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Siegel says-SW to kill USAirways

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storminpilot

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http://biz.yahoo.com/rf/040324/airlines_usairways_2.html

Reuters
UPDATE - US Airways still needs major cost cuts - CEO
Wednesday March 24, 4:41 pm ET

CHICAGO, March 24 (Reuters) - US Airways (NasdaqNM:UAIR - News) Chief Executive David Siegel on Wednesday said the airline still needs to slash costs dramatically to survive, adding that he was willing to make sacrifices as the company seeks a new round of concessions from workers.

Siegel in a company update broadcast to employees over the Internet said US Airways needs to reduce unit costs from 10 cents to 6 cents and have new labor agreements in place by this summer to compete with low-cost carriers that are rapidly gaining market share.

The No. 7 U.S. airline, which emerged from bankruptcy a year ago, still has among the highest unit costs, or costs per available seat mile, in the industry. Low-cost carriers have unit costs in the 6-cent range.

"Southwest is coming to Philadelphia in May ... and they're coming for one reason: they're coming to kill us," Siegel said. "They beat us on the West Coast, and they beat us in Baltimore. If they beat us in Philadelphia, they're going to kill us."

Southwest Airlines (NYSE:LUV - News) is scheduled to start service in May in Philadelphia, where US Airways has one of its three main hubs.

"We're going to lose more money as Southwest comes into Philadelphia, but we're going to have to match up with them. We don't have a choice. We can't give our customers away," he said.

US Airways lost $98 million in the fourth quarter. Its shares closed down 15 cents, or 3.2 percent, at $4.50 on the Nasdaq on Wednesday before Siegel's comments.
 
Wow.... just had a family friend (in Philly) email me about how we (SWA) are putting US Airways out of business. Do they all believe that?

Yep, its all SWA's fault. No other reason.
 
I hate to say it SWA/FO, but I strongly believe you will get a lot of that sentiment. Nothing against SWA, but people in these communities will see Southwest's move into Philadelphia as a strong arm play. The funny thing is they will also love the great low fares that you offer them. I'm fairly new at jetBlue (we all are). I spoke with one of our chief pilots and he mentioned management doesn't want to go into markets right now that will have the company look like it is out to get another airline, e.g. USAir in Charlotte, etc. But from Southwest's perspective, you have to continue to grow and Philadelphia is a perfect market for that growth (high fares etc.) Good luck. Its good to see the growth over there and the increased hiring.




:)
 
The obvious thing here is that USAir can't "out Southwest" SWA, nor should they try to. Focus on being USAirways:

Don't match their prices, offer better service. SWA doesn't fly to many of the places USAirways goes, focus on service, direct flights, FF miles and a good (Assigned) seat at a reasonable fare.

You may cut a bunch of flights that compete directly, but I think that this strategy would be more likely to succeed than trying to slash it to the bone and go head-to-head . . . . but, what do I know? I'm just a yoke and throttle operator from sector 7-G.
 
Ty Webb

Well said, that is a problem with some, or even a majority of the major airlines, they offer lousy service.
 
Have you seen their terminals lately? Seats are torn and the PHL terminal is a mess. I really wonder how much longer USAirways can survive.... With fuel prices still climbing, how much time does it realistically have left? Not much time unless the employees accept MESA-level wages IMMEDIATELY...

If I were a current or ex-USAirways pilot, I'd be looking for JetBlue or Virgin America applications right now...
 
Cpt. Over said:
I'm fairly new at jetBlue (we all are). I spoke with one of our chief pilots and he mentioned management doesn't want to go into markets right now that will have the company look like it is out to get another airline, e.g. USAir in Charlotte, etc.

:)
Click to expand...

I have heard at the monthly chats that while JB management is constantly assessing the situation at USAir "we don't want to be the ones who put the nail in the coffin." Thus JB has not expanded into Charlotte, PIT or PHL. This seems to be strong personal sentiment of Dave Barger. He truely is looking at the human side of things, and does seem to care about crewmembers who don't even work at Jetblue. Will this sentiment last forever? Who knows, but for the timebeing, JB management appears to be waiting to see what happens at USAir, rather than make life even tougher for them.

Skirt
 
I find that hard to believe. This business is all about the all mighty dollar and providing results to share holders. If it means going into a city that will hurt Airways, oh well. Its called "doing business". I dont want to see Airways go under but they do need to get with the program if they want to survive. I think employees at Airways have given enough and its time for mgmt. to give.
 
I'm with a320drivr on this one. This is business pure and simply.

Good ol Herb owes it to his shareholders to find potential new markets, expand, grow and (most of all) profit. Wake up, this is the real world...survival of the fitess and kill or be killed. If Airways can't get it done (which they are not) get someone else in their that can.

I sorry if I am sounding cynical but nobody has done this to Airways but Airways management themselves.
 
Wrong title...

This thread should be titled "US Airways to kill US Airways", and should have been started back in the 90's.
 
getting rid of first class??? didn't they just add that to the shuttle which didn't have it before? they flip flop more then john kerry. Isn't the frequent flying business customer one of usairways most important customers? They have shrunk the first class on the 757's, and i see a lot of people at the gate getting turned away from first class after they ask for it. Then they gotta go sit in the middle. The middle on those things is really no different then southwest. And if you get stuck with the middle on any narrow body....you gotta go with jetblue.
 
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Its like Home Depot, if you offer the best selection and guarantee the best price, come into markets and sell at a loss just to get customers in the door, then you too will put 17 major home improvement chains out of business. Not to mention countless mom and pop stores.

Majors should focus on what they do best (as said earlier). Why doesn't one of them just work on transcon and intercon only and let the low costs have the rest? I know this sounds crazy but how are you really going to compete?
 
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Re: Wrong title...

Maynard said:
This thread should be titled "US Airways to kill US Airways", and should have been started back in the 90's.
Click to expand...

You beat me to it Maynard, Southwest expanded in California in the vacume created by USAir tossing away assets they paid good money for in the PSA purchase. Within a few short years all they had to show for was a handful of high time MD-80’s and a bunch of demoralized employees that got to watch the systematic disassembly of their once great airline!
 
a320drivr said:
I find that hard to believe. This business is all about the all mighty dollar and providing results to share holders. If it means going into a city that will hurt Airways, oh well. Its called "doing business".
Click to expand...

Dave Barger's (President of Jetblue) direct quote to a Jetblue classmate of mine (ex. USAir pilot living in Charlotte), when asked when Jetblue will open up service to Charlotte "we don't want to be the nail in USAir's coffin, we will let someone else do that. We will continue to evaluate the situation. Someday we will be in Charlotte." Shortly after this quote, SWA announced PHL service. Is SWA in PHL the "nail in coffin" that Dave Barger mentioned? Who knows. But I do know Dave has a heart.

Clearly, if CLT, RIC or PIT were the only remaining holes in Jetblue's route system, then you could bet we would be running USAir out of business. However, there are many other routes and cities out there, so pure altruism is not the only reason Dave Barger is holding off. At the moment (or at least as of a month or so ago when Dave was on my classmate's jumpseat), Jetblue is not taking a "kill USAir" approach.

Skirt
 
I think it is in jetBlue's best interest for US Airways to survive-for now that is. We don't have the resources to divert to any of U's hubs if they went down the tubes. I hate to say it but a slow agonzing death of U will benefit JB in the long run. But hey, I'm just a pilot so what do I know.
 
Sip, don't gulp the Blue Aide

Some of you Blue Dudes and Dudettes are really drinking to much of what ever they are feeding you guys over there at JetBlue. I agree with a320drvr, its all about the money. Its retarded to think otherwise. It is easy for the Mgmt. at JB to take the high and mighty, "we have heart, we don't want to put the last nail in the coffin" , road when you only have 55+- airplanes. In reality, if JB had the resources they would be anywhere they thought they could be to get rid of competition and make money. Its called Business. If you Blue God worshippers would take a step back and look at the situation as what it is, "A Business", not some new age esoteric movement, you might not sound so brainwashed and naive.

It all boils down to marketshare and making money!!

JMHO
 
B6Busdriver said:
I think it is in jetBlue's best interest for US Airways to survive-for now that is. We don't have the resources to divert to any of U's hubs if they went down the tubes. I hate to say it but a slow agonzing death of U will benefit JB in the long run. But hey, I'm just a pilot so what do I know.
Click to expand...

This is absolutely correct. If USAir "dies or is killed" today, the wolves will be there in a second. It is much better (sad as it is) if it dies slowly. Like it has been said many times before, it is very much their own fault that the business is going away to others. It is the nature of business, airline or otherwise. If you have a cruddy product, people will buy elsewhere. Once again, sad but true.

And to back up whay Skirt said about our boss not wanting to see USAir go away, she is correct. I have heard him say the same thing to me directly and to a host of others. We are in the middle of setting up in LGA for example. If USAir goes away, it would be a storm in LGA and not good for us at all. Same holds true for CLT and other NC cities. No lies, just plain fact.

C yaaaaa
 
Re: Sip, don't gulp the Blue Aide

amfteamster said:
Some of you Blue Dudes and Dudettes are really drinking to much of what ever they are feeding you guys over there at JetBlue. I agree with a320drvr, its all about the money. Its retarded to think otherwise. It is easy for the Mgmt. at JB to take the high and mighty, "we have heart, we don't want to put the last nail in the coffin" , road when you only have 55+- airplanes. In reality, if JB had the resources they would be anywhere they thought they could be to get rid of competition and make money. Its called Business. If you Blue God worshippers would take a step back and look at the situation as what it is, "A Business", not some new age esoteric movement, you might not sound so brainwashed and naive.

It all boils down to marketshare and making money!!

JMHO
Click to expand...

You are entitled to your opinion but consider this; maybe it is possible to do both, that is, run a successful business and have a heart? I mean that you don't have to "outwardly" appear to be bullish and still be successful. Does JB consider what the others do when making business plan decisions? Absolutely. But I can tell you that our main focus is what happens in our kitchen first, and not our competitors. I know you find it hard to believe as an outsider, but then again, you don't have to.

Take care.
 
First off, I agree with everyone who's said that there are other reasons behind this company or that company moving in or "not" moving into specific markets.

I, too, though, have a problem with people saying that SWA is doing this only to "kill" USAir. It is, truly, all about money. Airways has some huge money making routes (any of their east coast hubs to Providence RI is a good example) -- did SWA convene and say "Okay, guys, how do we kill Airways the fastest?" Personally, I don' t think so. Maybe some SWA guys with the inside track can say differently - if so, I digress. SWA and Airways are truly two different products. I think SWA said "We need to make money - fast. Where can we do that?" As I've written on here before, PHL has one of the HIGHEST yields going to Chicago.

Airways, from my limited experience, doesn't seem like it needs help down the spiral here -- but Ty Webb said it - if they want to beat back SWA, or at least make it interesting for the next year or so, advertise all the things people _hate_ about SWA -- that's what the other low cost carriers seem to be doing.

-brew3
 
Jetblue320,

I think you are missing my point, simply put, JB does not have enough resources to "kill" a competitor, so its easy to put a label on what you are not doing as having heart or not wanting to hurt anyone.

I hate using analogies, but its kind've like a football game in which a win advances you in the playoffs. You realize your opponents secondary is weak. What do you do? You send out your fastest recievers to go deep and get a score. My point is if you don't have any receivers to go deep(resources), you don't have that particular option of scoring. And after the game the coach says the reason he didn't go deep is because he didn't want to hurt the secondaries feelings. Give me a break.
 
amfteamster said:
Jetblue320,

I think you are missing my point, simply put, JB does not have enough resources to "kill" a competitor, so its easy to put a label on what you are not doing as having heart or not wanting to hurt anyone.

I hate using analogies, but its kind've like a football game in which a win advances you in the playoffs. You realize your opponents secondary is weak. What do you do? You send out your fastest recievers to go deep and get a score. My point is if you don't have any receivers to go deep(resources), you don't have that particular option of scoring. And after the game the coach says the reason he didn't go deep is because he didn't want to hurt the secondaries feelings. Give me a break.
Click to expand...

Sure, I understand your point and you are correct. We do not have the resources. My point is (and maybe I wasn't clear enough) is that label or otherwise, it is what we choose to do and although it may be hard for you to understand because you don't work for JB, we are focused on our plan and our plan is not to knock off the other guy, it is to continue to drive our own destiny. If the other guy self destructs or gets "killed", we don't want to lay claim to it. Another example would be LAS. Remember National? Did we start JFK-LAS service to "kill" them? I don't think so. Did it put "a nail in their coffin"? Probably. Did we boast that fact? Heck no. So, I guess it's all a matter of perspective. I was just sharing mine, as were you.

C yaaa
 
Mgmt at JB may indeed have a heart but if they are allowing it to influence decisions on where to offer service you guys had better keep those resumes updated.

In my opinion its all spin doctoring. JB is flexing muscle by inferring that they are strong enough to put Usair down, while hiding behing their "heart" to avoid being called out.

I believe they wish to avoid a sudden fall of USair because of the vacuum this would create (as someone mentioned earlier). This would quite possibly lead to an immediate toe to toe confrontation with SWA. At this stage in the game JB could not Direct TV and blue potato chip and pilot-with-goatee their way out of that.
 
David Seagull said, "SWA is going to kill us".

Not so fast Mr. Seagull.

USAir has been killing themselves for over 10 years. Starting with the fact that they have never defined what they do. Which best describes USAir as a carrier? International, low cost, East coast, domestic, long haul, or short haul? When you are getting beat at every juncture wouldn't it be a good idea to figure out what you do and work to improve that specialty? Or at least modify your business plan to have a specialty?

Secondly, SWA is ONLY going into PHL to make money. If USAir fails its not because SWA showed up on the doorstep unnanounced. SWA announced PHL last fall, plenty of time to get your ducks in a row. Adapt and overcome.

SWA goes into markets where the pricing is ripe for the taking. We did it in TX, CA, AZ, FL, and have historically done it on the E coast. Years ago when we took BWI from USAir that should have given them a clue of things to come. Yet, nothing was done, no battle plan enacted to defend the Hubs.

Poor management over the years is what is going to kill USAir, not SWA.

Note My best friend is a furloughed USAir pilot...he feels the same way as I do on this subject. Also, Mr. Seagull was my former boss.

A more accurate message Mr. Seagull should have conveyed would have been," When SWA comes to PHL, we are going to kill ourselves".
 
Just watched the streamline video link posted by dlredline, thanks.

What a joke, Seagull is a major tool. How far behind the eight ball you have to get before you start doing business better. The most blantently obvious downfall is his own admittal that Airways does not have a good website. Come on now, the internet isn't exactly new. Everyone knows a computer doesn't call in sick and doesn't need any benefits...HELLO...lower operating costs.

It is a little late now to go begging your employees to save the company. The employees have given back soooo much already and management has pissed it all away.

This has nothing to do with JetBlue, SWA or anyone else for that matter. The employees could work for free and mangement still would lose money, fumbling idiots.

Best of luck but it doesn't look good.
 
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PHILADELPHIA, March 25 /PRNewswire-FirstCall/ -- Southwest Airlines (NYSE: LUV - News) today announced a major expansion of its soon-to-begin service to and from Philadelphia International Airport.

Today, during his address before the World Affairs Council of Philadelphia, Southwest Chairman Herb Kelleher made the exciting news announcement that 14 more daily nonstop departures will be added to Southwest's schedule, effective July 6. This will bring to 28 the number of daily nonstop departures Southwest will operate from Philadelphia by mid- summer.

"The response to Southwest's initial announcement of flights has been overwhelming," Kelleher said. "Philly Customers said, 'We Want More,' and we're happy to deliver."

Effective July 6, 2004, Southwest will begin 14 additional daily nonstop flights to the following cities: Fort Lauderdale/Hollywood (one daily), Houston Hobby (one daily), Los Angeles International Airport (one daily), Manchester, N.H. (four daily), New Orleans (one daily), Raleigh/Durham (four daily), Tampa Bay (adding one nonstop for a total of two daily); and West Palm Beach (one daily).

As previously announced, Southwest Airlines will begin its Philadelphia service May 9, 2004, with a total of 14 daily nonstop flights to the following cities: Chicago Midway (three daily), Las Vegas (one daily), Orlando (three daily), Phoenix (one daily), Providence (five daily), and Tampa Bay (one daily).
 

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