National ALPA Skywest=SCABS

[007]

commuter clauses cost the company money!!!!!!???

I don't know about you but since I moved away from base I haven't picked up any stand ups last minute to get double pay. In fact i fly the line I am supposed to fly and don't get anything extra. The only time I used the commuter clause it was for one turn and gave the bored ready reserve something to do. So I don't think it cost the company the TON of money you imply.

AND EVEN IF IT DID, GOD FORBID THE COMPANY DID SOMETHING FOR IT'S EMPLOYEES. Go back to your shiny jet.

 

[Rez O. Lewshun]

As I see it two things are going to have to happen to change the paradigm anytime soon and pilot unions will have little or no part of it. First, view this presentation by MIT on airline profit cycles to verify my points.

http://web.mit.edu/airlines/www/board-meetings/meeting-nov-2004/ProfitCycles-Jiang.pdf

access DENIED!!

First notice the average profit margins over the last twenty years - they average about 5%. This is equivalent to having only $250 dollars left over each month from a $5000 take home pay. When you are in this extreme financial condition ANY loss of business can transform your figures from black to red. Thus the difficulty of the major airlines to raise prices: If one doesn't go along and the others see even 2% of their ridership moving to other airlines, the loss is critical - it probably is equivalent to all of the profit they are making.

Sounds like a problem for gov't and management...

Labor, blithely negotiating ever higher compensation packages - even at modest increases will eat up this narrow profit margin - eventually experiencing the cycles I illustrated all over again. Thus something has to happen to improve pricing leverage on one end and thus profitability, or to change the dynamics of supply and demand in terms of pilots at the other end.

Key word.. negotiating. Why did management agree to higher compensation packages? So the cycles are tied to CBA's? Who runs the company?

Capacity has to be reduced in the system in order to let the market forces of supply and demand allow ticket price increases. That will only occur in the near future when a major airline is liquidated - some analysts are forecasting this very thing as the next down cycle will be very huge as you can see from the MIT presentation. Ironically, it will likely to be labor costs that will put that airline under as I don't see (from the posts on these boards) either ALPA National nor the rank and file pilots understanding market forces well enough to understand whether their labor policies will be sustainable. History suggests that it will repeat itself and the pilots at one carrier will unfortunately gamble and lose. It seems we don't learn from history.

labor costs? That management agreed to? What about managment? Executive compensation? The price of oil? Gov't taxes and fees? Security? terrorism, etc...??

The other end of the equation is the pilot supply side. Already we are seeing some reduction in supply in real terms - one would think that this would drive salaries up and it will likely do so eventually. However, major airlines don't care about the ability of their regional partners to attract quality pilots and therefore will not be willing to pay the fees necessary for the regionals to attract those pilots with increased pay.

Legacy carriers don't care about the quality of regional pilots because they will hire and train thier own....

Thus it is entirely possible that those regionals who agree to compensation increases in order to attract pilots will ultimately lose in the competition for major airline flying as they face either bankruptcy or the dropping of flying due to the requirement to demand higher fees (see Express Jet)- Catch 22.

So the regional that will be worse than Mesa is yet to come?

So the only idea I have at this moment is to assist the company to be more efficient, more cost conscious, and deliver more customer service. This will gain market share at lower cost figures, thus increasing profitability thus making more money available for compensation increases. Profit sharing is a great incentive to do this and allows the company to "increase or shrink" total compensation as market forces dictate.

Not sure how long you've been in the biz, but you are talking about trusting and respecting your management team to make the right choices. It just doesn't happen that way. The legacy carrier have been shown for over 30 years how to run a consistently profitable airline. But for some reason they won't try it out... Why? Cause they can make more money with their exec compensation packages doing it the dirty old stinking screw the employee way..

The real question is: Will labor (ne: individual rank and file pilots) make the effort to understand the market forces in play and understand how their negotiation desires "fit" within those market forces in terms of sustainabilty? Judging from (not the ignorance displayed in these forums but...) the unwilligness of many pilots to educate themselves on these issues and thus reduce their ignorance, I am not optimistic. It is almost if many pilots are frightened that if they educate themselves in these areas, their cherished beliefs, germinated, husbanded, and sustained by their single source of information , will be undermined.

No. the real question is... in order to compete in the New Airline Industry airlines will have to be productive. Labor cost are all down and right sized and aligned. Now it is time to get productive. And as long as management still has this "screw you that's not my job" mentality that breeds to the lowest level in the organizational structure, productivity will be low.

Case in point? 2005 USAIR Holiday bag melt down. Why should some poor schmuck who just got his pay slashed come in during the holidays and bust his tail throwing bags so some senior manager at home with family gets all the reward?

Watch this T-day and Xmas in the NWA system... the FA's are going to jack up Steenland. He won't be able to eat turkey or open presents for five mins without his phone ringing....

Unprofessional you say? Maybe for pilots, but you can only take someone for granted for so long before they stand up for themselves...

Stick that into your MIT airline profit cylce calculater and tell us what you come up with...

Until individual rank and file pilots do so, they will continue to allow themselves to be manipulated by both union and management alike. They will continue to operate and make decisions in ignorance, either losing what they could have won in negotiations or ultimately pricing themselves out of the market.

No, until management starts running airlines instead of data, the front office will always be behind....

You lost creditibility when your post talked only of labor. The issue is multi- faceted...

You are right when it comes to pilots being educated on the issues... Part of an average pilots problem is he thinks everyone is out to screw him.. gov't, unions and company alike.. This is typical of ignorance... Until pilots understand how the system works, can they be effective in thier deisre to negiatiate fair contracts that don't gouge the company.. but like any relationship.. it takes all parties acting in good faith.. Labor doesn't control the gov't or the company....

Your position doesn't work when applied to the SWA model....

 

[Gr82Aviate]

As I see it two things are going to have to happen to change the paradigm anytime soon and pilot unions will have little or no part of it. First, view this presentation by MIT on airline profit cycles to verify my points.

http://web.mit.edu/airlines/www/board-meetings/meeting-nov-2004/ProfitCycles-Jiang.pdf

First notice the average profit margins over the last twenty years - they average about 5%. This is equivalent to having only $250 dollars left over each month from a $5000 take home pay. When you are in this extreme financial condition ANY loss of business can transform your figures from black to red. Thus the difficulty of the major airlines to raise prices: If one doesn't go along and the others see even 2% of their ridership moving to other airlines, the loss is critical - it probably is equivalent to all of the profit they are making.

Labor, blithely negotiating ever higher compensation packages - even at modest increases will eat up this narrow profit margin - eventually experiencing the cycles I illustrated all over again. Thus something has to happen to improve pricing leverage on one end and thus profitability, or to change the dynamics of supply and demand in terms of pilots at the other end.

Capacity has to be reduced in the system in order to let the market forces of supply and demand allow ticket price increases. That will only occur in the near future when a major airline is liquidated - some analysts are forecasting this very thing as the next down cycle will be very huge as you can see from the MIT presentation. Ironically, it will likely to be labor costs that will put that airline under as I don't see (from the posts on these boards) either ALPA National nor the rank and file pilots understanding market forces well enough to understand whether their labor policies will be sustainable. History suggests that it will repeat itself and the pilots at one carrier will unfortunately gamble and lose. It seems we don't learn from history.

The other end of the equation is the pilot supply side. Already we are seeing some reduction in supply in real terms - one would think that this would drive salaries up and it will likely do so eventually. However, major airlines don't care about the ability of their regional partners to attract quality pilots and therefore will not be willing to pay the fees necessary for the regionals to attract those pilots with increased pay.

Thus it is entirely possible that those regionals who agree to compensation increases in order to attract pilots will ultimately lose in the competition for major airline flying as they face either bankruptcy or the dropping of flying due to the requirement to demand higher fees (see Express Jet)- Catch 22.

So the only idea I have at this moment is to assist the company to be more efficient, more cost conscious, and deliver more customer service. This will gain market share at lower cost figures, thus increasing profitability thus making more money available for compensation increases. Profit sharing is a great incentive to do this and allows the company to "increase or shrink" total compensation as market forces dictate.

The real question is: Will labor (ne: individual rank and file pilots) make the effort to understand the market forces in play and understand how their negotiation desires "fit" within those market forces in terms of sustainabilty? Judging from (not the ignorance displayed in these forums but...) the unwilligness of many pilots to educate themselves on these issues and thus reduce their ignorance, I am not optimistic. It is almost if many pilots are frightened that if they educate themselves in these areas, their cherished beliefs, germinated, husbanded, and sustained by their single source of information , will be undermined.

Until individual rank and file pilots do so, they will continue to allow themselves to be manipulated by both union and management alike. They will continue to operate and make decisions in ignorance, either losing what they could have won in negotiations or ultimately pricing themselves out of the market.

Before you lecture others on "getting educated", maybe you should look into edcucating yourself on how the 5% net profit margins of airline compare with those in other industries...you'll notice most are not much higher! And labor costs in the airlines are not the problem either, you might want to compare taxes on the airlines to just about any other industry, and once again you'll see that we are taxed more than the majority of industries in our country!! The taxation costs along with fuel have been steadily increasing and the labor costs as a percentage of operating costs of airlines have been steadily decreasing!!!