Jet Blue Productivity Advantage

[pilotyip]

How does United address crew cost per hour on the A-320 $916/hr? How does USAirways do it at $1,063/hr Jet Blue $409 per hour. How can you make money flying against someone with that cost adavantage? Jet Blue guys take home great money they are not in proverty by any means. But they do fly alot of hard block hours to make their paycheck. The United crew works an average of 427 block hours per year and gets paid an average of over 900. Did management elect to make the airline unproductive?, did the pilot group ask for this in bargining?

 

[usna91]

Seems to me that just comparing costs per hour doesn't tell the whole story.

A Jet Blue Captain who's been with JB for three years makes X.

A UAL Captain who's been with UAL for 20 years makes Y.

Don't expect JB's cost structure to stay low forever. If they succeed their labor and equipment costs will increase over time. I've heard smart investor-types say that JB's costs are "artificially low" at this point in time.

Regardless, don't expect the 12+ year Captain (2012) at JB to pull down the same check he/she makes now...and I'd bet pay in the out years will be more representative of the rest of the market.

JB's costs will probably go up, and if UAL is to make it in this environment, their labor costs will probably decrease.

 

[Dieterly]

How much longer before "JeffG" chimes in, because someone said something negativ about JB?

I've heard smart investor-types say that JB's costs are "artificially low" at this point in time

 

[AlbieF15]

So are you saying an aspiring airline pilot should avoid JetBlue right now since they are eventually going to have a higher cost structure? What are the alternatives? Sit on the sidelines until an ALPA backed carrier starts hiring again?

Perhaps all those guys I've been helping prep for their JetBlue interviews that are from USAir are idiots and just need to wait around for 10-12 years until JetBlue has problems of its own.

Personally, I don't think labor costs are the big issue at JetBlue, nor do I think they will be in the next 10 years. The company is built from the ground up on the premise that if you take care of your customers, they will return and pay a "fair" fare and keep you profitable. You just need to manage your costs to insure you can make money without having to charge $1000 for walk up business class tickets. AirTran, SWA, and Frontier are also doing the same thing, but JB seems to be both the customer and media darling. SWA has been profitable for years, even as flight crew numbers have increased and average tenure has gone up.

I don't know if JB can make money if/when their crew costs 900 bucks/hour. But I DO know United can't make money when its management bungles millions on dreams of buyout mergers, a fleet of business jets for high end service, and the other various hotel/rent-a-car/computer reservation systems they have bought and sold over the years. Nicer seats or satellite TV to make customers more comfortable?...nah...build a nicer frequent flyer lounge. Now that the business travelers have evaporated, many of the majors have forgetten how to take care of the "backpack" customer they used to simply tolerate as a cost of doing business. I'll know JetBlue is on the way to death only when Neelemen hires Stephen Wolf on his staff.

As an ALPA member, I appreciate the benefits that majors have tradtionally provided...good work rules, A and/or B plans for retirement, and a competitive wage. However, those who sling spears at SWA and JB working for "less" compensation ignore the various profit sharing/stock option plans offered to the employees. Those "underpaid" JB employees are hoping that by building a profitable business model (which DOT said United was not) they eventually will be more than rewarded by their investment in the company. Personally, I'd like to have some FedEx stock as part of my compensation package at my carrier--if only to convince the media we aren't a bunch of "overpaid underworked pilots" who have no stake in the company's profitabilty. If JetBlue employees choke their golden goose for an "industry leading" wage, they know while their paychecks go up, their total net worth goes down. Guys who left other carriers over the last 2 years to start with JB are not different than the rest of us--they want to maximize their earnings. However, when they compare the wealth/security of a 12 year Captain at SWA verses guys (or gals) who had a great contract only to see their career disappear when their carriers were liquidated or merged (lets see...Braniff, Eastern, Continental, Pan Am, Flying Tigers, TWA....) they decided to give the former a try.

As for egging on Jeff G...well...imagine a guy who likes his job and is proud of his company in this industry! What an anomaly! I'll bet he even tries to save JB money here or there with gas saving techniques, and even has the gall to be pleasant to other crew members and passengers. He has got what most would love to have....a job he's proud of, a wage he thinks is fair, and a company that for now, at least, has found a way to be profitable in a tough market.

Std disclaimer....I fly rubber dogsh!t in the middle of the night sitting sideways....and I may very well be wrong.

 

[Eagleflip]

But you're not...

 

[Jeff G]

How much longer before "JeffG" chimes in, because someone said something negativ about JB?

You misunderstand. I try to speak up about incorrect information, not negative information. Of course, rumors being rumors, most of the incorrect information is also negative.

Naturally wages are "artificially low" at this point. How could they not be? You only have your most senior people at the lowest payscale once. After that, barring something unforeseen, wages rise. Why would I argue with that? I'm actually kind of insulted you think I'm so blindly loyal that I am unable to recognize obvious truths when they're presented, or that I would idiotically defend the indefensible. I love my job, but I'm not stupid.

 

[jointops]

Eagleflip,

Amen!

Albie,

You always do an excellent job of an explanation. For those of us who are proud of JB, thanks for sticking up for the little guys. You're right on the money!

Happy Landings,

 

[HPaul3]

Well said, Jeff G and Albie.

 

[ShaggyF16]

Atta boy!

Albie -

You rock.

Couldn't be more astounded at the disinformation spread by union and other un-named sources about our company. I am happily employed by a great company that pays a great wage and who's leadership I trust.

Those of us in Blue do not wish any one else at any airline any ill will. We have created a low fare customer base at every destination we serve as opposed to "stealing" customers away from other carriers.

As a result, more folks are flying now on our routes than ever did before we were in business. If customers will pay pilots $250,000 to fly an A-320 around the country, then more power to those pilots.

It has nothing to do with what folks think "industry leading wages" are and everything to do with what the market will bear. I see lots of folks flying with us for <$300. If the price was higher, they wouldn't fly at all.

I sincerely hope the major carriers can get their costs under control. At the same time, they need to focus on their strengths: serving people through their "connection" carriers to global destinations with First Class service (if it is so desired).

If I were them, I wouldn't worry about what impact a fleet of 35 airplanes has vs. a combined fleet of 1500.

Folks that want to choke off an industry in order to raise (or justify) their own wages will ultimately get what they deserve - which is a market-driven wage for a market-demanded service. If you can't stand the heat of that reality, find a job in a non-capitalist economy.

Honestly, best luck to all in this roller-coaster industry.

Shaggy

 

[Race Pilot]

Randy - great subject you started here. BTW, just got back from two days of testing at Talladega and things are looking up for the boys from down the street in Michigan!

Albie - marvelous response as always. I must make one minor correction however.
"Sit on the sidelines until an ALPA backed carrier starts hiring again?"
ATA is now respresented by ALPA and is hiring. I know most folks don't count them as a major (which technically they are) or a factor in today's market but they are trying hard to do good things.

jointops, Jeff G, Eagleflip - I know you guys are proud to be with JB and well should be. They are a great airline with great people and are doing great things. I am currently with ATA having started class there five days after my JB interview. I have now been called for a class with JB starting Jan 6th and am agonizing over what to do. I have had PMs from several people offering great advice and I have worked hard to make as close to an "apples to apples" comparison as I possibly can. At this point it's still a toss up in my mind. I would welcome more input from anyone either by PM or here in public about which route to take. It's killing me trying to figure this out but believe me I am very thankful to even be in this position.