Southwest In Talks With Chicago Midway About More Gates

[FatesPawn]

But a typical remark. Why not take whatever shot you can at another pilot group? However, was that the best you can do?

I think it was meant as a a little ribbing you FarginDooshbahg.

Fate

 

[AFcitrus]

During my new hire training Joe Leonard came to talk to us. When asked about new bases at BWI or MCO he responded "I'm not about to take on SW head to head because I know who will win that and it won't be us". We still fly large numbers of flights out of both of those places but not to the point that threatens SW.

Knowing this I don't see us doing anything at MDW that would be perceived as threatening to SW. But for some reason SW is "pinging" enough about our deal in Chicago that they now are trying to prevent us from getting these gates, or so we are led to believe by the story that started this thread.

As for Mayor Daley, from the news I've been reading he has already given his blessing to the "deal". I guess it is a politician's perogative to change his mind but I don't see that happening.

SWA FO - sounds like you've been withholding a great deal of communting stress for a while. However, I don't think that you actually fly Airtran very often because if you did you would realize that 2nd and subsequent offline jumpseat riders RARELY pay that $25. So the next time you try to hijack a thread please have your facts straight. Actually, upon further review I don't think your comment was meant to hijack the thread but rather was another instance of a little unjustified insecurity rolling in about the Airtran-ATA deal.

Cheers and see you in Chicago

 

[HoursHore]

"we have got to protect this house!!!"

You are so white. JK

 

[SWA/FO]

Wow.... Maybe I should have typed "when your management" stops charging for the second jumpseat. No hijack attempt here.

I really don't think SWA was blindsided by what AirTran did (is planning on doing). They probably bumped into eachother in IND when the talks were going on.

I just don't think we are going to standby and watch you guys try to move into our backyard? Like I said, we are not delta.

I don't commute on AirTran but my official jumpseat list says: we have unlimited jumpseat agreement with ATA and I was thinking to myself...wow, all those (SWA) guys that commute on ATA will be screwed when AirTran takes over.

This is because of only 2 seats available and the fact that the second jumpseater has to pay...sometimes (ops agent/gate agent collects the money... the pilots have no say) come'on buddy that is the facts.

So I guess, if you guys are going to be players in MDW how about an unlimited jumpseat with SWA?

 

[SWA/FO]

Hey DOOSHBAG,

I've got better stuff where that came from...

But I consider AirTran a good company with (some) good guys. Like EV, MM, BS & RK to name a few. Plus, I am a shareholder... so don't give me $hit!!! Go Blue, peace out.. I guess you don't get my humor, you guys are too sensitive.

 

[FarginDooshbahg]

This is because of only 2 seats available and the fact that the second jumpseater has to pay...sometimes (ops agent/gate agent collects the money... the pilots have no say) come'on buddy that is the facts.

So I guess, if you guys are going to be players in MDW how about an unlimited jumpseat with SWA?

So what do you suggest the Air Tran pilots do? March right up to Joe and tell him how it's going to be. That SWA gets unlimited jumpseats.

I could be wrong about this, but the last time I jumped on Air Tran, they took as many jumpseaters as there were empty seats...not just 2. Maybe everyone but the first had to buy a pass, but they ALL were allowed to ride. So perhaps your "facts" aren't exactly straight. Maybe you are too busy patting each other on the back to worry about what everyone else is doing.

How about talking to Herb (or whoever makes the decisions these days) and tell him no more 737 type ratings reguired. It'll probably work just as well.

(I am not one of "those guys". Just someone that pays attention. It would seem that if you were a "shareholder" it would pay you to do the same.)

 

[FLB717]

SWA F/O
You need to try and relax, your "WE ARE the Sh1t not you " comments are reflecting poorly on yourself, your fellow pilots and a great airline. I don't see how we are your enemy, but I quess you feel that we are trying to take YOUR passengers.

 

[Steeler Fan]

Wow.... Maybe I should have typed "when your management" stops charging for the second jumpseat. No hijack attempt here...I don't commute on AirTran but my official jumpseat list says: we have unlimited jumpseat agreement with ATA and I was thinking to myself...wow, all those (SWA) guys that commute on ATA will be screwed when AirTran takes over.

This is because of only 2 seats available and the fact that the second jumpseater has to pay...sometimes (ops agent/gate agent collects the money... the pilots have no say) come'on buddy that is the facts.

So I guess, if you guys are going to be players in MDW how about an unlimited jumpseat with SWA?

Wow...this has been covered EXTENSIVELY...but, here's the deal...I'll do whatever I can (including sitting on the Flt Attend jumpseat) to help as many fellow airline pilots (my company or not) get on board...The jumpseat policy, although not ideal, is way better than what DELTA and AMERICAN has (yet I'm wondering why they don't get slammed like we do). I think every AirTran pilot on this forum doesn't agree with the $25, but like I've said before, for me, I like knowing I'm getting a ride home. Yes, hopefully we can get rid of the $25, but for now, we'll always welcome Southwest Pilots on board (who knows, maybe even in Business Class)

 

[Jim Smyth]

Southwest has always given its jumpseats to whoever went through the trouble to send a letter requesting it to our VP of flight ops and is authorized by the FAA to be there. We were giving jumpseats to many other airlines for many years when they didnt even reciprocate with us. Kinda pissed some of the guys off that commuted off line and couldnt get the jump seat because of that rule. But we kept smiling and taking there pilots on our jumpseats. It's a bargining tool during contract negotiations and with the current state of the airlines in general I think since money isnt too likely for most airlines in the next contract, maybe some of the other airlines can get the jumpseat favor returned. The last few years we have added alot of airlines to where we can give multiple jumpseats without the gate agent giving you any crap for it. So if we all work together we can improve everyones commutor life.

Also FWIW, SWA likes competition. So we welcome you Airtran guys to the Windy city. We have always liked the ATA guys and have the highest respect for them and hope they can stay around too. There is plenty of room for everyone.

 

[Pickle]

SWA/FO said: "wow, all those (SWA) guys that commute on ATA will be screwed when AirTran takes over."

Yeah, poor guys. Unlike us ATA guys who will be out of work. But these guys will have to pay $25 to get to work. Maybe if there is enough left over from the unemployment after paying the mortage, putting food on the table, and paying for sons diapers and such I can try to contribute to their "get to work fund". Where should I send the check?

 

[SWA/FO]

Guys..guys... I didn't say we are the $hit.. I said "don't give me $hit".

We have unlimited jumpseat with AA.

 

[canyonblue]

ATA Bankruptcy Filing Brings AirTran Into Midway
Aviation Week & Space Technology
11/01/2004, page 24

David Bond
Washington

As ATA sinks into Chapter 11, its new 'partner' deals for Midway gates, slots in Northeast U.S.

LAW OF THE JUNGLE

A bankruptcy-protection filing by ATA Airlines will lead to the kind of realignment that airline observers have been expecting but not seeing so far-- the transfer of an endangered airline's assets, however limited in scope, to an up-and-coming competitor.

Even as AirTran Airways reported its first quarterly loss since the three months that immediately followed the Sept. 11, 2001, terror attacks, the Orlando-based carrier says it will pay ATA $87.5 million for rights to lease up to 14 gates at Chicago Midway Airport, authority to develop ramp space at Midway for as many as 10 gates for regional jets, and time-controlled takeoff and landing slots at the two U.S. High-Density-Rule airports--New York LaGuardia and Reagan Washington National. AirTran has tried with only limited success to gain access to both, and the ATA deal will give it 19 slots at LaGuardia and eight at Reagan.

The transaction, subject to bankruptcy-court approval, will provide much-needed cash for ATA, which assured customers last week that it intends to conduct business as usual as it reorganizes, and set out to find debtor-in-possession (DIP) financing. The Air Transportation Stabilization Board, which oversees an ATA federal loan guarantee approved originally at $148.5 million, will permit the carrier to use $20.7 million--95% of its available cash, held as collateral against the loan--for day-to-day expenses prior to a DIP loan.

For AirTran, the deal opens up opportunities. CEO Robert Fornaro says AirTran has wanted to reduce the concentration of its operations at its hub in Atlanta to about 55% of its capacity by the end of 2005 because cutthroat competition there is likely to strangle revenues and profits. He says AirTran thinks it can succeed at Midway because its costs are lower than ATA's, its aircraft are smaller and its current routes mesh well with the new ones.

Beyond Midway slots, AirTran would get additional slots at two limited-access airports, New York LaGuardia and Reagan Washington. Credit: BILL HOUGH

To AirTran, Atlanta is a good place to lie low for a year or two. "We think the prospects in the Southeast are going to be really tough in the fourth quarter of next year," Fornaro told securities analysts Oct. 27. "Our feeling is that eventually the Southeast will rationalize, that Delta Air Lines has done everything it can. They put themselves on the brink of bankruptcy chasing AirTran and JetBlue. That still has a way to go. Their new strategy in Atlanta [increasing capacity] is going to further enhance their losses, because they'll be competing with themselves. They've got 75-80% market share, and they're going to take their own customers.

"We have to live through it. We think in the short term we can dramatically improve some of our weaker routes by reallocating that capacity over the next 12 months."

AirTran sees Independence Air, this summer's low-fare regional-jet startup at Washington Dulles International Airport, as another major factor in the collapse of yields in the eastern U.S. AirTran estimates that Independence dictates prices in about 40% of its Atlanta origin-and-destination markets, and that matching Independence's fares cost it $5-6 million during the third quarter. "They have very, very low fares," Fornaro says. "Delta has been very, very aggressive with them, and we've had to match them. . . . We don't think Independence Air's strategy is sustainable, so hopefully that will correct itself at some point next year. . . .To be flying an RJ with $59 fares is one of the silliest things I've ever seen. The RJ is a high-cost airplane."

Independence reported an $82.7-million net loss for the third quarter, a turnaround of more than $100 million from a year-earlier profit and a "significantly larger" deficit than it had expected, according to CFO Richard Surratt. Unrestricted cash was down more than 40% during the quarter to $198 million, and some analysts are coming to see the carrier as a potential Chapter 11 case. Surratt declined to reveal the cash burn in the third quarter but said Independence expects to reduce it in the fourth. A big factor in the third quarter was a large lease payment in July, the last of 2004. Another payment is due in January, however, so Independence is meeting with lessors and creditors about relaxed terms. The company also will try to reduce costs, increase revenues and borrow money against unencumbered aircraft and spare parts.

Independence is facing problems in filling up its airplanes; its load factors are particularly poor in markets it entered during the summer, which comprise more than half its routes. To cure this, the airline is negotiating participation in global distribution systems, something it didn't want to do because selling tickets without them would minimize distribution costs. In another turnabout, it will reduce frequencies in markets where it deploys the most capacity. In December, it will reduce Dulles-Atlanta flights to eight per day from 16, Newark to 10 from 16, Boston to 12 from 16, New York JFK to 13 from 17 and Raleigh-Durham to nine from 14.

ATA Airlines' 757s had too much capacity to be successful at Chicago Midway, AirTran believes. AirTran will substitute its 737-700s as soon as it can.Credit: JOSEPH PRIES

As AirTran moves into Chicago Midway, it will not only have a lot of capacity to deploy, it also will be able to contract for wet-lease flying by ATA, using 15-20 of its 737-800 aircraft. AirTran itself is scheduled to take delivery of 16 737-700s and 10 717s in the next 14 months, all with committed financing. It intends to wet-lease as a transition, lasting less than a year and preferably about six months, and substitute its own aircraft as soon as possible.

At the same time, the Midway wet-lease would be one way to increase capacity even further than the roughly 30% increase AirTran expects from its own fleet growth. That could be crucial if US Airways, Delta or Independence pull down capacity during the year and AirTran wants to seize the moment and move in. AirTran assumes nothing. "US Airways is a tough competitor, and they're going to find a way to hang in there for a while," Fornaro says. But he added that AirTran will "participate" if US Airways shrinks, and CEO Joe Leonard made clear that capacity won't stand in the way. "I have no doubt we could get our hands on some additional airplanes if need be."

AirTran is counting on its smaller aircraft to make the difference between ATA losses and its own profits at Midway. AirTran's 737-700s and 717s contain 117-127 seats, while ATA was flying 185-200 per aircraft, Fornaro says, and with aircraft that large, "you create your own downward pressure on revenue." ATA will be a partner of sorts--the Midway deal provides for code sharing and a combined frequent-traveler program.

Leonard was sanguine about taking on Midway's big dog, Southwest Airlines. "If you can't compete with Southwest you've really got to get out of the game, because Southwest is going to be everywhere eventually," he says. "Our costs are the same as theirs. We run our company exactly the same way they run theirs, to maximize profit every single quarter. We're not out to show that we're macho. They don't behave that way, unlike a lot of other competitors.

"We manage to coexist peacefully in Baltimore. They're the big gun there; we have a sizable operation, but they don't feel threatened by us, as they should not. We will actually improve the yields at Midway, which they should be happy about."

 

[atafan]

My inside intel advised me that AirTran no longer has the inside track to make this deal happen. SWA or an AWA/SWA deal is becoming more likely. There is also at least a couple of private investment groups making a play to take ATA and reorganize the entire company.

Obviously, since AirTran does not want to take any of the pilots from ATA I hope that AirTran is unsuccessful with their current offer.

More to follow.... Stay tuned.

 

[mt2]

ATA's F/A union, AFA, reports they were told by MGT that the LGA and DCA slots are no longer part of the deal. Is the deal unraveling ?

 

[CaptSeth]

ATA's F/A union, AFA, reports they were told by MGT that the LGA and DCA slots are no longer part of the deal. Is the deal unraveling ?

More like they had to up the ante a bit. Those slots are worth a LOT. Things will happen pretty fast, though...

 

[FL717]

.....

 

[HPaul3]

HP,

To say that Mayor Daley is the 2nd most powerful man in American politics is more than a little bit of a stretch. He may be very powerful in Chicago and Illinois politics and he may hold some sway above that. You may be right that he ends up siding with SWA in this deal. However, it's hubris to suggest that he has that much influence on a national level. I'm guessing that you live in or near Chicago. Sounds like a case of perceptual bias.

SWA is powerful but so was UAL five or six years ago. SWA's real strength is it's culture. You guys are now nearly the highest paid pilots in the industry after your recent raises. You are attracting everyone and their brother to apply the same way that UAL did five or six years ago. Many (not all) of these folks are lured by the pay.

Also, don't forget that another cornerstone of SWA's culture is the underdog mentality. You guys aren't the underdog anymore. Now, other airlines are afraid of being crushed or squeezed by SWA.

Your airline is programmed to double in size by 2012. It is going to be a huge challenge to grow the culture along with the airline. That challenge will only be complicated when you have brought on a large portion of your pilot force with dollar signs in their eyes and the company has shifted out of it's underdog status. If SWA loses it's culture then you guys lose the whole bag.

Mr. Fly,

Hubris? Daley defines the word. Believe me, I'm no fan. This is the man who tore up Meigs Field in the middle of the night, using taxpayers' money, and not only walks free today but actually gained strength from the maneuver. Show me another person in all of American politics who could get away with something like that, and I'll entertain your opinion.

As to the underdog/maverick question, SWA's position of industry leadership is a very recent phenomenon. The fundamental qualities that set the company apart have not changed since the industry has come under the tremendous post-911 malaise that precipitated their rise to prominence. The culture is the same. And while there's sure to be some growing pains as they expand, I have faith in their ability to seek people who will embrace and support the culture. That's one reason they interview so many people and hire relatively few. Everyone who shows for an interview is fully qualified when they walk through the door, but they hire for attitude. I don't disagree that other airlines modeling their operations after SWA's is smart business, but modeling and execution are two different things. Beating SWA at their own game is certainly not impossible, but again, I wouldn't bet against them.

And I wholeheartedly disagree with your comparison of SWA to UAL with respect to attracting pilots because of high salaries. Most pilots who landed at UAL in the pre-9/11 days wouldn't even have considered SWA as an option, and some even left good seniority at SWA to go to UAL and other majors. I recognize it's not for everyone. But nowadays I think the most important reason people are lining themselves up for SWA is the stability of the company, and that has been demonstrated especially strongly since 9/11. When I attended my wife's orientation at UAL, the company made a big deal about congratulating everyone on their new $6 million career. Nobody did that my first day at SWA. She had a $40 thousand career at UAL, and now I pay her very well to be a full-time mom. Yeah, we all want the dollar signs, but what we really need is at least a chance at a stable, long-term career where we're compensated fairly for our skills and experience.

SWA can coexist with anyone at Midway, and they will make a considered decision as to how much of a presence they need there. Good luck to all others as they make their bids...like I said before, the competition is good.

Cheers!
HP

 

[shootr]

For the record, I've jumpseated on Airtran numerous times out of BWI and ATL and never once have I been charged the $25. From the ticket agents to the gate agents and the aircrews, I've been treated very well everytime I've used them to get home or to work.

From a SWA guy, I'd like to say a big Thank-you to all of the Airtran guys!

Good Luck All,
shootr

 

[mad691]

If you read the F/A union letter it states that ATA will NOT be giving up the gates in DCA and LGA. Airtran wants the slots not the gates.

 

[mad691]

On November 1st the MEC met with Jim Hlavacek (ATA's Vice-Chairman), Dick Meyer (ATA's VP of Labor Relations) and Betty Hawkins (ATA's F/A Labor Relations Manager) for a review of what has occurred during the days prior to and after the bankruptcy filing.

Management explained that due to delinquent payments on the 757's, one of the aircraft, 512 was repossessed the day before bankruptcy. However, had they waited one more day, 9 additional 757's would have been seized.

Management expressed an eagerness for a deal with America West Airlines, but they failed to structure one. In the end, it was AirTran who succeeded. In spite of the Company's urging, AirTran management is unwilling to take on ATA employees in the initial offer. Jim Hlavacek stated that seniority mergers are counter-productive in today's market! Perhaps loyal employees are counter-productive too.

Management stated that in their opinion proposals made prior to bankruptcy, are usually the ones that survive the bankruptcy process. SWA is only interested in 4 of our gates, giving them 23 gates in MDW. With control of that many gates, Southwest would have a virtual monopoly in the MDW market. So that deal will probably not fly.

If the AirTran deal succeeds, they would also hold the option to lease the services of Chicago Express. If they do not choose to exercise this option, then Chicago Express will serve as a feeder to the Indianapolis market. In either case, CHI Express will continue to feed the IND/MDW market. Regional jets may be added to Chicago Express in the future. When asked why they would not put these aircraft into the ATA mainline flying, the response was that the Pilots would not agree to an acceptable pay rate for these aircraft.

To illustrate how much our situation is changing, the Company's presentation showed us operating 29 aircraft after six months. Today that number was changed to 38. Since this is a reduction of 31 aircraft from today, this will clearly mean a gradual loss of jobs. The sale of the gates in LGA and DCA will not be part of the AirTran deal as of today.

The anticipated plan will leave us with the PH operations, the Military Charters, Ambassadair, Chicago Express - all profitable operations. IND operations - showing a $6M a year loss will be reduced. Flights to Mexico and the Caribbean, operating out of 2 to 3 city gates in Midway, along with the LGA and DCA routes, will continue until a buyer is found for those slots. AirTran will be feeding our Hawaii market out of MDW.

The Company intends to seek additional charter flying, but say they will need competitive labor costs to achieve this.

When asked what the rationale was behind our taking $24M in concessions when at the same time management was planning to apply for personnel retention bonuses, the example we received was to ensure that those who operate and service required systems, like Sabre, don't resign and leave the operation at a standstill. Perhaps there could be justification for key technical personnel, but top management needs to be as committed as we are without being bought. It is a matter of trust.


We then asked why consideration was not made to the many other employees who put their heart, soul and lives into this company every day, who ensure the aircraft can leave the ground and support the longevity of ATA? We asked if they knew what it was like to survive on $100 or less (after paying bills) from one paycheck to the next?


We asked, so if we're to give our hearts and souls, why shouldn't the ones who run this company be as willing to give instead of taking from this already ailing company? The answer was: "Well, George is losing everything, his stock, his homes, his airplane, his boat. He's not a multi-millionaire you know!" You can imagine our reaction! AFA will NEVER support retention bonuses for top management. We will do WHATEVER IT TAKES to defeat such a proposal.

The information we received prior to our previous negotiations was persuasive enough to convince us that our help was needed to mount the difficult times to come. However, if we had known that management was planning to ask for retention bonuses, our decisions would have been drastically different.

The MEC will do whatever is necessary to protect our jobs. We will consult with our attorneys, and determine the best course of action for the membership. At this time we have our attorneys in the hearings and are assessing the situation as it changes on a daily basis. AFA International has been successful in ensuring we hold a seat on the Creditors' Committee, something that is considered very rare in Indiana bankruptcy courts.

In Solidarity,

Jacki Pritchett
ATA MEC President