JetBlue to land in ATL

[CatYaaak]

[BHowever, LCC's are successful because they are able to offer seats at fares that they can make money on but the competition can't. They can do this PRIMARILY because their employee wages and benefits are far lower. If you disagree with me, I challenge you to provide a more significant cost savings. I invite you to visit each airline's investor relations page for the SEC reports. A breakdown of costs can be found there.

I commend jetblue on their success, and I wish their employees the best. You do a fine job. However, you cannot pretend that you are not putting downward pressure on the compensation packages for this profession. It is not something to gloat about, and I hope that my airline does everything we can to curb your growth. [/B]

I'd say being bankrupt or heading that way puts a far greater downward pressure on compensation packages.

But now I'm REALLY confused. Repeatedly I've read on these threads from those that defend high pilot wages in the face of concessions the declarations that "labor costs have no bearing on the bottom line", and " concessions can't save an airline from bankruptcy"? Here however, you invite people to read the investor relations page SEC reports as evidence to show that exactly the opposite is true.

So what you are saying now is that labor costs (and therefore pilot salaries) DO INDEED have a bearing on whether a company stays in the black?

 

[FlyDeltasJets]

I have never said that that employee wages did not have a bearing on a company's bottom line. Wages and benefits are by far the largest expense, so of course they have an impact.

However, I HAVE said that concessions alone cannot save an airline. Look at TWA, EAL, PAA, etc for proof of this. I have always said that concessions MAY be needed, and if so, they will be given. However, I do not support giving money to inept mgt so they can pi$$ it away. Concessions must be temporary, well thought out, and only given as part of a sound business plan. Keep in mind, however, that if we did give concessions, it would not be long until the lcc's would have to follow suit, or risk their competitive advantage. One would imagine that most pilots would be rooting for us to maintain the standard. It appears that is not the case.

In the meantime, if you have proof of me saying that labor costs have no bearing on a company's bottom line, I invite you to post it. If not, I have no intention of defending posts made by other people.

 

[SpeedBird]

WARNING: Long Post

FDJ:

I'll take a crack at your assertion that jetBlue is successful only to the degree that it pays low wages to its employees. Here's your post for reference:

*************************************

"When employee salaries and wages make up only 1.87 cents per ASM, it is not hard to see why you are making progress against airlines whose employee costs are about 4.2 cents per ASM. Lower wages and benefits are the majority of your cost savings, and to assume otherwise is to ignore reality.

There is no "secret" to the success of the lcc's. It is simple. It is not cheaper airplanes, good customer service, tv's, innovation, etc. All those things certainly help, and I commend you for them. However, LCC's are successful because they are able to offer seats at fares that they can make money on but the competition can't. They can do this PRIMARILY because their employee wages and benefits are far lower. If you disagree with me, I challenge you to provide a more significant cost savings. I invite you to visit each airline's investor relations page for the SEC reports. A breakdown of costs can be found there.

I commend jetblue on their success, and I wish their employees the best. You do a fine job. However, you cannot pretend that you are not putting downward pressure on the compensation packages for this profession. It is not something to gloat about, and I hope that my airline does everything we can to curb your growth.

**********************************

Your post about low wages is one that is brought up frequently by the casual observer, but is essentially incorrect.

First of all, it has been refuted many times that jetBlue pays at, or above, industry wages for an airline that's only been in business for three years. Now every pilot coming on board at jetBlue knows what they're buying into. We've been told by many inside the company that we can expect pay and benefits to mirror what is found at SWA under a mature pay and benefits scenario.

Is it industry leading? No, but for the business model that jetBlue pursues, it is properly established, and anything but "low."

This is an important point. For you to say that jetBlue brings down industry wages is invalid. You can't compare wages that Delta pilots earn to wages earned by jetBlue pilots. The reason is simple,while both airlines operate under a 121 certificate, they are vastly different in how they serve their markets, evidenced by their vastly different business plans. One (Delta) bases its business plan on its ability to generate high revenues, while the other (jetBlue) bases its plan on maintaining low costs primarily through efficiency and high utilization of high cost assets.

For you to compare wages at Delta and jetBlue on a one for one (hourly) basis is to compare apples and oranges. This rationale would also apply to regional pilot wages as well. Of course no one expects them to paid major airline wages.

While we may fly similar airplanes from the same airports, we operate on entirely different tracks, driven by different operating priorities established by our respective business models.

What you fail to understand about jetBlue's ability to make money is that it is driven by outstanding efficiency. This is evidenced by its perrenially high gross margins. For 2002 it was 16.5%. When you look at jetBlue's fleet a couple of things standout in stark contrast to the rest of industry.

First, jetBlue flies its airplanes almost 13 hours per day (12.9). Second, jetBlue earned over $635 million dollars in revenue for 2002 with an average fleet size of 30 airplanes. That comes out to a revenue per aircraft basis of $21.2 million dollars. When you compare this to the industry gold standard, SWA, jetBlue maintains a sizeable advantage over SWA in these two categories (>than %21). Add to this greater average seat # size, and speed over the B737NG and that racks up some serious ASM generating capacity for a relatively small fleet of aircraft.

So what's my point?

At $45-50 million per airplane, the highest cost to an airline are its airplanes, not its employees. Once again, when compared to SWA, jetBlue is able to generate comparable ASMs with 25% fewer aircraft. Not only does that mean fewer airplanes, but less fuel, less employees, less maintenance, less overhead, etc., etc., etc.

Now that's what jetBlue's advantage is over SWA. Now, just imagine what it is over a hub-and-spoke carrier like Delta.

So Delta now wants to field its own low cost alternative in Song. This creates a problem for Delta management based on my earlier statement above. If they want to play in this new arena, they must change their basis from revenue generation, to low cost, high efficiency.

What side of the fence will DALPA fall on?

They will not be able to have their cake and eat it too over the long-term if Delta management pursues a larger role for Song vs. its mainline operations. Today's annoucement by jetBlue will only put further pressure on this situation.

Industry wage deterioration is not the fault of jetBlue, but your own airline's (read: management) decisions to alter its traditional business model and undercut the contractual commitments made to you during a period where the airline operated solely under a revenue generation scheme. The implementation of Song now puts that into serious question.

Is it right or wrong? I don't know the answer, but I can tell you its far more complicated than you suggest, and certainly not the fault of people flying jetBlue A320s around this country.

 

[FlyDeltasJets]

Re: WARNING: Long Post

**********************************

Your post about low wages is one that is brought up frequently by the casual observer, but is off the mark.

First of all, it has been refuted many times that jetBlue pays at, or above, industry wages for an airline that's only been in business for three years. Now every pilot coming on board at jetBlue knows what they're buying into. We've been told by many inside the company that we can expect pay and benefits to mirror what is found at SWA under a mature pay and benefits scenario.

With all due respect, who cares how long you have been in business. Your employee wages and benefits are lower, and they ARE having an effect on the profession. The evidence of this is everywhere, but mostly in company negotiations.



Is it industry leading? No, but for the business model that jetBlue pursues, it is properly established, and anything but "low."

This is an important point. For you to say that jetBlue brings down industry wages is invalid. You can't compare wages that Delta pilots earn to wages earned by jetBlue pilots. The reason is simple,while both airlines operate under a 121 certificate, they are vastly different in how they serve their markets,evidenced by their vastly different business plans. One (Delta) bases its business plan its ability to generate high revenues, while the other (jetBlue) bases its plan on maintaining low costs primarily through efficiency and high utilization of high cost assets.


That is patently untrue. They do not achieve low costs "primarily" through efficiency. They get their low costs partly through efficiency, but "primarily" through labor costs. Look it up.


For you to compare wages at Delta and jetBlue on a one for one basis is to compare apples and oranges. This rationale would also apply to regional pilot wages as well. Of course no one expects them to paid major airline wages.

While we may fly the similar airplanes from the same airports, we operate on entirely different tracks, driven by different operating priorities established by our respective business models.

I think that you are overestimating the differences between the two airlines. We both fly people from the same airports to the same airports on the same size airplanes.



What you fail to understand about jetBlue's ability to make money is that it is driven by outstanding efficiency. This is evidenced by its perrenially high gross margins. For 2002 it was 16.5%. When you look at jetBlue's fleet a couple of things standout in stark contrast to the rest of industry.

First, jetBlue flies its airplanes almost 13 hours per day (12.9). Second, jetBlue earned over $635 million dollars in revenue for 2002 with an average fleet size of 30 airplanes. That comes out to revenue per aircraft basis $21.2 million dollars. When you compare this to the industry gold standard, SWA, jetBlue maintains a sizeable advantage over them in these two categories (>than %25). Add to this greater average seat size, and speed over the B737NG) and that racks up some serious ASM generating capacity for a relatively small fleet size.




You are very efficient. I commend you for it and have never denied it. However, our revenue per employee is higher, our revenue per airplan is similar. You do not corner the market on efficiency. More importantly, any advantage you may have in this criteria is not nearly large enought to explain the difference in CASM. You have almost a 3 cent advantage here. That is huge, yet many seem to want to understate it.



At $45-50 million per airplane, the highest capital cost to an airline are its airplanes, not its employees. Once again, when compared to SWA, jetBlue is able to generate comparable ASMs with 25% fewer aircraft. Not only does that mean fewer airplanes, but less fuel, less employees, less maintenance, less overhead, etc., etc., etc.

Now that's what jetBlue's advantage is over SWA. Just imagine what it is over a hub and spoke carrier like Delta.


While airplanes may take the greatest initial capital outlay, employee wages are still more expensive. For comparison purposes, in the third quarter, your costs for aircraft rent was .45 cents per ASM (half what you paid for fuel, an airlines second largest expense). Your cost for depreciation and amortization was .31 cents per ASM. Compare that to 1.87 for employee wages and benefits and you will find that you are greatly mistaken when you say that airplanes make up the greatest cost. I am not trying to be rude, but please read your 10k. I think that it will better explain what I am trying to say.



Now Delta wants to field its own low cost alternative in Song. This creates a problem for Delta management based on my earlier statement above. If Delta wants to play in this new arena, it must change its basis from revenue generation, to cost efficiency.

Delta has always competed on a cost basis, as opposed to U, UAL and AMR. DAL, CAL, and NWA always were cost conscious, which explains why they are hurting less than the others. Song will be an extension of that philosophy, not a departure from it. Delta was the most cost conscious in the industry even before Neeleman was born. You are incorrect when you assert that they concentrate more on revenue generation.


What side of the fence will DALPA fall on? They will not be able to have their cake and eat it too. Industry wage deterioration is not the fault of jetBlue, but your own airline's (read: management) decisions to alter their business models and undercut the contractual commitments made to you during a period where the airline operated under a revenue generation scheme. The implementation of Song now puts that in question.

Once again, your portrayal of Delta's business model is incorrect. Just because someone undercut our costs does not mean that we are not cost conscious. My take is that SONG will be a success. Time will tell.


Is it right or wrong? I don't know the answer, but I can tell you its far more complicated than you suggest, and certainly not the fault of people flying jetBlue A320s around this country.

I never said that it was their fault. But to pretend that the lower costs of JBLU do not come largely from employee costs is incorrect, and to claim that those costs do not put downward pressure on other pilot contracts is naive.

 

[SpeedBird]

FDJ:

Well I tried to answer your original post with the facts and numbers, as you demanded. If you want to ignore them and tell me that I don't know what I'm talking about that is your privilege.

However, if you think that Delta operates its hub and spoke business model based on a low cost basis, then you have a serious lack of knowledge about the airline industry and how your company operates.

I've read the jetBlue 10Ks many many times and feel very confident saying that know them far better than you. Since I don't expect you to know this I won't hold a grudge, but I own degree in accounting and also a MBA, so please don't attempt to "educate" me on how to read financial statements.
Sheeesh, I've probably forgotten more about them than you'll ever care to know.

So, since you seem to have a good handle on how things really are, and since I'm rather tired of trying to make reasoned response with you, I'll just leave you to your own and agree to disagree with you on this issue.

Have a good day.

 

[rapidD]

Guys,

This is a great discussion on the current state of OUR industry.

Sorry to say, but it's a marked departure from what I read most often on these posts. I, too, salute JB and SWA and Air Tran, etc. For anyone pushing the throttles up for a US carrier to think that they are treading new ground is, in my experienced mind, naive. We are all related in some form or fashion. I happen to be with one of the "dinosaurs" who is attempting to change their strategic vision. I see the need for change also...more than most of you can imagine. Again, though, if you are a card carrying member of our elite group of pilots you must understand that what success or failures we individually experience, apart form management snafus, we share the joint future. Whether you at JB understand this or not, you are indeed the recipients of "your brothers" previous success and failures. Some day, you'll want more. It will come in the form of comparisons to others, just ask the long-term SWA guys. You won't be happy. Then, you'll turn to the advantages of others and claim that you're doing the same job. You know what? You are. Just ask the boys and girls at Eagle, Comair, ASA, etc. That's when you'll understand that you are a member of a larger community. Don't let short-term success or job security blind you. Whatever success or failure any company has DIRECTLY affects us all. The evidence is there. Everyone fly safe and keep your eye on the ball.

rapidD

 

[canyonblue]

Originally posted by FlyDeltasJets However, you cannot pretend that you are not putting downward pressure on the compensation packages for this profession. It is not something to gloat about, and I hope that my airline does everything we can to curb your growth.

It is the job of your Negotiating Commitee to deal with the company when determining wages relevent to your peer group. The low cost airlines do NOT fly the same aircraft to some of the same places that most "network" carriers do.(ie:International) For ALPA or any other union to go into negotiations with the company using SWA, jetBlue, Airtran, or ATA as a "peer group" is a problem that your membership should address to your MEC. As a former Negotiation Commitee member at an ALPA carrier I remember the company trying to lump us in with "different" model carriers. We would throw up the BS flag and put a halt to that crap, perhaps so should alot of other Majors. If pilot pay is being dictated by LCC's, you're airline is in alot more trouble than you think.

 

[AlbieF15]

Let me tell you about 3 pilots know....2 at DAL and 1 at JetBlue.

DAL pilot # 1 is a good bro from F15 days and still flies in the ANG. Hired fall of 99'. Now on bubble for furlough. Made GREAT money for a while as a 757 FO. Displaced now to MD 88 FO, on reserve, hoping to last 8-12 months more prior to the F-word.

DAL pilot # 2 was hired in Jul 01....last class prior to hiring freeze. (any other Delta wannabes like me remember Plato's "60 a month forever" predictions?) Never made it to the line before furlough. Likewise...troughing in the ANG (thank God for those jobs!)

Third pilot was Eagleflip. I use him as an example since we were to be classmates at JB in Jan 02. If he's not a Capt now he's close.

Now...my question. Guess which one of these guys made the most money last year? DAL pilot 2 beat Eagleflip, but with min line guarantees going down during furloughs the advantage wasnt' a big as you might think. Next year...different story! I'd venture to say with profit sharing a young JB captain will make 135-160k...perhaps as early as year 2.

Remember furlough math, too. Great contract, plus no job, equals ZERO income. Pretty good contract, plus work, equals pretty good income.

There is more to being happy at work than money, but since that is the unit of measure in this thread I'll just stick to the finances.

My point to this is two-fold. First...everyone acts like working for JB or SWA is selling your soul. Dudes...I am making 61 bucks an hour on the panel at the premier freight company right now, so I will be making HALF of what I could have made this year at JetBlue. I sit sideways flying rubber dogcrap in the middle of the night listening to the Captain drone on about how hard it is to get a good contractor to put the finishing touches on his $750,000 waterfront dream house. Does that mean I'm doing the brotherhood of airline pilots a disservice by hanging out making less money on the panel? Long term, perhaps it will even out once I upgrade--but if you read the FedEx threads you will see that things are looking a bit stagnate over at the mighty purple. (sidebar...I DON'T want to the guy who stays 5-6 years on the panel in the last 10% of the seniority list the whole time...but it could happen!) Guys who work at JB are making more money than anyone on furlough right now, and I'd venture to say a 2-3 year guy at JB is making more than a 2-3 year guy at about about any major right now due to wage givebacks (United), less hours of flying, and the rapid upgrade from the right seat. So...explain to me again how these JB guys are sticking it to us--especially to those of us in ALPA?

Second--some of you may remember the late Sam Kinison's line on the famine in Eithiopa..."maybe what you people need to do is MOVE TO WHERE THE FOOD IS!" Right now, the "food" is at SWA and JetBlue, and to a lesser extent Frontier and AirTran. Those companies are making money right now in tough times by catering to the public that demands lower fares in order to be cajoled back into flying. Guys are going to work there because...well...they are hiring! You can scream about "selling out" your flying brethren all you want, but this ALPA member will remind you that unless someone is willing to pay to stuff your plane with either people or cargo, the best contract in the industry in meaningless without the fresh flow of capital into your company's coffers.

Go read the ASA guy's post again about trying to fly home to get a feel for what the general public, not us airline pilots, feels when trying to travel. I can go online, get a fare for less than 300 bucks about anywhere on SWA, Air Tran, or JetBlue. For example...I had a one way FedEx RSW-MEM trip pop up in open time, and decided to price tickets to TPA. One day prior, I could get an AirTran flight from TLH for less than $150 bucks. US Air, however, wanted $550 for the trip from my local base. Those low fares invite travel and encourage people to purchase--and in fact build a market. The higher fares encourage you to do what I did--rent a car, suck it up, and drive on down. (Yes...I could have jumpseated but I HAD to be in RSW in time for trip check in. Getting bumped wasn't an option...)

Anyway...I will gladly trade my 61 bucks an hour, my B fund, and benefits for the period 1/2003-12/2003 with any 2 year JetBlue captain that wants to trade the sum of our paychecks in December. What? No takers? I thought you guys were underpaid and were screwing us over? I'm not here to poor mouth FDX...its a great job, and I know that my 61 bucks an hour on year 2 pay isn't bad compared to what many people, other airline pilots included, are making. However...if you are telling a guy who made captain in 2 years, makes six figures, and is sitting on $150,000-$300,000 in stock options he's screwing you over and taking food out of your mouth....well...I just don't see it that way.

 

[rapidD]

Canyonblue

No, what I'm saying is YOUR pay is being dictacted by the failure of the majors. My airline is fine. Your are the one suffering the loss.

 

[FlyDeltasJets]

I've read the jetBlue 10Ks many many times and feel very confident saying that know them far better than you. Since I don't expect you to know this I won't hold a grudge, but I own degree in accounting and also a MBA, so please don't attempt to "educate" me on how to read financial statements.
Sheeesh, I've probably forgotten more about them than you'll ever care to know.

Then why did you say that airplanes were the airline's biggest expense? Perhaps you should brush off the books.

I don't mean to be rude, and I didn't mean to be rude earlier, either. I didn't try to "educate" you on anything, all I did was suggest you reread the 10k, because your opinions seemed to be in conflict with what was printed there. I have tried to remain civil, I am sorry if you were unable to do so.

P.S.
Congrats on the resume. I would caution you, however, not to make assumptions about other people's knowledge or education.

 

[FlyDeltasJets]

Albie,

You are comparing captain pay to F/E pay. Tying compensation to advancement is a slippery slope. We shouldn't have accepted it when mgt promised growth in return for a B scale, and we shouldn't accept it now. It is a invalid comparison, just as comparing your MD-11 captain pay to the A320 captain pay would be invalid. You need to compare apples to apples, and when you do so, the shine comes off a little.

Also, I would caution you about advocating letting "market forces" alone dictate our contracts. None of us would like the probable outcome.

P.S.
Sam Kinison RULED. I saw him live once and he was insane. Although I don't agree with your point, anyone who can use Kinison in an airline economic discussion is OK in my book!

 

[FlyDeltasJets]

It is the job of your Negotiating Commitee to deal with the company when determining wages relevent to your peer group. The low cost airlines do NOT fly the same aircraft to some of the same places that most "network" carriers do.(ie:International) For ALPA or any other union to go into negotiations with the company using SWA, jetBlue, Airtran, or ATA as a "peer group" is a problem that your membership should address to your MEC. As a former Negotiation Commitee member at an ALPA carrier I remember the company trying to lump us in with "different" model carriers. We would throw up the BS flag and put a halt to that crap, perhaps so should alot of other Majors. If pilot pay is being dictated by LCC's, you're airline is in alot more trouble than you think.

Canyon,

You are correct, and our negotiating committee has attempted to do the same. We have been successful in the past, and are still working to hold on to what we have. The current environment, including forces I previously discussed, are making it very difficult. I know you wish us luck (seriously).

 

[AlbieF15]

FDJ,

When I compare airlines to other airlines, I don't compare apples to oranges. As a 37 year old guy when I started, I study potential career earnings. (Or...pineapples to cantelopes)

For instance....American had a good contract when I was applying...but (waaay pre 9/11) being 13,000 on their list was NEVER going to get me a 777 Captain job for a significant (or maybe any) period of time due to my age. So....its true the Delta MD11 wage or the UAL 777 Captain absolutely blows away a SWA 737 or JB A320 captains hourly wage.

I would also argue that the point is entirely moot. What matters is the company's growth rate, fleet expansion, profitablity, and the "model" career you can expect based on those factors. If you can't fly the 777 as a Captain...who cares what the pay rate is? What can YOU hold and expect to fly in your career?

Another horrific point. All our ALPA created retirement systems....pensions, ESOPS, B-plans, etc can be CRUSHED by bankruptcy and other economic factors...including management fraud.

Back to my point. If I were 35-45, looking for a profitable, lucrative career....I'd look at SWA, AirTran, and JB. If Delta called me up today and said "we know you always loved us...we are here for you...and the DAY the last furloughee is back you are FIRST guy in class" I'd still likely be hurting--not because Delta's contract isn't great but because in 3-5-7 years I'd still be behind a huge bowwave of recallees. Those high numbers for 777 look great....but what if "I can' t get there from here?"

So...take a look at CAREER earnings for a JB, SWA, or AirTran type guy. While my Delta bros are out making ZERO on f-word, my new A320 JB captains are making 135-150k per year. It will take a LOT of extra hours at the higher Delta rates to make up for the lost time on f-word. Additionally, for some of us not starting in our careers, the time to earn is 14-22 years...not the 25-30 career some other spring chickens may have. So...don't look at a paychart--look at what you expect to make each year then add the totals. Don't forget the time value of money, either. I'd gladly take 140k today over 200k 10 years from now.

One more rebuttal...our retirement systems. I LOVE my FDX A and B plan...I mean LOVE them. However...company has to be there to pay them. Not sticking a poker in anyone's eye...but look at the US Air mess and the ESOP debacle at United. Once you go into Cht 11/Chpt 7...your pensions can be decimated. The options and 401ks at the LCCs aren't as good on paper as the majors plans...but unfortunately they ALL have market risks. If you suffer on furlough for 5 years so you'll have an industry leading retirement plan when you are 60...well...you may just have a terrrible surprise waiting down the road. I love my A plan...but I'm saving and investing like it won't be there...hoping that when it is its just a very nice bonus.

As for comedy....back in 88-89 my UPT roommate had an HBO Dangerfield special with Kinnison, Andrew Dice Clay, Rita Rudner, Louie Anderson, and a couple others...absolutely the funniest show I ever saw. Almost everyone on that tape went on to have great solo careers as headliners.

And thanks for keeping it professional....trust me when I say I have no axe to grind...and I want to make as much money as possible in this line of work without overly mangling our golden goose. I had dinner last week with a FedEx poolie, a SWA poolie, a United furloughee and a Delta pilot with some very sore fingernails from hanging on to the cliff. I would like to see ALL of us working healthy, happy, and prosperous very soon....

 

[General Lee]

Jeff G, Blue Bayou, and Speedbird,

I have to admit that I was surprised reading the headline that Jetblue was starting LGB--ATL. That was smart on your CEO's part. Good move. But, in reality, there is one major blocking point to Jetblue ever getting "big" in ATL----the lack of gate space. Even Airtran is hampered by lack of gates--they are stuck in the southern half of the C concourse, and some of their RJ's are over at the end of the D concourse. Besides two or three other gates per airline, Delta operates all other gates. So, I think Delta has its grip on ATL---which is good for us. I think this is all a response to us putting 36 757's on your routes---and I also think there may be a market for you in ATL. Maybe this will help Delta see that they have to compete all over---not just the NE to Florida. I am sure that we will have more than 36 757's on Song, I have heard closer to 60 (out of 120 total 757's). But, overall this was a good move on your part and I think Leo Mullin will be looking at this one closely.

Bye Bye---General Lee

 

[Kid Charlemagne]

Why? Would you like me to permanently loose my job? How would this help you? Like I have said before, it's getting harder and harder to root for you guys.

Ranger,

I don't want to see anyone lose their job. But what about my job? What do you think the whole point of Song is if not to put me out of my job? I'm not too worried, as I know that will not happen - our leadership team at JBLU is too smart and savvy to let it. But just knowing that's the whole purpose of Song's existence ticks me off. Look back at the posts over the last couple months. See for yourself all your compatriots from DAL salivating over the prospect of "hurting JetBlue". That's OK huh? But when I say something similar now, that's not cool? Reminds me of the old saying about those who wanna dish it out....

To be honest, I always looked up to DAL in the past...thought they were one of the best airlines. But not anymore. It's not just because Song will "compete" with JBLU on NE - FLorida routes. It's because they are an exact replica, a clone, a carbon copy of JBLU. It's like if you were back in school and spent a whole semester working on a research paper...put your heart and soul into it. And some idiot in class who wasn't smart enough to write his own paper just copies yours, word for word, and THEN GOES AROUND BRAGGING ABOUT HOW MUCH SMARTER HE IS THAN YOU!!! How would you feel about that???????

BTW, to those who keep reminding us blue suiters that "two years ago you all wanted interviews with DAL, AMR, UAL, U, etc"- WRONG!!!!! I made up my mind I wanted to work for JBLU as soon as I heard about them in detail (early 2000) and I applied to them immediately. Yes, this was well over 1 1/2 years before 9-11 and all the majors were hiring. And no, I didn't even APPLY to any of the majors because I knew JBLU was the kind of company I wanted to spend the rest of my career at. So this nonsense about us JBLU'ers all wanted to go to United or Delta once upon a time will hopefully be put to rest....cause it just ain't so!

Finally, about our pay being so low. I can assure you the average captain here does just fine. Would I like to see a raise? You bet! And I feel confident that will happen at some point if we continue to be profitable....and sooner rather than later. But you must remember we are a 3 year old airline. How many years (decades) did it take to get DAL payscales were they are today? So lets be fair and compare apples to apples. And yes, I would like to see more low fares out of ATL - it would benefit the flying public greatly. That's the whole point of our profession ...providing a service to satisy our customers ....remember? "It's the customer, stupid"

 

[SpeedBird]

2002:

Labor costs:

$77 million in wages, salaries, and benefits (includes profit sharing)

Aircraft Costs:

$8 million in leased aircraft rents
$38 million for jet Fuel
$17 million landing fees
$4 million routine maintenance
$78 million on current liabilities on long-term debt for new aircraft

Total aircraft costs for 2002:$145 million


As a final note, from 2001 thru 2007 jetBlue is going to spend over $2.3 billion (excluding interest) on 60 new A320 aircraft. This is what the long-term debt is for. In 2002, jetBlue financed $416 million in long-term debt for new aircraft purchases.

Based on just 2002 costs, jetBlue could have given all employees a 75% increase in wages, and it would still be 25% less than the current year cost of aircraft ownership. Of course, if jetBlue had done so it would have resulted in a break-even year for net income. I appreciate your sarcastic advice about brushing up those books, but it wasn't necessary. I thought it would have been apparent to you as well, but that's what I get for assuming that other professional airline pilots out there can pull out rudimentary financial statement information when needed.

BTW, when you quoted jetBlue's aircraft rent costs as a ratio of their CASM, you failed to understand that this cost only covers the lease costs, and nothing else. As you should know, this is barely scratching the surface of the the total cost of aircraft ownership by an airline, as I've outlined above.

I obviously offended you and apologize for doing so, since this is not my desire. I guess I'm somewhat frustrated by the lack of business knowledge so many pilots have. Yet the stone doesn't get advanced any further when supposedly objective discussions take place.

I'll admit I see some things with "colored" lenses, but I feel that I have a very good understanding of the basic drivers in this business. While you and others may feel adamant about what's right for the "profession" and quickly remind everyone of ALPA's talking points, and about maintaining industry-leading wages, and the critical value of RLA collective bargaining standards, it neglects one simple fact. You work as an employee of a business that isn't a public utility or government bureaucracy. It must sustain itself financially and make money to keep you employed. If they can't do that, then you'll be out of a job.

Based on what I've observed in this business over the last 23 years, I'm willing to trade off some of that gold for more stability, peace of mind, and long-term growth for the engine that feeds my company's financial future. Despite what you think, our two companies are not the same, and will therefore never be compared in the way you'd like it to be.

I have as much right to feel that way, as you do about your position. You have no moral superiority over me in this way. I've been accused of being a jetBlue kool-aid drinker, but its no worse than being an ALPA kool-aid drinker. I really hope you get back to work soon, but don't blame me, or the jetBlues of the world, for your current personal financial recession.

This profession has demonstrated time and time again how quickly it will turn on itself, eat its young, and create a caste system, all for the convenience of those have the advantage to do so. Please don't feed me that worn out old line that "we're all in this together" for the good of the fraternity of professional pilots. I stopped believing in the tooth fairy a very long time ago.

 

[dgs]

Competition

Competition is a wonderful thing. It is one of the things that has made America great and strong. While people are defending their airlines and others are flaming the competition, just remember that as long as it is good natured, it is perfectly natural.

Does anybody on this board cheer for their favorite sports team and belittle the competition? Is it all gentlemanly and professional? Rarely. There are stong emotions on both sides of these issues as everybody is rooting for their favorite team. Delta threw down the gauntlet with Song and JB responded to the challenge. I say "cheers" for both sides. Competition will make everybody sharper. Imagine how out of shape football players would be if all they had to do is walk out onto the field, pick up the ball, and walk it to the endzone for a touchdown. Why work out? Why polish your game? Why develop a play book? Who would want to watch that? The stands would be empty! If everybody is focused on providing the customer a better product, then more people will participate.

I think this will be win-win in the long run, but there will be some growing pains along the way. Providing a great product to our customers will lure them back in the air.

In the mean time, let's all have a little fun. It's not a matter of bragging, gloating, or tearing down the other guy's team. It's all part of the process. It's one of the things we do best as Americans. Let's embrace it, keep it all in perspective, and have fun without taking everything so personally.

BTW, I applied at jetBlue and SWA. I had no desire to work for any other major because I wanted to be excited about having fun every time I went to work--not just when the paycheck came in the mail. I think jetBlue is more like the airline you read about in Nuts than SWA is today. It was the perfect match for me and I'm thrilled to be here. GO TEAM!!

 

[NYRANGERS]

Ranger,

I
To be honest, I always looked up to DAL in the past...thought they were one of the best airlines. But not anymore. It's not just because Song will "compete" with JBLU on NE - FLorida routes. It's because they are an exact replica, a clone, a carbon copy of JBLU. It's like if you were back in school and spent a whole semester working on a research paper...put your heart and soul into it. And some idiot in class who wasn't smart enough to write his own paper just copies yours, word for word, and THEN GOES AROUND BRAGGING ABOUT HOW MUCH SMARTER HE IS THAN YOU!!! How would you feel about that???????

Are you serious?! This is getting regodamdiculous, your airline did not part the red sea. However I will tell Leo that he will get detention for "copying" JB. Aside from the TV,( of which many of our a/c had personal units well before your existance), I really don't see the similarity. I think Song will offer a far supperior product, but time will tell.

Anyway, I can see you are proud of your airline and thats great, but some of you are getting a little silly.

NYR

No longer rooting for you guys.(I am sure you are crushed)

DGS, I had a blast every time I went to work. Delta provided me with a job at age 27. I enjoyed every day, heck I still can't believe I was hired by Delta (my first choice). Even though I am furloughed, I am confident Delta will be around for quite a while, with or without JB (I really don't care). I am looking forward to a great career when I get back. If I can survive till 60 I will retire number 22. (Not bad for someone who had the misfortune of always wanting to fly for a major global airline.)

 

[General Lee]

Kid Charlemange,

I think it is great that you think your company is the Sh!T. Good for you. You said you "used to " look up to Delta. Well, you still will---the lime green 757's are higher up (in height) than your A320's. A lot of people think Delta may be over it's head when it comes to the LCC model. We started with Delta Express, that did pretty well but had the wrong aircraft. So, Delta learned from that experience and is trying something new---somewhat copied from your success. You have to remember that this whole Song thing wasn't conceived in the back of some warehouse---it was thought out by people probably smarter than you and me---by those high priced McKinsey guys, Leo, and Fred Reid (an Ex Lufthansa Chief). We've put good people in charge and have the cash to follow it through. You and I can ponder what comes next with Song, but I beleive that we have some pretty smart PROVEN people behind us, and that is what we can count on. But hey, we'll have to see what happens. Just watch out for those lime green 757's-----with the possibility of having 60 of them flying coast to coast within the next two years, Song could be bigger than Jetblue, with a better entertainment system to boot.

DGS,

I personally have a lot of fun flying to Europe most every week, with some South America flying to keep it interesting every once and a while. All of the flight attendants (mostly senior hags) are all friendly and seem to enjoy the job. The passengers seem fine with everything and smile as the deplane. Having fun is really what you make of it. I am sure flying for Jetblue and Southwest can both be fun and tiring---not always one or the other.

Bye Bye---General Lee

 

[FlyDeltasJets]

Speedbird,


Your labor costs for 2002 were not 77 million as you claim, but $162,191,000.

Actually, all of the numbers you quoted were incorrect. You quoted the year over year increase from 2001 to 2002, not the total costs. Perhaps you don't know your 10k "far better" than I do. Perhaps you haven't "forgotten more about financial statements than I'll ever know."

I thought that the above numbers would be obvious, but, like you said: "that's what I get for assuming that other professional airline pilots out there can pull out rudimentary financial statement information when needed. "


Now that that's out of the way, let's address your point:

You brought fuel, interest, maintainance, landing fees, etc into the discussion. I am not sure why you did, but it is not accurate. If you wanted to add all the costs of owning and operating airplanes, why stop there? Crew costs would have to be factored in, as airplanes cannot fly without a crew. Taxes would have to be added, as the gvt would take your airplanes if you didn't pay taxes. The list is endless.

Break your costs down. (costs...not liabilities...I'm sure that you know, there is a difference). Of all of those costs, employee wages and benefits are by far the largest. The chart below, taken from your third quarter 10k illustrates that.




Operating expenses: (per available seat mile)
Salaries, wages and benefits 1.87
Aircraft fuel .95
Aircraft rent .45
Sales and marketing .53
Landing fees and other rents .53
Depreciation and amortization .31
Maintenance materials and repairs .12
Other operating expenses 1.65


Even your most recent full year 10k agrees with me. The following quotes are taken from it:

"Fuel costs are our second-largest operating expense"

"Fuel costs constitute a significant portion of our total operating expenses (14.4% for the year ended December 31, 2002)."

" Our business is labor intensive, with labor costs representing 30.6% of our operating expenses for the year ended December 31, 2002. "

If fuel is the second largest expense at 14.4%, and labor costs were 30.6%, what do you think was the largest expense? I'm not the financial wiz that you claim to be, but I think it's labor.

I guess we'll have to agree to disagree. No hard feelings.

 

[Jeff G]

But, in reality, there is one major blocking point to Jetblue ever getting "big" in ATL----the lack of gate space.

I don't think there's an intention of ever getting "big" in ATL. A few flights to LGB, a few to JFK, and maybe a few to FLL are all I'd ever expect to see. Two permanent gates should do it, and it doesn't even matter where they are, as long as they're contiguous. Probably all this new service warrants is one shared gate, likely with an associated agreement to provide handling "below the wing".

I think this is just a way to capitalize on a high-fare monopoly market, nothing more. With only 23 (maybe 22) available slots, you have to make them count, preferably with long-haul (read: low CASM), relatively high-yield service. ATL is perfect. The fact that it's Delta's monopoly route is either coincidence, or a minor "bonus" at best. Maybe it is a warning shot across the bow, I don't know, but it's first and foremost a great market. Remember, this is business, not a pissing contest.

 

[dgs]

Jeff G -- I think the PC term is "urinary olympiad."

G Lee -- I'm glad you're rooting for your team and that you are happy when you're on the field playing. I've done a bit of international flying in my day and I'll admit the layovers are great. Crossing the pond, however, is just an endurance test to stay awake and keep entertained. Of course, so are our transcons--albeit with a few more radio calls. I have LOTS of friends and classmates who fly for Delta and I don't hear much complaining from them like I hear from some of my buddies flying for other majors. At the end of the day, I wanted to work somewhere where the pilots and management understood each other and had a great working relationship. Someplace where there was an energy from new and exciting things happening all the time. I got that and I'm happy. (I also thank God every day for this opportunity.) I'm not trying to take away from what you have. It's just not what I wanted. It's not an attack against you or Delta, but a rebuttal to those who think the only reason we went with JB was because the majors weren't hiring. That may be true for some people, but it certainly wasn't in my case. Heck, there are a lot of guys at JB now, who would never have left major airline X (the last job they ever expected to have) if they hadn't been furloughed.

 

[Full of LUV]

DGS,

"BTW, I applied at jetBlue and SWA. I had no desire to work for any other major because I wanted to be excited about having fun every time I went to work--not just when the paycheck came in the mail. I think jetBlue is more like the airline you read about in Nuts than SWA is today. It was the perfect match for me and I'm thrilled to be here. GO TEAM!!"

What ansinine comment. Do you actually believe that only SWA and J B pilots enjoy going to work. If so, what an absolutely pathetic profession! Everything is what you make of it. Some people will sit on a bed of roses and still look for the thorns. You can hand some people a **CENSORED****CENSORED****CENSORED****CENSORED** sandwich and they will ask for more. I think you made your mind up before you applied that you would enjoy only those companies, so it apparently is a self-fulfilling profecy.

By the way, I see a major difference between SWA and JB, SWA has mostly avoided a major fight with the majors where JB is planning to go in swinging. There is a marked difference in the growth plans, we'll see how it works out.

 

[dgs]

Do you actually believe that only SWA and J B pilots enjoy going to work.

I think you made your mind up before you applied that you would enjoy only those companies, so it apparently is a self-fulfilling profecy

People -- Let's not get wrapped around the axle here! If you are having fun and enjoy your job, good on ya! However, I know a lot of pilots (and there are plenty of posts on this board to back me up) that just think of this as a job and don't care about anything but the money and the time off. That's not what I wanted--it's as simple as that.

Actually I made up my mind after the interviews. I was very impressed at the jetBlue interview with everybody I met. I got a lot of cold vibes when I interviewed at SWA on 10 Sep 01. The SWA pilots we met during our tour couldn't stop talking about the issues they had with the company and how the meeting with the union on Friday, 14 Sep 01 was supposed to address their multitude of concerns. 24 hours later the world was changed forever.

Bottom line: I'm not trying to take anything away from what anybody else has. jetBlue was simply a better match for ME. I love it here, period. Oh yeah, "GO TEAM."

 

[firstthird]

I also interviewed 10Sep01 and remember the comments by the pilots but came away with a different feeling. One of my concerns about SWA had been that the pilot union might be a little too close to management to really look out for the pilots, but the guys in that Captain upgrade class seemed to be realistic that they wanted more pay but not a Delta + 1 or something that was unrealistic considering all SWA flies is 737s. At that time (day before 9/11) there was talk the company was going to up salaries and benefits before the new contract even was negotiated because the SWA contract had gotten so far behind the times due to its unusual length (10 years, 94-04). After 9/11, of course that didn't happen but they did just get a decent raise and better benefits a little while ago. Considering almost every other airline is in the giveback mode, I'm pretty impressed that SWA has negotiated new contracts with all of it's labor groups in little over a year, raises for all and they are still making money, especially since they are the mostly unionized of any airline.

I also applied all around but the cards had me going to SWA. I wish nothing but the best of luck for DAL and JBLU guys. Every airline has its own strengths and weaknesses, and unfortunately most of us don't get multiple offers so it isn't like we get to choose one that matches our risk personaility exactly. The best airline is the one that hires you, or so I've been told by guys with more experience than my 0 hours of 121 time.

And for anyone that hasn't read it, Hard Landing by Thomas Petzinger is a great introduction to the airline industry and how vicious it can be on the company to company level. It talks about about the giants of the past who many of us might not even remember.

 

[FlyDeltasJets]

Please read the following story. Concentrate on the jetblue vs. Delta section.

http://www.thestreet.com/_yahoo/funds/jubak/10069427.html

I think that it illustrates what I have been trying to say. Is it anyone's fault? No. But it is reality, despite the protestations of many here.

We will have to compete. And we will. As they say, this isn't our first rodeo.

 

[canyonblue]

Canyon,

You are correct, and our negotiating committee has attempted to do the same. We have been successful in the past, and are still working to hold on to what we have. The current environment, including forces I previously discussed, are making it very difficult. I know you wish us luck (seriously).

And I do wish you luck, also seriously. My best friend is furloughed from Delta and that may be why I get wrapped around the axel on these issues. I'm glad you guys have not gave in to Leo and his yes men as LCC and Global Airlines are apples and oranges. They are paid GOOD money to run Delta and current problems are theirs to deal with. Any venture that returns pilots to flying I'm 100% in favor of. Any venture that jeopardizes jobs I'm 100% against. If SONG helps Delta thats great and I will believe Leo made a great move. If this hurts at all I hope you guys toss him out of ATL on the next AirTran or jetBlue flight. Talking about being competitive I am VERY competitive. I played football in college and played on a twice a week hockey league until a few years ago (I'm 42). But as far as good competition and bad, my anology would go to the Warren Sapp-Green Bay incident. (if you don't know what I'm talking about you're spending too much time in front of a computer)I'm highly competitive but I wouldn't gloat on ending somebodys career. Bottom line on Sapp, I wouldn't of made the hit competition or not.

 

[FlyDeltasJets]

I don't know, I think I might have hit Mike Sherman, too!

 

[General Lee]

Mo Betta Blue,

I also agree that certain pilots like certain types of flying. Some people like the 6 leg days, others like the long haul pond crossers. I am happy that I personally have the choice of all of those at Delta. I am sure that your flying at Jetblue is interesting and fun---which is good. Southwest now has a mix of long haul---BWI-SAN, SJC, OAK, LAX, PHX etc--and the 7 leg cross country hops. Variety is a good thing---and if our airlines have it---that is good.

Jeff G,

I also believe that jetblue will not be "big" in ATL, but the competition will make Delta wake up alittle and face the facts. If you have never been to ATL before----the airport is well run by ATC, even though the "short approaches" are atleast a 10 mile final. Even though the city of ATL is known to be a "hospitality" city with lots of conventions---the people at the concession stands (food outlets) are among the rudest, and slowest people on earth. I hope you enjoy it---and I hope you get to see how big Delta really is there. It really is amazing.

Bye Bye---General Lee

 

[NYRANGERS]

I don't think there's an intention of ever getting "big" in ATL. A few flights to LGB, a few to JFK, and maybe a few to FLL are all I'd ever expect to see. Two permanent gates should do it, and it doesn't even matter where they are, as long as they're contiguous. Probably all this new service warrants is one shared gate, likely with an associated agreement to provide handling "below the wing".

I think this is just a way to capitalize on a high-fare monopoly market, nothing more. With only 23 (maybe 22) available slots, you have to make them count, preferably with long-haul (read: low CASM), relatively high-yield service. ATL is perfect. The fact that it's Delta's monopoly route is either coincidence, or a minor "bonus" at best. Maybe it is a warning shot across the bow, I don't know, but it's first and foremost a great market. Remember, this is business, not a pissing contest.

Hey, we can always use more Delta "feed". Unless your pax are terminating, maybe they will connect to a Delta flight. If that is the case then thanks JB.