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SWA 2Q financial report...

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V70T5,

Your comments listed below are meaningful & useful for folks wishing to come to SWA. They will hear them often, mostly from competitors but also from fellow SWA pilots. I realize you don't wish to get into a big debate & I understand why. I didn't take your comments as flaming but do find them worthy of debate.

>yeah, great, now maybe you guys can start getting paid like the other airlines pay their 737-700 drivers, as it is obvious that SWA is making money on the back of its lower paid workers. And don't give me that "all 737's" crap, that is a drop in the bucket compared to unit labor cost!<

The assumption (my apologies in advance for making them) from your statement is that wages for SWA pilots/employees or for any airline are & should be based upon what other airlines pay their pilots/employees.

In fact, in reality (IMHO) who determines the worth of a commodity is the customer, not the employer or other employers. Yes, for a period of time employers can bid up the wages of employees to get the right folks (sports teams do it all the time) but at some point the fan/customer will/does rebel. As they have against airlines that continue to charge confusing & high prices. Not all of this is caused by wages though.

What has caused the average wage of an airline pilot to in fact decrease over the past 20 years(inflation "real" dollars) is one simple fact, deregulation & in turn competition. With deregulation fares went up whenever the airlines could get a rate increase & which was often. Wages inevitably climbed & unions knew they would increase because the expense would be passed along at the next review board for fare increases.

With deregulation, that has slowed the "real growth" of wages, not SWA. SWA has merely taken advantage of what customers wanted, cheap fares & therefore we have filled airplanes & grown exponentially while other carriers have grown only marginally. Pay is only a portion of the equation however but labor costs do take up a huge portion of the equation & can't be ignored.

If the SWA pilots do vote for this current contract & raise our pay to within 15% of the industry average (some will argue that isn't a guaranteed raise because it is based upon profitability which ISN'T guaranteed!) by 2006 & we then get industry average or leading pay for subsequent years (a two step process, the current extension + a new contract in 2006) SWA will not fold obviously but we won't be making as much profit as were before either most likely. Will folks still flock to us if our fares have gone up proportionally? Who has a crystal ball to determine where our industry or pay scales will be in 2006 but for those like myself who are at other airlines with the same seniority but with a higher hourly pay rate than me, I wish them well because at all the airlines except for AA those 1st, 2nd & 3rd yr FOs are furloughed. Regardless of the fact a 1st, 2nd or 3rd year FO hard pay is higher than mine, if you're furloughed, it doesn't do much good.

Again, I respect your comments & hope others will use the proper tone in discussing the issue. I didn't take your comments as negative but merely as comments that are repeated quite often but that may not completely paint an accurate picture of SWA's role in determining wages....ultimately the customer decides in a non-regulated industry, my preferences completely!

Thanks again for your comments & good luck in your current job & getting on at AAL, a great competitor & airline.

God Bless
 
tredding@swa

Man, sorry you had such a bad experience in corporate flying.

First of all - Yes, I too would love to get on at SWA!

But my last corporate job,,,,,, No 135, always home for dinner, rarely over 4 legs per day, numberous 3 hour duty days, overnights only on ski trips on which my wife and my boards were invited, weekend flying only during ski season, business flying only on Tue, Wed, or Thurs (never all three the same week), extended overnights once a year for recurrent (3 nights), six digit pay, parking inside the private hangar, and the potty policy was "if you use it, you clean it."

My only bad experience of corporate was that "I had the perfect flying job until........ and now the airplane's sold." That's why SWA looks soooo good!

Like I stated earlier, sorry your corporate experience was soo ugly.
 
I said I wasn't gonna say anything, but I had to respond to Chase as he was very civil (pardon the pun).

I agree with you on many of those points. I am just making the point that SWA is no longer this little cheap airline (like say a Frontier). They are a major player that competes with AA in 70% of their markets, yet they are paying almost all their labor significantly less, and MORE IMPORTANT, their productivity is higher, which also translates to cheaper labor. So I guess, we stand at a junction....all of the others go "Walmart" (as Don Carty called it) and we see wages erode, or SWA steps up as a true "Major" and starts to pay "Major" wages. Profit share is not enough.

Anyway, I don't fault anyone for working there, it is a **CENSORED****CENSORED****CENSORED****CENSORED** secure job, and that says volumes during these trying times. I have always been into the idea of raising the bar, kind of like UAL and DAL did in their last contracts, unfortunately UAL can't compete with DAL and their swarms of RJ's, nor can either of them compete with CAL with their 50% reduced wages...so this is the dynamic we have today. And none of them can compete with SWA with their high labor productivity and low cost "structure" ----- i.e. labor costs.

Anyway.....I hope the best for all of us and more importantly, for our profession....times are gonna get better, it's not if, but when.

Finally, I don't hate my corporate job, it's a blessing, and I too stay home for weeks at a time, and get paid a salary no matter whether I fly or not. I don't do air taxi, and "ass kissing/bag toting" I fly middle manager/techs who carry their own bags and usually get paid less than I do. It is a decent job, but I isn't a place that I can retire from.
 
V70T5

Thanks for your comments. I too hope things will improve in the industry as you do. I'm glad you're enjoying your corporate job also. At times I'm jealous of the sounds of certain aspects of the corporate pilot world but as in everything, each side of the fence has it advantages/disadvantages.

As for your comment below:

> I am just making the point that SWA is no longer this little cheap airline (like say a Frontier).

I agree 100%. We're currently the 2nd largest domestic carrier in the US, only slightly behind DAL. Analyst state we will be #1 within 18 months most likely.


>They are a major player that competes with AA in 70% of their markets, yet they are paying almost all their labor significantly less, and MORE IMPORTANT, their productivity is higher, which also translates to cheaper labor.

I agree. This is a huge advantage. My only question is why would the company, pilot union or other employees wish to give this advantage up? I don't personally or professionally believe pilots or any group of employees have a responsibility to "other" groups in other airlines to meet preconceived ideas of pay or benefits.
At one point AAL & other carriers have tried to put us out of business. No one stood up for us & tried to help us out & they shouldn't have. If we couldn't make it on our own during a highly competitive market then so be it....those are the rules of capitalism.
I do believe we owe other groups at other carriers our honesty & integrity in dealing with them. If our pay is raised with the approval of this extension (I believe it will pass), we will still be the most productive folks around, not as much as before (since our costs will rise) but still well below the other airlines. Our internal studies show that even if we were paid industry average wages the inefficiencies in the other airlines would still result in our beating the competition. Not trying to brag about it & obviously its all up for debate.

>So I guess, we stand at a junction....all of the others go "Walmart" (as Don Carty called it) and we see wages erode, or SWA steps up as a true "Major" and starts to pay "Major" wages.

True "major" wages? That is difficult to determine. Merely looking at pay charts & trying comparisons isn't the entire picture. Yes the charts are the standards used in the past but how do you take into account 1st, 2nd yr FO rates for UAL, DAL, AA, NWA who are furloughed. They aren't getting paid anything but our FOs are. How is that comparison made? Are SWA pilots worth industry average pay (IAP) yes. Will we receive it? Yes but the key question is again, what is industry average? Wages are regressing right now at some majors so that figure is difficult to determine. We're in the process of negotiating new raises so we'll be closer in a few months than we are now.

>Profit share is not enough.

Why shouldn't profit sharing be included? I received an additional 13.6% last year in additional benefits/money because of that. Why does the "Pay" issue have to be "hard pay"? Airlines that think outside the box in awarding employees income should be able to reap the benefits of the system.

>Anyway, I don't fault anyone for working there, it is a **CENSORED****CENSORED****CENSORED****CENSORED** secure job, and that says volumes during these trying times.

Very true. This can't be stressed enough as there are many folks who read this board who have been furloughed. A survey of them (not currently employed pilots) to see which priorities are most important to them, higher wages or job security...would be most enlightning. I would suspect they would say they would rather have SWA wages vs. IAP if it meant they could have a job right now. Not sure obviously but again up for debate.

>I have always been into the idea of raising the bar, kind of like UAL and DAL did in their last contracts,

I understand the thesis but don't believe it is valid in the day & age of deregulation. If the objective for the unions is to receive the highest pay regardless of the impact on the company profit margin then the result has contributed to what we have today, airlines going bankrupt. Its not the sole reason but when labor costs make up 40% of most major airlines bottom line it is a MAJOR factor. My concern as a pilot is to provide for my family within my means & then support the union/company as they move toward a reasonable compensation package. The unions appear to finally realize this as many (UAL, USAir, DAL) have altered their current pay structure to help their companies. Why did it take this crisis to do that? SWA pilots have been doing it for years but are condemmed for it but now that other airlines are taking concessions no one thinks that is bad!!! One would think it is only OK to lower wages after the company is nearly bankrupt. That logic doesn't work but I understand completely the dynamics of it.

>unfortunately UAL can't compete with DAL and their swarms of RJ's, nor can either of them compete with CAL with their 50% reduced wages...so this is the dynamic we have today. And none of them can compete with SWA with their high labor productivity and low cost "structure" ----- i.e. labor costs.

One has to ask oneself why they can't compete? Inefficient management decisions resulting in diversification off their primary objective is a key component. Many other factors obviously, hub & spoke, too many aircraft types, hedging programs, etc. So should SWA pilots ask for higher wages to "help" our brothers at other airlines or merely to get higher wages for our families? I believe we should negotiate fairly & aggressively to get wages that both the company & union feel are fairly based on the continued success of the company. If other airlines can't compete with us I'm not sympthetic to the notion SWA should level the playing field to allow "fair & equal" competition. Sounds like socialism to me.

Very long & wordy, not normally the place to debate & I won't continue the thread myself because this board is too useful for other purposes. Thanks for the time to debate. Good luck in your future aviation career.
 
??????

Wasn't the title of this post "SWA 2Q financial report", not "let's get yet another bickering session going"
 
You're not alone

V70T5,

Just wanted to let you know that your opinion is widely held. Don't let the SW guys (or coolaide drinking poolies) that hang out on this board gang up on you. It seems anyone who dares mention that SW employees are underpaid or that working for SW is not necessarily a Nirvana gets attacked. I have a lot of friends at SW and not all of them see the world as wonderfully as those on this board.

Let's keep the big picture here. Bottom line is SW guys work harder and make less and that is why SW is profitable. Chase sounds like a reasonable guy, and he is correct that the consumer decides what they will pay for a fare. After all, why would anyone pay 150 bucks on UAL to get across the country when they can pay 89 on SW. You can't even drive a car and compete with the fares that are out there right now. Fares are selling at a 15-year low and - because of the narrow margins that airlines work on - it doesn't take a lot to lose money.

If you like to work harder for less by convicing yourself that you will be "happier" in your job, that is your prerogative. News flash: not everyone is miserable at other airlines. But realize that many in this industry see SW pilot wages as lowering the bar for all of us as professional airline pilots. (For the record, I'm not furloughed and don't work for one of SW's competitors). I'll now climb into my fox hole for the incoming barrage....

Regards, WG
 
Wise Guy,

No need to crawl into a foxhole...you simply pointed out the essence of what makes Southwest Airlines unique.

Personally, I'd rather be working with a group of happy people...even if it's a few bucks less than others...if this means I can keep my job when others may not.

This is a changing world and I'd say we're in the middle of a changing airline industry.

$102 million 2Q profit....smells like roses.
 
okay...Wise Guy

I applied at SWA three years ago because I wanted job security. I figured (looking back 30 years) that I could make a comfortable living, and would have the best chance of NOT getting furloughed. It's worked out so far, and no one is bullet proof, but I didn't come here to lower the bar on wages for the rest of the industry. In fact, I didn't even think about it. Guess I owe you an apology, huh? NOT!
 

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