Is the Southwest pay/contract sustainable at current market?

[scoreboardII]

Your implying a democrat stopped regulation so that's good, in fact, he stopped regulation so the masses could fly cheap. They will never regulate if it means paying for what they get. Right now joe blow can fly coast to coast for $400. If you drove a car getting 40mpg you would spend that on just gas, let alone hotels and food. Your confusion is you think deregulation which is bad for some companies, yet very good for others and good for all passengers, is somehow bad. It isn't , and just becuase some companies have failed, deregulation is not the sole reason, economy in general, 911, etc.

This is a free market, adapt or fail. Every business is subjected to the exact same issues airlines face yet they fail, why? Huge sums of money chasing the prospect of a fast buck. GE capital is the prime reason.

Guess what, they will never regulate again. Safety is cooked into the process, it's irrelevant in this discussion. The only way to make a buck is to undercut the competition, swa does that well, and will continue to do that well.

Local taxis are regulated because local politicians get paid by taxi companies to regulate them.

I agree charging a segment to undercut a competitor should not be allowed, so tell that to DL, AA, etc who use international fares to fund domestic routes.

 

[enigma]

Well I hear some of the Southwest pilots are making what I might call stupid money over there, and it scares me a little. Hearing 10 hours of sick a month, so everyone calls in sick to drop trips into open time for others to pick up at 150% or 200%. Capts making 360k to 400k and FOs 180k to 200k. Scamming the system or at least that is probably how management sees it. They signed off on this too.

So do you think the current market dictates this?

Ignoring this,,

Is this the average? The way I see it making 30% more than you piers is not sustainable long term in this business and tends to lead to tragedy. I think the average is FO 150k and CA 300k.

So are these numbers justified in the current market?

Justified? Heck Yeah. Every airline pilots' decent wages are justified.

Sustainable? I hope so, but seriously doubt it. At Spirit, we've doubled Captains pay (hourly rates) in the last ten years. Even going to the extent of a strike two years ago,......and we're still making yearly wages somewhere between 50 and 60 percent of SWA pilots. Our wages are more in line with the average than are SWA wages. I seriously hope that SWAPA can maintain their current rates, it gives us negotiating leverage when we next negotiate; but I know management and I find it hard to believe that SWA managers will not work their tails off to bring their costs into line with their competitors.

 

[HA25]

... I seriously hope that SWAPA can maintain their current rates, it gives us negotiating leverage when we next negotiate; but I know management and I find it hard to believe that SWA managers will not work their tails off to bring their costs into line with their competitors.

I have only been in this industry some 20 years and find this statement very depressing. To think that the bar is now set by Southwest was bad enough, but to hear people resigning themselves to the reality that this bar will be lowered is down right scary...

God help us if this is what the average pilot feels will happen.

 

[scoreboardII]

Then have a plan b buddy, have a plan b.

And one more regulation comment, if that happens, 50% of the market will go away, meaning half the pilots will lose their jobs, you ok with that?

 

[Full of LUV]

you'll recall it was another Democrat that reigned in De-Regulation... Carter. So your argument is without substance.

With that said, de-regulation has been the single biggest failure for the airline industry that I can think of in it's 90+ years.

The number of airlines that have failed, and been bailed out by the government and taxpayers as a result is too big to list. The idea that a tax cab, a train or a bus has price controls and protected routes yet, the part of the transportation sector with the largest capital costs, and fuel costs has to compete in the pure free market for revenues is ludicrous!

Prior to De-regulation the airlines made a fair profit, safety wasn't compromised and labor was paid fairly... now the only two places airlines can squeeze costs is safety and labor... this is where we are today.

First of all, deregulation is what allowed SWA and Airtran to flourish.... to advocate for re-regulation now is like, heh, we're in, slam the door quick.

Second, what "government / taxpayer" money are you referring to in the BK process? The only gubment money the industry had was right after 9/11 (Bush) in the form of ATSB loans (govt backed private industry loans) to AWA and maybe a couple of other very small airlines. I'm pretty sure that those were even paid back because the terms were not that good for long term.

Otherwise, BK socks it to the shareholders and creditors of a particular company. The fact that a company can survive BK is because on the whole, their business to the creditor is more valuable than demanding a liquidation at the BK proceedings. Look at DAL, top creditors were Employees, Boeing, Pratt Witney, and COKE (through aircraft purchase bonds where the Coke gets the depreciation and income while leasing the jet to the airline). Those companies and entities took the haircut. In fact, Govt get's EVERY dime it's owed in taxes as that debt is specifically forbidden from being discharged by one cent.
So, when an Airline goes BK if it's small and on shaky ground anyway like skybus or independence air, etc, there is no creditors that want to take a haircut and continue to do business, they want as much cash out of the corpse as possible, but when the airline is large and has a viable biz model, there is no shortage of new creditors who are willing to loan the new company capital and pay off the old debt that is not discharged in the process. Usually old creditors in this case will get cash and some new stock in the emerged company. All these negotiations is what takes an army of well healed lawyers to complete, hence the BK process is actually very expensive.
Bottom line, I luv it when all of the haters come on to say "govt / taxpayer" money is used to bailout airlines when it simply hasn't been the case, pretty much ever.
LUV

 

[jonjuan]

I agree charging a segment to undercut a competitor should not be allowed, so tell that to DL, AA, etc who use international fares to fund domestic routes.

So, Dal, AA, etc don't have price competition on international routes? Please show your data that intl fares fund domestic routes. Or are you just playing the blame game?

 

[Full of LUV]

So, Dal, AA, etc don't have price competition on international routes? Please show your data that intl fares fund domestic routes. Or are you just playing the blame game?

You know jonjuan back when SWA had the brilliant fuel hedges and was charging $50 to fly in your "free to move about the country" putting the screws to the legacies who had no financial ability to hedge....... I'm sure they were able to just cover their costs.
For SWA to now complain about airlines offering a product at below cost of production is almost too funny to comprehend.
That said, bizness is bizness and SWA has played the game the last thirty years much better than most.

 

[enigma]

I have only been in this industry some 20 years and find this statement very depressing. To think that the bar is now set by Southwest was bad enough, but to hear people resigning themselves to the reality that this bar will be lowered is down right scary...

God help us if this is what the average pilot feels will happen.

Try reading what I wrote instead of what you think I wrote. I said that SWA mgt will try hard to bring their costs in line. Whether they succeed, or fail, is up to SWAPA and their members.

Did you notice I'm with a group that handed in our jobs and careers to improve our collective position?

 

[redflyer65]

For SWA to now complain about airlines offering a product at below cost of production is almost too funny to comprehend.
That said, bizness is bizness and SWA has played the game the last thirty years much better than most.

You mean after everyone of those competitors ran through bankruptcy to cut their cost, because they were run so poorly there was no other option? Then where's the honest competition?

 

[BILL LUMBERG]

Heck Red....

I'll just start HONESTLY by writing on a cocktail napkin and then HONESTLY beg to only fly within the terms of the Wright Amendment then HONESTLY ask to later drop those rules, then HONESTLY undercut my competitors by paying my employees peanuts and have them stripped of all benefits and HONESTLY tell them to bring their own training, then HONESTLY ......

It goes on and on.....your honest competition is gladly invited by you guys when all is good and carriers that have been around for DECADES longer than you and were the actual birthers of the airway system as you so well know it go and use a LEGAL HONEST system to restructure their debts, you cry foul....

I hope you never have to see the day.......obtw, you got your big paycheck on the backs of the Uniteds and Deltas who jammed it through in 2000, so you are welcome!