Legacy vs LCC

[hoover]

It suddenly occurred to me that our entire industry has been thrown into complete chaos because of the fear of half a dozen or so LCC's that collectively have less airplanes than any one legacy carrier? Why is that?

 

[kaisersose]

Because it gives management something to blame other than themselves. When it was basically just SWA out there you could not point the finger at labor because they make a descent wage. They are cheap because they do things operationally and fiscally to make it low cost. Basically they have good management practices for what they are trying to accomplish. If a legacy that paid the same wages couldn't compete then really all you could do is look at management and say they failed. There was such a difference in the product that legacy airlines really didn't compete with SWA as much as they co-existed. SWA, AA, and CAL all made money in the Dallas, Houston and Chicago markets doing their own thing. The real battle is and will continue to be with the new lcc's offering more service and amenities than SWA and some legacies merely because they are new. Even though virtually every expense is cheaper early on for the start up, the legacy mgt. is so quick to point out how little these pilots make. If we can't compete with the start up they will first blame labor instead of the bad leases they signed in the 90's, the hedges they sold for a loss, and the hedges they failed to make subsequently. Nonetheless, they are getting the pay cuts from us and thus we tend to resent the existence of these lower payscales to which we are compared.

 

[hoover]

Maybe it is "just desserts". At one point the legacy carriers crushed any start-up that dared to tread on their turf. Now the 800 lb gorilla legacys are running scared from the little guys. What goes around comes around.

 

[captjim]

Maybe it is "just desserts". At one point the legacy carriers crushed any start-up that dared to tread on their turf. Now the 800 lb gorilla legacys are running scared from the little guys. What goes around comes around.

Things can go right back around to the way it was if legacy management's remember why they are in business. They are not LCC's, when they remember this they will start making money again.

 

[AA717driver]

The cost difference isn't in pilot pay. The hourly pay for JB, AT and the legacies are either the same of more for the LCC.

The difference is in infrastructure. None of the LCC's have multiple overhaul bases or multiple res centers. They don't have bloated middle management ranks, either.TC

 

[Draginass]

They also don't sink money into flying low frequency into small cities. I'd love the legacies to stop flying to Raccoonville TN and then watch the uproar from "business" when they have to drive 3-5 hours to an airport with air service. I'd also love to see the regional airlines have to survive on their own without the deep pockets of daddy mainline and the fee for departure schemes that guarantees them a profit no matter how many pax on board. Let John Q Public see what the "real" cost of flying out of their podunk airports is, then.

 

[kaisersose]

The cost difference isn't in pilot pay. The hourly pay for JB, AT and the legacies are either the same of more for the LCC.

Not quite true yet but who knows what the future holds. The B6 pay scale for the 320 compared to CAL 737-800 (about the same size I think) tops out about $24/hr less for CA's and $35/hr less for FO's.

KS

 

[AA717driver]

Not quite true yet but who knows what the future holds. The B6 pay scale for the 320 compared to CAL 737-800 (about the same size I think) tops out about $24/hr less for CA's and $35/hr less for FO's.

KS

Ok, EXCEPT the ONE legacy that HASN'T taken pay cuts. TC

P.S.--But I'd like to see the disparity between CAL CA's and JB CA's come W-2 time...

 

[Caveman]

Not quite true yet but who knows what the future holds. The B6 pay scale for the 320 compared to CAL 737-800 (about the same size I think) tops out about $24/hr less for CA's and $35/hr less for FO's.

KS

Not to split hairs, but a more equitable comparison would be the 737-700/500/300 scale at CAL. The 800/900's have about 30 more seats than the A-320. The straight hourly rate for the 737-700 at CAL is more, but at B6 everything over 70 hours is 150%. Based on an 80 hour line the 12 year CAL CA will get $11520 @ month and his peer at B6 will get $11815 @ month. That's pretty much a wash.

 

[kaisersose]

Not to split hairs, but a more equitable comparison would be the 737-700/500/300 scale at CAL. The 800/900's have about 30 more seats than the A-320. The straight hourly rate for the 737-700 at CAL is more, but at B6 everything over 70 hours is 150%. Based on an 80 hour line the 12 year CAL CA will get $11520 @ month and his peer at B6 will get $11815 @ month. That's pretty much a wash.

I am not trying to split hair either. I don't think we make enough. I don't think B6 makes enough. The 150% is a form of soft time and we all have that in some form. A fo that has a blend of 100/hr can make about 120g's at CAL. My point is not that I can make more than you so there. It is that now the legacies have come down much closer to B6 and either have their pensions frozen or gone just like B6's pension. It is not that the lcc's and their pay and benefits are the sole cause but they are certainly a benchmark that mgt. will go to. When they cut your pay, and you are a human, you tend to resent the reasons stated. Could mgt. ever have said that "we need to be more like them" if there had never been a "them" or "them" made the same money?

 

[kaisersose]

Ok, EXCEPT the ONE legacy that HASN'T taken pay cuts. TC

P.S.--But I'd like to see the disparity between CAL CA's and JB CA's come W-2 time...

We have taken cuts. Not as deep as some but too deep nonetheless. You can't take the rate of pay and figure what the W2 will be at CAL. It is too variable. For some you can take the rate of pay and multiply by 1000 and others you could add $50,000 to that and still be low. Just like the 150% at B6 there are ways to make more.

 

[Caveman]

Deleted

 

[cipolini]

The cost difference isn't in pilot pay. The hourly pay for JB, AT and the legacies are either the same of more for the LCC.

The difference is in infrastructure. None of the LCC's have multiple overhaul bases or multiple res centers. They don't have bloated middle management ranks, either.TC

Actually SWA has 6 res centers and 4 MX bases.

 

[Skyboss]

It suddenly occurred to me that our entire industry has been thrown into complete chaos because of the fear of half a dozen or so LCC's that collectively have less airplanes than any one legacy carrier? Why is that?

Because those planes have been placed on major trunk routes sucking the ever living life out of them and putting upward pressure on yields from smaller markets to improve the financial picture. You need small markets to make large markets sustainable with the pressure from LCC's. You jack up fares in small markets (which network carriers have had to do to offset losses on the trunk routes), people start driving, you then lose demand and spiral into a pit.

 

[FR8mastr]

Maybe it is "just desserts". At one point the legacy carriers crushed any start-up that dared to tread on their turf. Now the 800 lb gorilla legacys are running scared from the little guys. What goes around comes around.

They would do this by offering $49 fares out of the city in which the new carrier operated, this got the politicians in an uproar so they decided that doing so was not competetive and banned predatory pricing. Jump ahead 5 years and the wonder airlines do the exact same thing, and everyone thinks its great.

So the Majors cant compete against an airline with a fraction of the infrastructure of themselves so they need to consolodate. But no, they are not allowed to do this until very recently and it is very limited (so far).

True competition would demand no regulation and allow the carriers to do whatever they deem fit to survive. But they are not allowed as the result would be the demise, or at the very least, the pulling back of the wonder airlines.

Deregulate for real or re- regulate the airlines Either way you would find out what comes around

 

[kaisersose]

I often wonder what the difference is between the American and Vanguard anti competitive pricing on the DFW-MCI route of the 90's and and $25 introductory fares today. I guess they feel it's ok for the big guy to suffer but not the little guy.

 

[YourPilotFriend]

One thing is for sure in this business, someone can always do it cheaper. No airline is immune from the slide of this industry, and even the best carriers are soon to feel the hit. I might be wrong, by in my opinion, SWA will be taking pay cuts by 2008. It is inevitable in this industry, thats what this industry is, and anybody who thinks otherwise is fooling themselves.

 

[Take A]

pay comparisons

It isn't fair to compare pay between CAL and JetBlue. It is nice that JB pilots, with their overtime scheme, can bring in some big pay if they want to fly 90 hours a month. Some people would rather fly 40 hours with a 70 hour guarantee each month.

Not everybody wants to fly 90 hours a month

The good thing is that there is something for everyone out there.