Southwest's magic formula: low costs, low fares and high pay

[LearLove]

They SWA are the highest paid because everyone else came down to their level and below.

Call me crazy but isn't that like winning at the special olymipcs?

 

[MLBWINGBORN]

Flopgut.

You have no idea what our people are like.

You have no idea what our business plans are.

And you clearly have no idea what you are talking about when it comes to relationships among the employee groups.

I see a trend here..

Clearly the People Department got it right..

 

[Flopgut]

Ivauir: I haven't been to UIO since I was an FE and those were all short overnights. We have long ones now but I haven't done any. I'll have to start doing them soon so I'll look for those places. I'm going to Panama a lot these days. Thanks for the nice comments on CAL.

Folks, I like airlines, airplanes and the people who operate them. I think we'll look back on this as a time in history when we almost lost legacy carriers. Thats if we do get through it! Things don't have to be going well at my own airline for me to be concerned. To that end, if things were going bad at SWA right now I'd be concerned, be sticking up for you, and throwing jabs at whoever was doing an endzone dance. I didn't say squat when Midway happened; That was a heartbreaker.

The SWA dialog on this board helps me gain insight into how your successful. (I'm trying to apply it believe it or not) The more nutty and oddball zingers I fire at you are done in large part so you can learn from an unsuccessful thought process. (not that CAL is unsuccessful, we are lucky its going OK, but the currently unsuccessful legacy model) The smack I fire at you is, in fact, tough luv. SWA is pretty well insulated from all the dreadful things going on today, but that may change someday. You won't be the least bit ready for it if you ignore possible flaws or think your immune.

The other part of why I do disagree with you is our operations and our goals do conflict. But that is completely normal.

You all have a good weekend and a good holiday.

 

[Mugs]

Enjoy the weekend...no kidding. I think most of your SWA buds would be a bit bewildered by how much time you guys waste promoting and then defending your airline on this forum. Those of you guys that just can't get enough of this same format month after month, year after year......there must be something wrong with y'all.

 

[Spectre]

Although what looks like a simple arithmetic problem, is much more complex in the business world. You need to take into affect the different taxes and profit sharing issues that affect the solution to the net profit/loss without hedges scenario. This has been a explained several times on this board so in the interest of repeating this once again how this works to the sheer boredom of all that have read this before I will forgo the details. The bottom line is that SWA would have posted a profit the past couple of years without them. Of course not the same level of profit, but a profit never the less.

As what was predicted by some on this board, the pricing power of SWA is such that they raise their prices to the expiration of the hedges. If you were to take the history of SWA's prices, account for inflationary variables, you will find that the average price of tickets is around 80% of what they normally would be. That was before the price of oil began to reach record levels.

This is a volatile industry and things can change quickly as we all unfortunately are painfully aware of. But since 9/11, SWA has become a stronger company in a depressed industry. Something extraordinary in any business. To say that the future is bleak for SWA because of the fuel hedging in place, do not understand the fundamental strengths of SWA. Its productivity of its employees and the reputation from its customers. Both untouchable for any "legacy" carrier.

Sure, when your fuel hedges run out, you can raise ticket prices. But do you really have that kind of pricing power? Heck, 50% or your passengers will just go back and ride on a Greyhound bus if you raise your ticket prices!

 

[Dash Power]

Sure, when your fuel hedges run out, you can raise ticket prices. But do you really have that kind of pricing power? Yes.

Heck, 50% or your passengers will just go back and ride on a Greyhound bus if you raise your ticket prices! Our passengers are really no different than yours.

 

[ivauir]

I didn't say squat when Midway happened;

I noticed, and I appreciate it. Have a great weekend.

 

[Hpilot]

Bridge for sale-waterfront

If you guys think you're going to be able to hold onto that pay without management improving productivity(no quality of life) then I've got a great bridge to sell you. No, I've never interviewed at Southwest and maybe one day I will. I hope you guy's can keep what you've got, but I'd be surprised if they weren't already trying to reduce your days off.

 

[Flopgut]

Flopgut.

You have no idea what our people are like.

You have no idea what our business plans are.

And you clearly have no idea what you are talking about when it comes to relationships among the employee groups.

I see a trend here..

Clearly the People Department got it right..

I have never applied to SWA. My somewhat negative critique of SWA is not the result of suffering the indignity of not being hired.

That being said, I'm sure they wouldn't hire me. And it probably would be some character flaw. The one thing I think I would do good on in the interview they don't check! So your not wrong conceptually.

If they did hire me, they would probably fire me. Probably make it some big season finally on the TV show. Personally, I would want to pimp slap any jackleg that was complaining who paid a fare under $100. It would be a great episode though. I would be be berrating some dork customer at the gate, the producers could have Herb come in and rip my wings off and crush a cigarette out on my face! Possible Emmy material.

 

[ivauir]

If you guys think you're going to be able to hold onto that pay without management improving productivity(no quality of life) then I've got a great bridge to sell you. Look a little closer at our financials. No, I've never interviewed at Southwest and maybe one day I will. I hope you guy's can keep what you've got, but I'd be surprised if they weren't already trying to reduce your days off.

The company has asked for (and I think mostly gotten) voluntary productivity increases. i.e. they said, "hey guys it would help out if picked up another couple of days" (for more pay). The company and the union have been discussing further productivity enhancements (out side of section 6), and we have been running several tests.

The bottom line is GK (and the financials) all indicate that our pay is safe. The weakness in our system it is based on greed. So much of our flying is discretionary that a pay cut could stifle productivity.