Southwest Airlines Raises Fares Again

[SWA/FO]

Gary Kelly has said "I would consider myself a failure if I had to go to our employees for cuts".

 

[pilotyip]

They still set the base price in most markets; they make other airlines match. I believe SWA has exited a couple markets over the past few years only to see a big jump in prices in that market. But according to Stats seen in ATW SWA percentage of wages to income has gone from 35% to 42% in the past 10 years, that is a 20% wages over the past 10 years. They do take care of their employees, but how long can they do if the employees expect another 20% in the next 10 years?

 

[lowecur]

Gary Kelly has said "I would consider myself a failure if I had to go to our employees for cuts".

:laugh: :laugh: :laugh: :laugh: :laugh:

imp:

 

[PilotAg]

There has been abosolutly no reason to question Gary's integrity or intentions. I am not sure why that is so funny lowecur. Look, we have nogotiations about to start so lets wait to see if you are right.

 

[lowecur]

There has been abosolutly no reason to question Gary's integrity or intentions. Then why wouldn't you give him the benefit of the doubt of extending your contract for a year? All he wanted to do is see where this crazy business is heading. It would give him a better fix on where the company stands as the Legacys come off BK, and the other LCCs encroach on existing WN territory. I am not sure why that is so funny lowecur. Look, we have nogotiations about to start so lets wait to see if you are right.

I'm not sure what you guys/gals have up your sleeves, but I'm guessing:

• No pay cut
• Job security
• Reduction of overall productivity for the company
• Maybe some 401K improvements

For him to actually make a statement like that is like setting himself up to fall on his own sword. His crystal ball has been good, but nobody is perfect. I still think the pilots will be working without a contract in 2 years, and if you get one close to what you seek, the business model will have to change drastically.

imp:

 

[FlyBoeingJets]

I'm not sure what you guys/gals have up your sleeves, but I'm guessing:

• No pay cut
• Job security
• Reduction of overall productivity for the company
• Maybe some 401K improvements

For him to actually make a statement like that is like setting himself up to fall on his own sword. His crystal ball has been good, but nobody is perfect. I still think the pilots will be working without a contract in 2 years, and if you get one close to what you seek, the business model will have to change drastically.

imp:

Some of the senior dudes want something to replace their stock options. Their pay was significantly higher with those being cashed in every year. When the end of this contract we get no more until the next one is penned.

The promise of "no pay cuts" is interesting indeed. Sure we can see 1 or 2 years ahead, but 5-10 years in the future is very murky. That is when cuts might have to come. I hope we don't do what Delta did and pen a contract then bleed the company until a BK filing.

 

[FlyBoeingJets]

Don't worry about the productivity going down. That is being very closely monitored by both the union and management.


The real advantage is one fleet type with minimal training events. Taking a pilot off the line for a month kills profit more than any of the other costs.

Reserve and JA are incredibly efficient too. You can be MCO or BWI domiciled to do MDW or OAK JA. Great flexibility.

Don't know what the magic number is on good productivity for a fleet type. 100, 200 airplanes???


JetBlue wants to reduce the number of employees, then they get another fleet type. You can't do both. I hope the "advantages" of the 190 outweigh the higher employee and overhead costs. They'll need it.

BTW, with regionals getting the 170 and 190, who is going to have the biggest 170/190 fleet next year??? I know that's thread creep, but I don't want to start another thread.

 

[lowecur]

JetBlue wants to reduce the number of employees, then they get another fleet type. You can't do both. I hope the "advantages" of the 190 outweigh the higher employee and overhead costs. They'll need it. I think SWA is going to find out very soon. If the predicted STL gateway is a reality, then the two will undoubtedly cross swords very quickly. That hub will expand into many SWA strongholds.

BTW, with regionals getting the 170 and 190, who is going to have the biggest 170/190 fleet next year??? Planes in service?...probably Republic. However, you will probably see a large order from NWA & DL in the near future. JB may end up with the most in service by the end of 2008. I know that's thread creep, but I don't want to start another thread.

.....I see Jetblue is reporting a 16% increase in yields for June. Obviously that new yield mgt strategy is working, albeit the LF's have come way down. Still anything between 75% to 82% is not overkill.

imp:

 

[YourPilotFriend]

How can you campare SWA to NWA at this time and tell us we're next????? No one and I repeat no one is going to send our CEO anywhere. The so called banks you're talking about, are looking for results. In 06, SWA has done just that. By not following and old legacy type model, SWA has increased 06 revenue by 18.3%(Fri, June 30, USA today). That's 3.3% above the goal. Please for the love of god tell me why they want us to take a pay cut????
Everyone always discusess the hedges and would SWA be making money without them? Yes, prob not as much. Guess what though, They're there and all the speculation in the world will not make them go away. The reason.......great management! We're very lucky to have that. We're treated well and as a group we get along with the company very well.
Why is it everyone is waiting for something bad to happen to SWA?
You really want SWA to mess up and see us take pay cuts too? Tell me what market average would be then. I really hope things turn around for everyone, because this sucks hearing what's going on in the airline world. I can't understand why people are wishing doom and gloom on others. People really need to relax just a bit.

I can compare SWA with any bankrupt legacy because they were restructured as LCC's. Operation costs at NWA are very comparable to that at SWA. The only advantage SWA has on the current markets is its fuel hedges. You can debate the fact that SWA treats its customers and employee's better than any other airline and that is the big advantage, however, NWA has a higher load factor.

 

[YourPilotFriend]

Institutional investors don't give a flying flip what a company pays its employees. The only thing they care about is share price appreciation. They don't care how the share price goes up, only that it does. I've never heard a money manager at a single investing institution say that he even bothers looking at employee unit costs. Some institutional investors look at employee/sales ratios to measure efficiency, but that doesn't apply to airline stocks, and it has nothing to do with employee wages.

I'm sure the SWA pilots will be just fine as long as the current management group at SWA stays around or is replaced by like-minded managers. I can't say the same for you fools at NWA who voted away your income and work rules for a pension that is doomed for failure anyway.

They care very much so as to what a company is doing with their money, they just don't outwardly show it.