Reality Check for NetJets Pilots

[njwingman]

As to United, you were both right. It was profitable before the contract,, however, there business was in a period of steep decline as high yield business traffic was departing in droves over the slow down and poor service.

And I guess that "high yield business traffic" that departed would now be what is known as the fractional business?

I believe UA's labor costs after the contract were somewhere in the area of 49% of total operating expenses. After concessions, their labor costs are now in the area of 42%, JetBlue's labor costs as a percentage of total operating expenses are 29%. SWA's labor costs are now in the area of 41% for 2004, up from 35% in 2000, so it will be interesting to see if SW continues to prosper. If it does, I guess that will lend some credence to the argument that management has the monkey on their back as to the success of the company and shouldn't always go looking to labor to fix their problems.

 

[stlflyguy]

I believe UA's labor costs after the contract were somewhere in the area of 49% of total operating expenses. After concessions, their labor costs are now in the area of 42%, JetBlue's labor costs as a percentage of total operating expenses are 29%. SWA's labor costs are now in the area of 41% for 2004, up from 35% in 2000, so it will be interesting to see if SW continues to prosper. If it does, I guess that will lend some credence to the argument that management has the monkey on their back as to the success of the company and shouldn't always go looking to labor to fix their problems.

JetBlue's costs are simply due to the fact that nobody has topped out on the labor scale and that they are still growing. As the senior most employees incur raises due to longevity, the airline offsets that with newhire employees at the bottom of the payscale.

Southwest has been a classic model of this. If SWA ever stagnates, I would expect the employee costs to rise exponentially. But SWA never has, from what I can see, stagnated in the past and they certainly don't make any overtures of doing it in the future. I think the Boyd group pointed out that SWA may be picking up more aircraft; perhaps used 737s from other carriers or a desert here or there.

 

[rajflyboy]

Netjetwife...

Your husband did what most people don't do. He gave for his country. He risked life in a dangerous job "Flying an F16". Thats very honorable.