Southwest Airlines Reports Loss

[maxblast72]

How exactly is it a "level playing field" again when swa must compete with companies like airtran who's pilots accept work at half price?

How was Southwest's pay compared to the rest of the industry in 1986 (Southwest 15 years of existence point)?

We have been working on a new contract for over 4 years now. Airtran Captain pay isn't half of Southwest's Captain pay. Airtran FO pay is crappy but when Contract 2001 was signed, everyone had a shot of upgrading under 2 years so FO pay wasn't big on anyones priority list. I think FO pay will be alot higher up the list during the these negotiations, and is one of the big reason our TA was shot down last summer.

 

[MINIME]

How exactly is it a "level playing field" again when swa must compete with companies like airtran who's pilots accept work at half price?

Common on now! I'm one of the biggest admirers of LUV. But lets not start comparisons about what is fair or unfair when dealing with LUV strategies. The hedges while a proactive measure on the part of LUV management, did not make for a fair playing field for the rest of the industry. Especially the financially weak like Frontier. Roll with the punches, just like everybody else has during not so optimum times.

 

[momalley81]

"An up and coming airline can't have industry leading wages."

Maybe not...but they can have Industry Standard wages.

Funny, but start-ups manage to pay Industry Standard rates for airframes, insurance, parts, spares, gates, infrastructure, taxes, fees etc.

Yes, they negotiate breaks here and there and receive some incentives now and again...But Pilots are the ONLY ones who will fall for the ridiculous argument that 50% or less is what is necessary to accept as a wage to "help" the airline get started or, in the case of harsh economic times, to survive.

YKMKR

There is one flaw with your argument.

Except for the late 90's SWA pilots have always been paid very close to industry standard pay.

Maybe some SWA pilots here smarter than me can post the SWA pilots wage rate ajusted for CPI from 1972 to present that SWAPA put out.

I was startled to see that SWA pilots have been very close to Industry Standard pay since WN's inception.

 

[ASADFW7]

The field is what it is, unless we go to socialism it is a free market.

 

[BrokenWing]

You didn't tell us anything.

SWA made an operating profit of $69 million.

Because the hedges are worth less now (about half)than they were about 3-4 months ago a charge was incurred.

This has nothing to do with SW not being able to make money in this environment without their hedges. How you came up with that is beyond me.

So just how much would SWA have made if they didn't have hedges? I read that they made 480 million off the hedges so I don't see how you can eliminate that and still show an operating profit.

 

[4 Fan Trashcan]

http://blogsouthwest.com/blog/mind-gaap-understanding-our-financial-results

Maybe this'll help.

 

[momalley81]

So just how much would SWA have made if they didn't have hedges? I read that they made 480 million off the hedges so I don't see how you can eliminate that and still show an operating profit.

I take it that you are not very bright.

 

[YourPilotFriend]

The hedges are meaningless, it's the right sizing of the company to compensate for the decrease in demand. SW was growing when it should have been shrinking. This is exactly what led the other airlines into bankruptcy. If the status quo remains, my 2009ish SW bankruptcy prediction made in 2006 still stands.

 

[FlyinGuy]

Friend....you show your ignorance because you do not realize how much cash and assets that SWA has. Many will fold before SWA goes down the Ch 11 or 7 road. That said, SWA must remain smart and proactive or we will have problems because no one is immune to it!

 

[YourPilotFriend]

Friend....you show your ignorance because you do not realize how much cash and assets that SWA has. Many will fold before SWA goes down the Ch 11 or 7 road. That said, SWA must remain smart and proactive or we will have problems because no one is immune to it!

Don't get me wrong, the other airlines are in way worse shape. However, I don't see how SW will be able to cut costs without selling off a major portion of the airline, or going into bankruptcy. This is reality, demand for air travel is going down. Ticket sales into next year are already down 50% in some sectors.