Kelly: SWA costs too high

[maru657]

In any event, I suspect this will bode ill for those on the bottom of the seniority list. It explains the rigid attitude of SWAPA to the seniority arguments and the Bond-McKaskill decision.

 

[CF34-3B1]

Let's not forget the married retirement plan F/A's, the commited partner health insurance and the cartels/computerized insta-bid tournament players flying 85hrs but getting paid 200+ TFP every month.

 

[johnsonrod]

I hope the WOMEN flight attendants are forced to wear tighter, smaller shorts in the summer! I am referring to legacy SWA FAs, not AT FAs.

 

[jonjuan]

A lot of speculation here. SWA has always been an employee focused airline and it makes sense to me that if they needed an increase in the bottom line wouldn't GK do something like charge for bags before asking for money from the employees?

That's just my thinking, am I on the right or wrong track?

Wrong-you start charging for bags and many pax will flee back to the other airlines. Gary spoke of the hard data last year: swa gained more pax and thus more revenue because they don't charge for bags. Unless of course he was not telling the truth.

 

[jonjuan]

General, let me expose the fallacy of your post in regards to productivity.

Using your theory, it takes the Delta crew 15-hours on the 777 to transport 268 passengers. Over that same 15-hours (@ 1-hour per leg) the Southwest crew can potentially transport 2250 passengers...or 1,982 more passengers in the same 15-hour flight block as the Delta crew can. So, how can it be possible when you say that the Delta crew is just a productive as the Southwest crew because they each flew 15-hours?

Except that much of that long haul flying is during hours many hours of the day in which swa aircraft are parked. Oops.

 

[Hose A. Jiminez]

The "B" scale that us Airtran guys will be under was extremely foolish for SWAPA to support. It will be used against the SW pilots. It is ashame that SWAPA allowed that carrot for management. I posted this on here a year ago, and it will happen as I predicted. My concern fell on deaf ears on the SW side. We shall see.

SWAPA supported equal pay for both fleets and captain seats for all AAI captains. That is a fact. Let the water go under the bridge bro.

 

[Hose A. Jiminez]

This is probably the first time that a company has put out gloom and doom communication to employees just prior to contract talks.

 

[GogglesPisano]

haha. funniest thing I ever heard. By that logic the employees are responsible for the state of the airlines since not enough revenue is being generated by them which then is leading to bankruptcies. Which by the way also negates your second point - that consumers are willing to pay.

Glad you have a sense of humor. The "state of the airlines" is directly attributable to management and indirectly attributable to the state of the economy, the price of fuel and to an even lesser extent (post 9/11) the cost of labor.

As to my second point, consumers are paying more now than they have in a very, long time -- which bodes well for all stakeholders in the industry.

 

[HA25]

With AA BK, SWA now has the highest cost per employee. Low turnover the last 10 years has increased per employee cost.

and therefore you're saying they need to lower their costs with a cheaper labor contract.... RATHER than the others raise theirs with a better one, right?

 

[fam62c]

Instead of doing stock buybacks SW could use it's cash to approach the AMR creditors and try to tempt them with a strong offer for a bunch of -800 leases, 737 delivery positions, east coast slots/gates and whatever other parts that they could use. Maybe it's a longshot but SW could help to make AMR less of a competitor by trying to force a partial liquidation/downsizing of AMR by making an offer to the BK court for pieces or possibly even buy the whole operation while it's still in BK and break it up, keep what they want and liquidate/reject/reorganize/spin-off the rest. The creditors just want their money and AMR is going to try to give them as little of it as possible. AMR can offer equity to secured creditors but SW can offer cash, cash is better. This is ATA only bigger, SW should introduce a competing plan to the creditors in court and throw a wrench into this thing. Back AMR management into a corner to prevent them from getting too good a deal and becoming a thorn in the side of SW.

If SW is worried about a rejuvinated AMR with lower costs why not try to prevent if from happening in the first place? SW should be on Boeing's case as well (and enlist their help) as it appears they are ready, willing and able to come to the aid of AMR at the expense of SW. SW should twist Boeing's arm as hard as they can to get some sway with them and make them less generous to AMR, AMR's 737's and delivery slots could solve a big fleet rejuvination issue for SW.

There's a potential "grand bargain" here to be made and if SW doesn't jump in as a spoiler it's probably going to be between AMR and LCC which will give SW another huge competitor with low costs. SW may be able to force a breakup of AMR and get some valuable parts instead of letting LCC get it all. If nothing else they can try to jack up the price that LCC will have to pay.

You can either complain about the competition or you can do somehting about it. SW has the cash to do something about it. SW should never have allowed LCC to survive when they were down, let's see what they do with AMR. SW has the chance to jump in the ring and greatly complicate the situation at AMR's expense, that's what competitors are supposed to do; create chaos for the competition. This is a dirty industry, you have to get down in the dirt and fight dirty to win.

I don't have any ill-will towards American employees but in this industry it's kill or be killed, there is no middle ground. It's like the TWA situation except this time AMR is TWA.