not against legacies.

In the pilot market world- the legacy advent of the disenfranchised and underpaid "regional-pilot" has done nothing but supply VA and skybus w/ pleny of qualified jet pilots for which their undercutting wages are a step up.

AND... there is no question SWA's pilots are the happiest.... And... they have proven that their contract can lead to very very low costs... Come time for contract negotiations and why don't all legacy guys just try to imitate WN's? That would be my argument anyway.

In the end- we should be setting up a system that allows us to change companies - We have bailed out bad airline after bad airline-- that's our fault, but understandable considering our seniority system.

 

[satpak77]

401(k)'s

a quick note on 401k plans

these came into popularity in the 80's when it was decided that the "corporation" should not be "burdened" with paying out retirement and the burden should be shifted to the employee. Thus it is up to the employee to participate, and at times decide completely on his own, what funds, stocks, etc his 401K money should go.

The 401(k) was not designed for the employee, it was designed for the employer.

from http://en.wikipedia.org/wiki/401(k)

....A primary reason for the explosion of 401(k) plans is that such plans are cheaper for employers to maintain than a defined benefit pension for every retired worker. With a 401(k) plan, instead of required pension contributions, the employer only has to pay plan administration and support costs if they elect not to match employee contributions or make profit sharing contributions. In addition, some or all of the plan administration costs can be passed on to plan participants. In years with strong profits employers can make matching or profit-sharing contributions, and reduce or eliminate them in poor years. Thus 401(k) plans create a predictable cost for employers, while the cost of defined benefit plans can vary unpredictably from year to year.

 

[Skyboy722]

Waveflyer & XR650R,

As both of you say, SWA has taken every advantage of its oil hedges which is its divine right in our dog eat dog world.

It's more than a right, it's their responsibility!!! To the company, it's employees, and shareholders.

By winning the lotto on fuel hedges,

It wasn't a lotto. Why does everyone keep saying that?

they have been able to keep prices artificially low

Artificially low? They priced a ticket to make a profit and be competitive based on their costs. Nothing artificial about that. I ask you again, where does SWA's responsibility lie beyond it's own health?

The American public is in for quite a shock next year as they find out the results of Southwest’s hedge victory – much less service for everyone especially in the smaller towns and cities

Not sure I understand. SWA isn't leaving any markets they serve. If you're referring to the loss of service to small towns by other airlines, then I think you need to look at the cost of fuel, and not SWA.

and ultimately higher prices as their hedges run out.

But were'nt you just complaining that SWA was holding prices "artificially low"? So the American public should have had this shock years ago?

It’s not going to be pretty the next couple of years, but we all need to tow the line, stick together, and not let the entire profession fall into disarray and panic.

I absolutely agree 100%.

 

[Quimby]

Skyboy,

See my responses to your questions posted above. About the 1000 FAR limitation relaxation sought by some LUV pilots, it’s been a nasty rumor out on the line since the company has basically run the limit on productivity improvements and the pilots are looking to other alternatives to increase their W-2 pay. If true, it would roll back 60 years of important safety improvements sought by ALPA (usually written in blood) and forced on the government. Perhaps you can care to dispel the rumor??

Again, it’s unfortunate given the major advantage in costs that Southwest holds over the rest of the industry, SWAPA has not be able to capitalize on some better improvements but has instead given the rest of the industry Age 65 (it was the leader on the Age 65 issue) and 401K’s pension plans. Moreover, it’s come to light that many of you are sitting on a pile of worthless stock options. Your union refuses to call APA to even discuss the issue. Your pay remained high since you piggy-backed on UAL and Delta and luckily you didn’t have to suffer the catastrophe of losing crews and airplanes on 911 which lead to 1113’s and bankruptcy.

It’s disappointing to see the while the love fest was going on for Herb a couple of weeks back, the company is still playing you on your contract negotiations. You were in an awesome position to make some great progress for all of us, but it looks like the opportunity has once again been floundered.

Do you really think if the entire industry collapses that the Southwest employees somehow will be insulated from the implosion?? It’s reminds me of the great line from Andrei Bonovia in Hunt for Red October, “You arrogant a**. You've killed us!”

AA767AV8TOR

Kind of ironic that an AA guy is complaining that SWA isn't "playing fair". From what I've seen, AA doesn't exactly "play fair" when it comes to their competitors.

Am I wrong?

 

[waveflyer]

cough*cough* Wright amendment* cough... excuse me...