Spirit Furloughs

[enigma]

PilotYIP, sorry to hear that fate has been against you in your career. I believe that LUCK is the number one determining factor in career success.

Now to address your post in support of Spirit management. If you know NK as well as you infer, you know that our ALPA volunteers do try to work together with the company. Our scheduling committee spends countless hours trying to develop workable schedules. The MEC and especially its chair, have taken repeated flak from the membership because they are TOO willing to give the company an LOA any time the company wants one. Please check your facts next time
8N

 

[ifly4food]

You have yet to answer my question. What do you think would happen if we lowered our labor costs to the level of the low cost carriers. Could they sustain operations with similar costs against our size, network, ff program, alliances, schedule, deeper pockets, international route structure, etc? How do you think they would try to recapture their advantage?

I'll tell you what I think. I think that their mgt would come looking for concessions, and they would get them to "save the company." We would then once again be the higest paid. Will you once again opine that we should give concessions. Pattern bargaining works on the way down as much as it does on the way up. Perhaps that cycle is inevitable; I would hope that we at least explore all other options before we conceded. As a fellow professional pilot, I would have expected that you would feel the same.

I await your response to my scenario.

I think the LCCs will continue with their current business plan, and laugh at Delta for trying to copy them to play catch up.
Why should they change something that's already working for them?

The truth is that even if Delta lowered its wages to LCC levels, it still couldn't offer seats as cheaply. It's the very size, network, ff program, alliances, schedule, deeper pockets, international route structure, etc. you mention that is crippling the majors. They cannot operate as efficiently, and thus will still have a competetive disadvantage to the lean, mean LCCs.

No, I feel that it would not start a "bidding war to the bottom" as most union hardliners believe.

You know, I should say something here... In case you've started to wonder, I am a active ALPA member. I just don't drink anyone's Kool-Aid... mgt's or ALPA's.

A basic, widely accepted premise of collective bargaining is that the best course of action a union can take is to do what's best for the individual (the MEC) AND the collective group (all of ALPA). In the last 22 years since deregulation, too many MECs have focused on what's best for the individual and the collective has suffered.
It's been proven that doing what's best for the individual only is a flawed premise because in that case nobody wins... by nobel prize winning mathematician John Nash.

In my opinion, this is why ALPA and the industry is seeing the labor problems we face.

 

[Publishers]

salaries

Pilot salaries only maintain a false sense of stability now under parttern bargaining.

In the current state of things, and I mean over all the years since deregulation, we have a system that could best be called the yo yo salary system.

They go up[ due to the power of the unions as well as the weakness of the companies. When one side of negotiations is in a stronger position, you no longer have negotiations at all, just formal demand. When the results get to a certain level, they hit the wall, a down cycle is entered, etc, and concessions are give or a BK judge becomes the strongest party in negtotiations.

Salaries are then lowered effectively, or held where they are.

The guys that are lucky enough from a timing view point win regardless of their skills or deserving to. Others lose.

 

[FlyDeltasJets]

IFF,

Your response makes it obvious to me that you have not read any 10k's in a while. Your assertion that the lcc's would still have a large cost advantage with the same wage scale is incorrect.

I invite you to visit the "investor relations" portion of various airlines and do the research yourself. The 10k's can usually be found under "SEC filings." You will see that do to our size, economies of scale, and fuel hedging program, we actually have a cost advantage on many items. However, the wages and benefits differential is what allows many of the lcc's to prosper from a cost advantage. It is all in black and white if you take the time to research it. If you don't feel like it, I have demonstrated it recently with airtran, though the numbers are similar for most lcc's. You can find my analysis under the thread "airline profitability". I hope that it will help.

I also don't drink the Kool-Aid from anyone. I take the time to research the issues myself (and not from the "Beautiful Mind" movie! ).

 

[Ty Webb]

You and DALPA both don't seem to get it, FDJ. Hourly wages are not the determining factor in our success and your losses, although the productivity is one of the components . . . It is an overall corporate culture of frugality and innovation in day-to-day operations that encourage savings.

One small example . . . I don't see you guys powering back over there, so you need more tugs, more tow-bars and more rampies. Your gate agents would never toss a bag, your ticket agents would probably never go help out at the gate, and I'll bet you have never pushed a wheelchair up the jetway.

The primary objective of any company is to make money. It is a business, not a charity. Most of us here realize that if the company makes money, we make money. If the company loses money, we lose money, and may possibly be out of a job. If the pilots strangle the company, you end up wearing the orange apron.

 

[FlyDeltasJets]

I think those apples were tainted, because you are obviously high if you honestly think that Delta and not airtran is lowering the prices.

I also think that you will find that on the vast majority of your routes, we have the same or fewer amount of seats that we did before you came along. I think that you are grossly overestimating the amount of "dumping" going on and its effect. However, that is just my theory right now, I will have to research the numbers.

However, the fact remains that you are making money on fares that we are not due almost completely to the fact that your company pays its employees less than the competition. I have demonstrated through SEC filings that this is where the lion's share of the cost advantage comes from. I have yet to hear anyone refute the numbers.

You also act as if Delta is inviting losses. If they are dumping seats, it is because we must to counteract your cost advantage with our schedule advantage. Are you suggesting that we surrender market share rather than compete with all we have to fight a carrier invading our territory?

I will get back to you in a few days, hopefully with an analysis of before and after capacity on common routes (if I can find it and I don't lose interest! ). Suffice it to say, I firmly believe that the lowereing of prices can be attributed FAR more to the low cost carriers than the majors. In fact, I am shocked to even hear someone blame for keeping prices down! Usually we are blamed for the opposite!

 

[Ty Webb]

Sorry, FDJ, because I had edited my post to eliminate the part you were writing about . . . and then I saw your response.

Sure, it's true. DAL's response is to flood the same time of day with extra seats, seats that they sell below cost . . . hence the term "dumping".

See, we raise our prices as the planes fill up. If they never get beyond, say, 80% full, because DAL has dumped extra seats into he same time slot (at a loss) then we never sell enough to trigger a bump to the next fare code. . . .

If DAL only put as many seats into the market as they could sell at THEIR cost, then they would make money AND we would make money . . but that doesn't happen because DAL still thinks that they are protecting "their" market share. . . so they keep losing money and artificially keeping the price down.

Get it?

Also, in regards to labor costs, those numbers you see in the 10Q's and 10K's don;t tell the story, they tell the results. See my previous (edited) post.

 

[FlyDeltasJets]

Ty,

You changed your whole post on me.

#1. You are incorrect in your assessment of Delta employees. Unlike my former airlines, I have seen MANY times people pitching in to help out. And yes, I have pushed MANY a wheelchair up a jetway. The Delta Spirit is not completely dead, as evidenced by the repeated refusal of a union from many workgroups on this property. No airline has a monopoly on employee love for the company. I love my airline, I have dreamed of it since I was a child, and even though I have my differences with current mgt on many issues, I have ALWAYS done all that I could to help the company...And my attitude is common in every department.

#2. If your innovations are so successful, why is "Employee wages and Benefit" the only expense that you are lower than Delta? Why do we have a higher revenue/employee (source: Yahoo marketwatch)? I glad that you believe in your airline, and I hope that none of us have to wear the orange apron. However, I think that you are being naive if you think that your wages and benefits are not the reason that you are profitable and we are not.

#3. I think that you will see that demonstated if we were to take a paycut. Granted, we would not accept a cut to your levels, but if the wages and benefits were equal, I don't think that it would be Delta employees being sized for that apron. While that might be good for Delta, it would not be good for airline employees. I have mentioned before that concessions may be needed. I know that the survival of the company is paramount. However, just as you caution about asking the company for too much, we should be careful that we don't give them too much, either. The company is important; So is the career. The effects on both need to be considered, and you can be sure that we will do so.

Fly Safe

 

[Ty Webb]

I don't have the time to assemble a blow-by-blow comparison of our expenses versus yours . . . . and I don't need to. Common sense says that if the difference in our flight crews hourly costs and yours is not the difference. . If I am making $51. and the Capt is making $120., then how much of a savings per hour are we talking here? Maybe $150.00/hr? What's that- one more seat sold on your MD80?

The numbers you are looking at in the 10K are aggregate numbers. You can't just look at it and say, "Hey- they are paying their employees less, that's why they are making money". Our pilots are also flying more block hours compared to credit time. Our rampies are parking more planes per hour, etc. We don't have any 15 yr F/A's and we don't have ACARS, nor the other bells and whistles. We don't sponsor the Olympics, we don't have a stadium named for us, and we aren't the Official Airline of Anything (well, maybe the Jerry Springer Show).

We provide transportation. We make money, we are employed. We are growing. We are here to stay.

If your company realized that and quit dumping seats, they could go back to charging a price that they can actually make money at, and we would then all be making money.

Otherwise, what they are doing is "protecting marketshare" in a segment of the market that they can't make money in, anyway. We are not going to go away, so they are, as the old saw goes, losing money on every flight, but "making it up on volume".

Hmmmmnnnn!

 

[Counselair]

To all those that think pilots are over paid and taking pay cuts are the way to save an airline...

I'm currently on my sixth airline.

I've been R.I.F'd from the Air Force.

My flight school and went out of business from under me.

I've been through bankruptcy at two airlines.

I've been furloughed three times.

I've been working on this "career" for 13 years.

Last year was the first time I ever came close to six figures.

Prior to that the most I ever made was forty K.

I couldn't even guess what my average income would be over the years.

I now, gratefully, work for the largest airline in the world.

I would have to work alot of years at six figures to make back what the public thinks I've been making.

Don't rely on management.. make every dime you can when you can. You'll need it while waiting for your next job. I've had alot of great jobs but one lousy career. I'm still thankful for all the opporunities I've gotten and those I've made happen.

By the way...last week my paycheck was $450 dollars on unemployment and I'll probably not be recalled for many years to come.

Be proud of what you do and what you've earned. You deserve every penny of it.

Counselair

 

[FlyDeltasJets]

You name all these high cost items, yet our costs are lower than yours on everything except wages. You talk about higher flight times and ramper productivity, yet neglect to address the fact that our employees are more productive on a revenue per employee scale. You mention "dumping," yet I think that this has ocurred far less than you think. Until I have the numbers, we will have to agree to disagree about the effects. Even if we did dump, what would you suggest we do. Even if we only put one plane on a route, we still would not be able to compete with your costs. The result would be huge expansion for you and retreat for us (see U and LUV in BWI). We will not let that happen to us, I can assure you.

You seem to want to point a finger at many incidental items, yet you want to disregard the effect of an airline's largest cost: Employee wages and benefits. You mention a $150/hr cost differential (you disregarded the other 80% of the airline's employees) as if that was negligable. Multiply that by the millions of block hours we fly, and the difference no longer appears so minimal.

I guess we will have to leave it at this. You beleive that wages and benefits are not as important to cost savings as some other items. I disagree. I beleive that the wages and benefits of low cost carriers are the primary reason that they are profitable and the majors are not. I believe that I have supported this assertion with numbers from SEC filings. Wages and benefits make up about 40% of an airline's costs (or in your case, a bit under 30%). To ignore such a large percentage of expenses in, in my opinion, a bit naive. The simple fact is, if you study the CASM makeup of both airlines, you will notice that in 2002, if the wage and benefit percentage of CASM equaled yours, our total CASM would in fact be lower than yours. I also believe that the net effect of the practice of cost competition based on employee wages will be harmful to the profession. I think that we are witnessing that right now.

Is there anything that we can do about it? I don't know. Lately it seems as if we are along for the ride, and the proposed attack on the RLA certainly won't help if successful. However, I certainly think that we should try, and I don't think that we should shy away from discussing factors influencing our struggles. Thank you for doing so with me. Discourse and honesty can only help all of us.

P.S.
I listed my beliefs, but I left one out: I also believe that Delta will rise to the current challenges, just as they have always done in the past. We have faced adversity before, and we will do so again, and every time it happens, the same people say that the "paradigm" has shifted and the majors will go the way of the dinosaurs. More often than not, the "dinosaurs" outlast the shiny new media darlings! I think that we will weather this storm as well, and come out on top as we have done so many times before (yes, mgt and labor together!). I am so glad that I am at Delta, and even though I am furloughed, I wouldn't trade airlines with anyone.

I am sure that you feel the same about your airline, and that's good. Hopefully we can both prosper. I wish you well.

Fly safe.

 

[FlyDeltasJets]

Counselair,

I LOVE that avatar! As a former TWA guy myself, I will always have a special place in my heart for them. I had such a wonderful time there, and the people were the greatest in the world. However, it did teach me (and, it seems, you) that concessions were not always the answer. I am certain that none of your bankruptcies were at airlines with higher than average wages.

Both of our respective new airlines are facing many pressures, and concessions may be needed (notice I said "May"!). However, they need to be judicious, well-allocated, and most of all, temporary! We should be VERY careful about giving up what we have earned, we may never get it back.

Your post summed that up nicely. Good luck, and hopefully we'll all be back where we belong soon.

 

[justApilot]

ifly4food...said....but why should a Delta pilot make 5 times as much to fly an MD80 than you do? Does he work that much harder than you? Does he have that much more responsibility?



Because they negotiated it!!!!!!!!!!!!!!!!

 

[Counselair]

FDJ,

Sorry to hear you're out on the street too... misery doesn't love company. You're right, of all the companies I've ever worked for TWA had the best people, especially with the hardships they have faced. Perhaps it does build character, I know I met alot of characters there. Hope to see you on the jumpseat one day.. your plane or mine.

Counselair

 

[surplus1]

Enigma,

Given your company's excellent January performance and growth over the last year, what is your take on why they are furloughing your pilots now?