SWA contract amendable- no pay raise?

[ivauir]

If SWA keeps the status-quo and the fuel hedges run out, their cost of operation will be almost exactly what the average legacy carrier is at give or take +- 0.5 cents per mile. .

False

 

[Dangerkitty]

If SWA keeps the status-quo and the fuel hedges run out, their cost of operation will be almost exactly what the average legacy carrier is at give or take +- 0.5 cents per mile.

Do some better research dude. You couldn't be anymore wrong.

 

[YourPilotFriend]

Do some better research dude. You couldn't be anymore wrong.

Show me the mathematical data that supports your claim. It's wrong because you're not factoring in retirements, buy-outs, and possible mergers. SWA has about a 2.50 cents per mile advantage over the other airlines. That number will be squeezed to 0.70 cents after fuel hedges run out. The additional savings on what I have stated above will reduce that number to possibly even lower than the operational costs of SWA. But by all means though, show me where I'm adding these numbers wrong.

 

[satpak77]

I will add that while SWA's costs may not "be the same as a legacies" while the fuel hedges run out, their costs WILL go up.

The legacies have a HUGE number of people retired, with associated medical benefits, pension issues, etc. SWA does not.

However, we know SWA started in 1971 but really didn't expand until approx 1978ish. It had another expansion year in 1985ish. (Then of course things really went well for SWA to include all the way until now - CONGRATS guys).

Using Kit Darbys official airline pilot hire age of 28, that means the guys hired in 1978 are now 56, and the guys hired in the mid 80s are now 49.

So, in the next 10 year period or so, SWA will see quite a few retirements and associated costs with that. But they do not have the "problem" of DAL, UAL, AA, etc, with thousands and thousands of retired pilots, gate agents, accountants, etc etc. Note that JetBlue does not have this problem either.

Obviously SWA's management is aware of this, and will run the company accordingly.

To say their cost structure will be the "same as" the legacies when the hedges run out, is incorrect. Also incorrect is to say that Southwest's expenses will never increase. They will.

 

[Dangerkitty]

Show me the mathematical data that supports your claim. It's wrong because you're not factoring in retirements, buy-outs, and possible mergers. SWA has about a 2.50 cents per mile advantage over the other airlines. That number will be squeezed to 0.70 cents after fuel hedges run out. The additional savings on what I have stated above will reduce that number to possibly even lower than the operational costs of SWA. But by all means though, show me where I'm adding these numbers wrong.

Show me the mathematical data that supports your claims. You are the one making the assertations. Not me.

However, what you fail to point out is that the legacies in bankrupty (and the ones that just exited) do not factor in their debt payments when it comes to the cost of their operation. Their cost per seat mile maybe have become lower but when you factor in the cost of going into bankruptcy not factored into your cost per seat mile you are really not getting an accurate picture.

And even though AA has not gone into bankruptcy they are still $20 billion in the hole. From here on out they will have to produce a $1 Billion dollar operating profit per year just to pay off their debt. Something they have only been able to do on a handful of occasions. That is also not shown in their cost per seat mile.

Add to that that these legacies virtually own nothing and are mortgaged to the hilt and you see that the picture is not to rosy at any of them. Lowered costs or not.

On the flip side SWA owns virtually all its aircraft and is paying for new ones IN CASH. When their profit shrinks the profit sharing shrinks as well which actually lowers their costs. They just reported their best quarter on record and still would have made a bundle in cash even without the fuel hedges

The only carrier that can get close to SWA in terms of operating costs is Airtran. Anyway you look at it the others carriers are still having a tough time slashing costs to compete with SWA.

 

[SWA/FO]

75 employees per airplane! Lean and mean, baby!!!

 

[Flycatcher99]

So, in the next 10 year period or so, SWA will see quite a few retirements and associated costs with that. But they do not have the "problem" of DAL, UAL, AA, etc, with thousands and thousands of retired pilots, gate agents, accountants, etc etc. Note that JetBlue does not have this problem either.

Obviously SWA's management is aware of this, and will run the company accordingly.

SWA doesn't have pensions. 401k, profit sharing accounts, and stock options. Thus, SWA will not have the financial liabilities carried by the "legacy carriers" for their retired pilots, et al.

Seems mgmt already was aware, and has already run the company accordingly. Hmph. How about that.

 

[YourPilotFriend]

75 employees per airplane! Lean and mean, baby!!!

Your CASM is the lowest of the industry in the US at 8.05 cents, but lean and mean is ryanair at 4.8 cents per mile.

 

[satpak77]

SWA doesn't have pensions. 401k, profit sharing accounts, and stock options. Thus, SWA will not have the financial liabilities carried by the "legacy carriers" for their retired pilots, et al.

Seems mgmt already was aware, and has already run the company accordingly. Hmph. How about that.

Correct, I am aware of that. However I think retiree medical costs would come into play at some point.

 

[Dangerkitty]

Your CASM is the lowest of the industry in the US at 8.05 cents, but lean and mean is ryanair at 4.8 cents per mile.

I dont know where you get your information, but you are totally and completely wrong once again.

Ryainair's CASM's are no where near 4.8 cents. Last I saw they were .057 Euro's which equates to 7.3 Cents per mile. Either you are a flat out liar or you can't seem to grasp the concept of simple research.

It aint that tough getting this information.