Let's Start an Airline-Hypothetically

[Astra Guy]

enigma,

You raise some good points. There is no doubt that the "front line" folks are the ones that can make huge differences in success or failure. Concentration of hiring the right type in these positions would surely be a challenge but it is doable. I believe there are enough caring folks out there who would provide the level of service we expect. I agree that the middle mgrs can play a huge part in overall mission completion. Bad apples need to be identified and kept out. If one sneaks through then we would have to deal with that appropriately.

Quality people from top to bottom makes the difference. As for the SWA and AA situation I don't know the difference in work rules but I would suspect that the working environment is much more positive at SWA.

There are so many complex issues in each company that can determine the attitudes of their folks. Management surely has been the weak link in most failing airlines. The same is true in most any industry. It is not pie in the sky type thinking that if the corporate culture is where it should be, then many of the problems can be stopped before they arise. A lack of ethics, morality and effeciency has created this monster. Everyone in the organization should know that whatever they do that their efforts do make a difference. Communication from top to bottom and from bottom to top has to be fluid. No one in the dark means that even if the company falls into lean times that it is a shared experience. No unfair bonuses paid to the top folks when their efforts don't result in profitability.

Thanks for bringing these things up.

 

[Astra Guy]

Markm,

Thanks for your post. We surely would be interested in routes that you have uncovered in your study. Someone with dispatching skills can lend a lot to the overall mix of decisions on the front end. Once we determine the route structure, which really come first, and then the airplane, plus knowing what our associate levels should be helps answer many of the unanswered questions so far.

Don't be a lurker....give us more of your ideas and the stats you have uncovered.

Thanks again.

 

[Publishers]

Enigma

Enigma,

You ought to be running that airline.

Who are the most important people-- if we are trying to grade at all. The ones who deal one on one with the customer and who are often dealing with them when things go bad.

Reservations and customer service positions.

It also is where tremendous cost and productivity issues reside.

One of the things I am always pointing out in these threads on unions and why regionals do not get integrated-- well it is the other 95%. Often companies where the pilots have tough union contracts have unions in other positions. Even when they do not, they tend to have a higher employee cost than ones who do not.

The fact is that the pilots often separate themselves from the rest of the company by attitude and job description. The rest fo th ecompany feels that the pilots are prima donna's and do not relate to them.

Astra

The answer is that you do not tell them a thing in the first question.

The second one depends more on the situation. In a smaller operation, you might have to have the replacement right under the nose of who you are going to terminate.

My wife, one of those retired professional flight attendant used to tell me all the time, you ought fire so and so. Great dear, but who will work his shift today, you.

In our hypothetical airline, we need to understand our first obligation is to the investors, not to the people we hire.

 

[Astra Guy]

Publishers,

I respectfully disagree about question 1. Allow me to give you a little background in my real world situation, which I believe I have shared with enigma. I work for a privately held company. I created the flight department over 13 years ago. This company has been in business since 1956. The founding father passed away. His wife became the Chariman of the Board. His first born son was appointed President. There were six children in all, five of which worked directly for the company until an unfortunate chartered plane crash in Kenya this past summer took the lives of one of the sons, his wife, his eldest child and nine others who were all in-laws.

When we created the flight department the gross sales were !$250M. Today it is ~$1B. Along the way because the company, led by the family continued to acquire other like, but somewhat disimilar companies which allowed them to basically increase their customer base. The family that runs the company could easily walk away after going public for more than $100M each and that is a conservative estimate. They do not. Why? Simply because they are driven to continue to make this company viable, in part due to their dedication and love for the founder. Other motivations are that they want to make this company a meaningful place for their associates. Have their been lean times? Sure. Never to the point of not making a profit, however.

Along the way, since I have been here there have been four reorganizations. It was determined that our corporate overhead was way out of skew. This is due in part to many old timers who continued to get above average increases while their individual productivity and efficiency went down. Some were severed and given generous packages as a result.

How does this relate to question 1? Well the owners of this company made it clear to everyone ahead of time that things had to change and outlined in general terms, the problems. For the most part the ones that were severed understood which was eased by their severance packages.

Blind-siding people who have the impression they are doing an adequate job is not fair. Everyone should be given the opportunity to change their focus and hopefully keep their jobs. The President and his Lieutenants have to make tough decisions which affect everyone who's life will change.

There is no doubt that the owning family wants to make a profit. Included in that profit making is above average scale salaries and benefits, annual and Christmas bonuses, which are above scale, etc, for our associates. Is this extraordinary? Sure! Is it possible to treat people fairly, pay them a decent salary and benefits package and still make a profit? Absolutely! It all depends upon the culture which is driven from the top.

This same family is philanthropic donating their time and money to many needy charities, many times in the background which they gain no publicity from. Are we proud and happy campers in this company? You bet! Many of our associates have "like minds" as you put it.

This company has grown through acquisition, as I mentioned earlier, I believe. Some locations were non-union and some were union. It is about a 50-50 mix. The non-union locations are the most productive from a value added/associate standpoint. They are paid a higher wage than union workers. We have had several locations that have decided upon their own to vote the unions out. I guess the word got around.

So the answer to question two is patterned around how my company would handle such a situation. I realize there are many variables to this so it is difficult to answer without having more data.

Are we fortunate? Of course! Is this the standard? Of course not! But then again who says we need to just rise to the standard?

If the founders of a company have a real purpose besides maximum profits for establishing the company then they might be more motivated to offer some of the things that have been brought up on this thread. I know people are greedy. Some are more greedy than others. Some realize there is something above money that counts...like doing a good job, having peace of mind in their workplace, being a member of a team and if the team wins or loses they have given it their best shot, etc. These are core character issues and the core character in each prospective associate needs to be evaluated.

This is not pie in the sky. It is real world, even if it is rare.

By the way, this company is the technological leader in their industry. After reading back through some of my descriptions, they lead in other ways as well.

After all of the reorganizations why was the flight department spared? It boils down to value added. The relatively small cost to run our operation was outweighed by the time spent relying on airline transportation. We are a time machine...we help save it, for many in our organization.

I know I am very fortunate. I work hard to be worthy of my company's praise and benefits. Can you imagine a better situation? I can't. Does this mean that another endeavor can't be started with the same founding ideas? Absolutely not.

Ok, I am off the box now. I write this only to help people realize that there are several ways to start and run a profitable company. I prefer the method our founders have chosen....and so does everyone else who are associates here.

And no, unfortunately there are no openings in my department. But there might be in the future....when someone retires, dies or we expand our fleet.

 

[RegionalFA]

Non-union can work, but it'd be difficult. JetBlue seems pretty successful. Focus more on jobs done well and QOL. Though, there has to be an official forum for addressing issues as they arise.

Customer service is a big one. You can have a smashing financial setup... but, without customers, your airline will do nothing. Passengers are unlikely to be highly swayed by the "rotating captains" position and more likely will simply be confused. Confusion leads to uncertainty. Uncertainty to lack of Confidence... and so on and so forth.

What are you going to offer the person with the checkbook/credit card to make buying a ticket on your fictional Airline XYZ that is more than the legacy carrier that they have some recognition of (if little faith).

Personally, your details are limited and I certainly wouldn't sign on for something without knowing the details.
There's a lot more to any airline than making the pilots happy.

 

[bobbysamd]

CSAs and service

I, too, agree that customer service and public contact people are extremely important. An airline's commodity may be transportation, but the only thing really being offered is service. We must strive to offer better service than our competition. Once we get in customers (would "clients" be a better term?), we have to provide the best flight experience possible. That begins wtih the people we have on the other end of the reservations phone and behind the counters and podiums. We should choose them carefully for their experience and once we have them, train them on treating our clients as kings and queens.

We had discussed cross-utilizing other personnel, so pilots and other flight operations personnel should be chosen and trained accordingly.

One other aspect about service. I, as an air traveler, am sick of multiple aircraft changes and hubbing. Why can't we not apply the Southwest model and provide point-to-point service, with plane changes being the exception? That would go a long way toward providing service.

 

[Astra Guy]

bobby,

I personally like the point to point system, as well. Once we get more data on building our route structure then we can start working on the trip scenarios. My gut feeling is that we should serve the densely populated areas first. Of course we have to bounce that concept off of the competition and try not to pile on an already saturated market.

As for cross-utilization I think what is important here is to setup a system where each associate works for a short period in other areas of the operation so they can gain understanding of what others are going through daily. This will help develop unity and comraderie amongst our folks. It could greatly reduce the us vs. them mentality that comes with not understanding each other's role.

 

[Publishers]

Astra

I think you missed question one and what it was saying.

The example I am using (comes from a course on HR I took at Ohio State) is that a whole division or company is being shut down and at this point only the board knows that. The employees have not done anything wrong, just that division is not working out and is taking time from our core businesses.

Do we let the employees know we are shutting it down before we actually do?

One of your points relates to another question and one that is very appropo to aviation. That is when there are automatic raises and people can get to where with seniority they are receiving much more compensation than the jog should pay.

As an example, I had a switchboard operator/receptionist. She stayed with the company and was given raises pretty much just cost of living and performance. She stayed at that job for a period of years, had no desire to do anything else. Eventually she was being paid considerable more than I could get the job done for by a competant person.

There are a bunch of these type questions. They are not easy. People who were good employees who could not adjust to the new technology.

How about the person who does their job but somehow is always bothering others on the job site and hurting their productivity. A cultural misfit.

Am I saying that you do not want to treat your employees well, not at all. What I am saying is that it is a matter of understanding your priorities. It is also making tough choices.

One last point. You mention the owning family. The key word there is own. When you own it, you can be as benevolent or as dictoral as you like. The flight department was spared because the owner did not want it killed. Simple concept.

You should not confuse running an employee friendly ship with the issues that I bring up. Let me give you an reverse employee problem. The Limited Stores set up nice stock plans for their employees. The chairman's secretary was one of them. She also bought stock on her own. She became a millionaire and left the company sort of to the dismay of the chairman.

While you would never know it from this web site, there are a bunch of really good bosses out there. As a matter of fact, of the 40 years I have been in businesses, never once in a managment meeting did I hear managers talking about employees the way that I see management talked about on this site.

 

[Astra Guy]

Publishers,

Thanks for clearing up my confusion over what you posted. I agree with you about the mgt. bashing that seems to be prevalent here. Part of our problems as pilots is we have way too much idle time...atleast part of the time. It was the same way in the military flight organizations I was in. Pilots normally have above average aptitude and are easily bored. The boredom sometimes results in creating little things to talk about....this is just one of them.

You know, people are people, regardless of where they are or what position they are in. It is just best to know how to deal with the different types one runs across.

 

[enigma]

Pilots normally have above average aptitude and are easily bored. The boredom sometimes results in creating little things to talk about....this is just one of them.

Am I to believe that you think that Don Carty's golden parachute shenanigans were created by bored pilots? How about Leo Mullens similar malfeasance? I guess Frank Lorenzo didn't really cash in his employee's retirement funds to pay off his junk bonds, we just imagined that as well. Next you're going to try and convince me that the age 60 rule came about because of health related issues.

Astra, for someone who claims to be open minded and "just looking for inf.", you certainly seem prejudiced to me.

maybe more later, maybe not.
enigma