Pilots at Airtran pick up open time???

[gt1900]

OK Secret..... Tell AAI when to hedge then... When do they pull the trigger and buy hedges??? Do they buy them now at $100 a barrel?? Or do they wait until it hits $50 a barrel?? Is it going to hit $50 a barrel, or go back up to $140??

Read this link... You will learn something.. Maybe you forget that there was a price collapse of oil in 1986. Just 7 years after oil had hit an all time record of almost $70 a barrel, it then dropped to below $15 a barrel. Lets say SWA would have bought oil at $35 a barrel to fend off another price increase.. Once oil dropped to $15 a barrel SWA would have been losing tons of money since the current oil prices would have been only $15 a barrel.. You seem to think that hedging is so simple... Well in isn't. I can show you tons of articles where hedging has hurt DAL, CAL, AAI etc.. SWA has been very LUCKY to get the hedges they have.. But, if oil starts a landslide and hits $35 or $40 a barrel again then they are going to be in trouble. Its not nearly as easy as you seem to think it is. Nobody expected the recent rise in oil prices.. At least not to the extent that they occured. Ya, some analysts predicted $200 a barrel, but I just don't see that happening.. Heck, $147 a barrel has almost bankrupted Ford and GM.. Look at how badly its hurt them. Economys would collapse at $200 a barrel. Heck, ours started to collapse at $147 a barrel.... You can expect oil prices to continue falling now in order for the oil company's to get us all hooked on oil again.. When gas drops to $1.50 a barrel we will all be buying Humers again and gas guzzling SUV's... Trust me, the oil company's want you hooked on oil. And thats why the oil prices will continue to drop... Its just a matter of how far...

http://www.wtrg.com/prices.htm

Ty... I agree.. But what do they care?? They will get their money.. Look at Hoksema.. How much money did he make from inflating the price of MEH and causing a bidding war.. IMO it was brilliant. Sucks for the employees, but for the stockholders it was genious.. He has his money, so what does he care what happens to MEH after that.... The difference is that AAI mgmt needs to get AAI stock up. So they need to do things efficiently in order for that to happen.. I don't agree with it at all, but I understand it. I don't like thier tactics, but I also understand the hard handed tactics are the only way they can get what they need. I don't take it to heart, and I don't let it get to me.. Its just business, and we are just pawns...

 

[PCL_128]

The whole conversation is moot anyway, because we don't have the cash to purchase hedges on a large scale. It ain't cheap. SWA has billions in cash reserves. Makes it a different game for them.

 

[Secret Squirrel]

The whole conversation is moot anyway, because we don't have the cash to purchase hedges on a large scale. It ain't cheap. SWA has billions in cash reserves. Makes it a different game for them.

There are many different ways to hedge fuel. SWA has been doing it for some 15 years or so. Before they had Billions in the bank. I would argue that is why they have billions in the bank.

 

[Secret Squirrel]

OK Secret..... Tell AAI when to hedge then... When do they pull the trigger and buy hedges??? Do they buy them now at $100 a barrel?? Or do they wait until it hits $50 a barrel?? Is it going to hit $50 a barrel, or go back up to $140??

Read this link... You will learn something.. Maybe you forget that there was a price collapse of oil in 1986. Just 7 years after oil had hit an all time record of almost $70 a barrel, it then dropped to below $15 a barrel. Lets say SWA would have bought oil at $35 a barrel to fend off another price increase.. Once oil dropped to $15 a barrel SWA would have been losing tons of money since the current oil prices would have been only $15 a barrel.. You seem to think that hedging is so simple... Well in isn't. I can show you tons of articles where hedging has hurt DAL, CAL, AAI etc.. SWA has been very LUCKY to get the hedges they have.. But, if oil starts a landslide and hits $35 or $40 a barrel again then they are going to be in trouble. Its not nearly as easy as you seem to think it is. Nobody expected the recent rise in oil prices.. At least not to the extent that they occured. Ya, some analysts predicted $200 a barrel, but I just don't see that happening.. Heck, $147 a barrel has almost bankrupted Ford and GM.. Look at how badly its hurt them. Economys would collapse at $200 a barrel. Heck, ours started to collapse at $147 a barrel.... You can expect oil prices to continue falling now in order for the oil company's to get us all hooked on oil again.. When gas drops to $1.50 a barrel we will all be buying Humers again and gas guzzling SUV's... Trust me, the oil company's want you hooked on oil. And thats why the oil prices will continue to drop... Its just a matter of how far...
http://www.wtrg.com/prices.htm

They buy hedges always, it is a part of any good proactive company to try to stabilize the costs of their raw materials for a certain length of time so they know how to price their product. MANY companies do it with everything from food products to precious metals, to Crude oil.

Did you read the link? If I was management of a company I sure would want to stabilize my costs with such a unstable commodity. And do YOU actually know what fuel hedging is? There are at least 4 ways that companies can hedge fuel costs. And the way Southwest does it (for like 15 years or so) they can make money on the upswings and the down swings. And I am not arguing that you can lose money hedging fuel, we are going to have a neat little charge this quarter for loss on hedging fuel. Just another example of bad management decisions.

Is our management Proactive or reactive, taking responsibility for their actions or constantly blaming others for their poor decisions, uniting or dividing its employee groups? These, along with many other reasons, are why I believe your earlier statement that AAI management has made good decisions is incorrect. My opinion and you are free to have yours.

 

[gt1900]

If SWA is ALWAYS buying fuel hedges how come they haven't bought any in almost 2 years??? Like I said before.. If you know so much about hedging, why don't you tell everyone how and at what price to hedge fuel at??? Its easy to point blame.. Im asking you to make " a good business decision".. At what point should AAI buy hedges.. Any kind of hedges... If your going to bash AAI managment about hedges you better be able to back yourself up, and tell them how to do a better job. Otherwise you do your job and let them do thiers. Stop armchair quarterbacking them...
Like I said.. Tell everyone here at FI what price oil is going to drop to and when airlines should hedge.. If its that simple, you should be able to do it very easily... BTW.. Read the below article, especially the last couple paragraphs... Even GK has said that the hedges have only bought SWA time. If they don't find additional revenue they will be in the same predicument everyone else is in...

http://www.msnbc.msn.com/id/25419436/

 

[Secret Squirrel]

If SWA is ALWAYS buying fuel hedges how come they haven't bought any in almost 2 years??? Like I said before.. If you know so much about hedging, why don't you tell everyone how and at what price to hedge fuel at??? Its easy to point blame.. Im asking you to make " a good business decision".. At what point should AAI buy hedges.. Any kind of hedges... If your going to bash AAI managment about hedges you better be able to back yourself up, and tell them how to do a better job. Otherwise you do your job and let them do thiers. Stop armchair quarterbacking them...
Like I said.. Tell everyone here at FI what price oil is going to drop to and when airlines should hedge.. If its that simple, you should be able to do it very easily... BTW.. Read the below article, especially the last couple paragraphs... Even GK has said that the hedges have only bought SWA time. If they don't find additional revenue they will be in the same predicument everyone else is in...

http://www.msnbc.msn.com/id/25419436/

Your own article says they have not bought any in several months, not years. SWA fuel heading has brought them almost 4 billion dollars in the last 5 years. IT IS NOT MY JOB TO FUEL HEDGE. IT IS MANAGEMENTS JOB, NOT PILOTS. A GOOD MANAGEMENT DECISION IS TO HEDGE THEIR FUEL. And you have brought up another problem where our GOOD management has not done a good job. Where is the additional revenue? They did not even raise ticket prices from last year to this by INFLATION!! Every other airline has brought up their per ticket revenue but US.
So how about YOU start telling me the GOOD decisions managment has made? Sounds like the only thing they have been doing is trying to take money FROM THEIR EMPLOYEES!!!!!!!!!!!!!!!!!!!!

 

[BSkin]

I personally was in favor of the reduced line values to keep everyone on the property (and even started the thread on the NPA forum after I heard how Jetblue was handling their block hour reduction from a Jetblue jumpseater).

However, don't blame Mike Best. If it would have went to a vote, I am sure at least 50% of the pilot group would not have said yes to a 25% reduction in average line credit. Too many guys living paycheck to paycheck or not worried about the junior guys. Mike was just going with what he thought the majority wanted.

I only blame MB if what you previously said is true! IF IT WOULD'VE GONE TO VOTE? Give me a break. The majority of our pilots were hired in the last 4 1/2 years, I know because I'm right at the middle. Lots of the younger guys with more seniority would probably have liked the chance to vote on that. That's the main thing that's f-d up with the NPA -- deciding what is best for the group without confiding/puting out to vote what is best in the group! Tell me why all these board members quit? There needs to be a spine in the NPA and it doesn't seem to be present!

 

[BSkin]

And, I also was in favor of reduced LVI, as long as it was in writing from the mgmt that it was only temporary!

 

[BSkin]

Also, Maxblast, you're essentially implying that Mike personally put our pilots on the street without a vote. That should go over well!

 

[eyeamthechosen1]

There could be one guy on the senority list and as long as it's him he will continue to have that attitude. This is the type of guy when the company bends him over he asks for vaseline.

 

[tubelcane]

To the guy wanting to know when to hedge,

When I came to this company 3 years ago there was a major screw up on the hedging in ATL. Management has said they can make money with oil somewhere in the 90 - 100 range. If it's in that range and trending up would'nt you hedge your bet around there and know you could make money? These guys are not good at this, they need to hire someone who is. I would rather see them do it now and know they can make money, even if its only 50% heged at 100 or so, that's better than nothing. If oil goes up after the election is over and they didn't, it's gonna be tough to blame anyone but the "best management team in the industry."

 

[FlyFastLiveSlow]

GT, it's not always what you do. it's also how you do it, and when you do it, and what you say to employees.

This is where this management team falls down every time. At some point, if you kick a dog enough times, he's going to bite . . . . Copy?

Took the words right outta my mouth.

 

[gt1900]

SS... Now your just being dumb.. Have you seen the ticket prices?? Have you seen the news articles?? Ticket prices have come up a ton.. Just look at the prices from the east coast to the west coast. AAI has raised ticket prices a lot.. Do they still offer ticket sales?? Yep.. But last year you could buy a ticket from SEA to ATL for $99.. This year that same ticket has been around $180 during the cheap fare sales.... BTW... Nice cop out on telling managment its thier job to hedge fuel... However, you still never answered my question.. At what price do they hedge.. You seem to be so smart except when it comes to actually throwing out a number... Ok Ill do it.. If oil get into the $70 a barrel range AAI should hedge.. But not until then.. AAI can make money at 100-110 a barrel suposidly.. So now would be a bad time to buy fuel hedges......... BTW... Nice try on the article about SWA not hedging in a few months... That article doesn't show a date.. I will try and find the article that does, but I might not be able to... BTW... IF SWA has been heding in the last couple months they are really screwed and not as smart as youd like to think..... The SWA ride will end and they will eventurally be in the same boat as everyone else.. No airline has ever sat at the top for ever.. SWA will be no exception.. They will make their mistakes and it will be just like pre 9/11 when guys were bailing from SWA to fly for UAL, DAL, NWA, etc... How quick you forget the past.... Remember when Eastern was the highest paid pilots in the industry????

 

[FlyFastLiveSlow]

Nice cop out on telling managment its thier job to hedge fuel... However, you still never answered my question.. At what price do they hedge.. You seem to be so smart except when it comes to actually throwing out a number...

I had to throw in my two cents here....

Secret Squirrel is not part of the "best mgmt team in the industry", is not collecting millions of dollars in "performance" bonuses, and I'm guessing is not an MBA holding executive at FL. When he joins that club, then it will be his decision.

Until then, those who ARE grossly overcompensated to make good decisions, but don't, should actually make one.

 

[twepilot]

they get what they negotiate for just like us.

RV

 

[PCL_128]

they get what they negotiate for just like us.

RV

The difference is that they're negotiating with their golf buddies who give them whatever they want.

"Hey guys, can I have a 20% raise this year?"
"Yeah, sure Bob. When we hitting the links?"

 

[Secret Squirrel]

SS... Now your just being dumb.. Have you seen the ticket prices?? Have you seen the news articles?? Ticket prices have come up a ton.. Just look at the prices from the east coast to the west coast. AAI has raised ticket prices a lot.. Do they still offer ticket sales?? Yep.. But last year you could buy a ticket from SEA to ATL for $99.. This year that same ticket has been around $180 during the cheap fare sales.... BTW... Nice cop out on telling managment its thier job to hedge fuel... However, you still never answered my question.. At what price do they hedge.. You seem to be so smart except when it comes to actually throwing out a number... Ok Ill do it.. If oil get into the $70 a barrel range AAI should hedge.. But not until then.. AAI can make money at 100-110 a barrel suposidly.. So now would be a bad time to buy fuel hedges......... BTW... Nice try on the article about SWA not hedging in a few months... That article doesn't show a date.. I will try and find the article that does, but I might not be able to... BTW... IF SWA has been heding in the last couple months they are really screwed and not as smart as youd like to think..... The SWA ride will end and they will eventurally be in the same boat as everyone else.. No airline has ever sat at the top for ever.. SWA will be no exception.. They will make their mistakes and it will be just like pre 9/11 when guys were bailing from SWA to fly for UAL, DAL, NWA, etc... How quick you forget the past.... Remember when Eastern was the highest paid pilots in the industry????

You better be careful throwing around terms like Dumb. Your posts reek of it. First The average ticket price for the second quarter 2007 was $93.33. Do you know what the average ticket price was for the same quarter this year? $99.99. Ok, I was wrong. So that is an increase of like 7%. But inflation over the same term was over 5% (and inflation in the airline business more than that). Jet Blue for instance was able to raise their average seat price by 18%. Where are your huge increases in ticket prices. I am getting my information from the 2Q report. Where are you getting your information?

Now lets talk about fuel hedging. The first problem is that jet fuel is not publically traded so companies have to trade oil or heating oil futures. The market fluctuates, and in the case of oil and heating fuel it fluctuates pretty regularly. GOOD management hedges fuel this way. They invest in oil and heating oil futures when it is at the bottom of cycles (buy when low) and they use the profits from the sale of their contracts to supplement the purchase of their fuel (Jet Fuel is not a publicly traded commodity). It takes the uncertainty out of their fuel costs and helps them price their product better. They hire experts to manage these accounts, not ask pilots, and they are very successful. There are other ways also. But my point in all this, and the answer to my question is that GOOD management decisions would have us hedging fuel all along so we would have not been exposed to this spike in fuel prices. Southwest, Alaska, and to a lesser degree JetBlue made good decisions about one of the major costs in their business model and they are benefiting from those gains. But what our management did was reactionary and will cost us more money than if they did nothing at all. As oil prices went up the cost to hedge fuel also went up.

All right I am done. I like a good debate. I think I won, you think you won. But in the end managments decisions have led us to the place we are. Employees have done everything they can to make this place successful. In the end they are being punished for their hard work with threats and heavy handed tactics. I personally think it is disgusting. I guess you think it is the cost of doing business and employees should just take it. We will just have to agree to disagree.

 

[maxblast72]

Having a bunch of pilots sitting around doing nothing cost a lot of money. I laughed when everyone said the LVI would drop to 70hours.. That doesn't help the company at all..

Building 85 hour LVI lines and then having 80 reservists that actually earn 40 hours of credit but get paid for 70 is more expensive than 70 hour LVI and only having the normal 45-55 reserve lines (there would be less soft pay).

Since you want your pilots to fly alot, you reduce the workforce until you have enough pilots to fly 82-85 a month in the heaviest months (May-Aug, Nov, Dec). Then in the slow months (Jan, Feb, Sep, Oct), you reduce LVI to reduce overall pay, not increase the amount of reserves (not actually "earning" their full 70 hours of pay). The soft pay enters the picture when you have too many reserves sitting at home still getting paid 70 hours.

We flew over 50,000 block hours a month this summer. With the aircraft sales we will be completing this fall, I doubt we will flying over 50,000 block hours a month until we get back up over 140 aircraft. Unfortunately until that time, we won't need 1650+ pilots.

 

[gt1900]

Max... I don't believe we have a lot of reserves that are only earning 40hours of credit. Im on reserve and I currently have over 50hours of flying for Sept (btw.. I have only been assigned trips within 24hours of my reserve time). Thats 2 reserve periods and 50+ hours... At this rate I will time out at the end of the month.. I may be the exception, but I think the reserve guys are flying more then you think... Heck, I'm at almost 90hours of pay already (until they urp me)... This reserve thing is great.... just kidding

 

[FlyFastLiveSlow]

Max... I don't believe we have a lot of reserves that are only earning 40hours of credit. Im on reserve and I currently have over 50hours of flying for Sept (btw.. I have only been assigned trips within 24hours of my reserve time). Thats 2 reserve periods and 50+ hours... At this rate I will time out at the end of the month.. I may be the exception, but I think the reserve guys are flying more then you think... Heck, I'm at almost 90hours of pay already (until they urp me)... This reserve thing is great.... just kidding

Must be nice. I'm on reserve. I have 6.5 hours of flying so far, and 61 hours credit.