General Lee is correct. The Legacy carriers are retiring large amounts of pilots in the next few years. SWA is not. What is wrong with them leaving SWA and going over there??? Nothing is my answer.
right up to the point that they furlough again. It will happen. We are in an "up " cycle where they are going to start hiring like gangbusters. fog a mirror and your in. Then economy ********************s and guess what, you're on the street. Much like the "peak oil" guys. They will be back.
Ummmm, you guys might be the ones strolling into BK, you never know. The legacies do have some debt to take care of, and as Red likes to point out, Pension obligations. But, the legacies also have tremendous revenue generating potential, espcially due to fees. Delta's goal was to bring the debt down to $10 billion by the end of this year, down from $18 billion 3 or 4 years ago. That is a great feet in itself. Well, DL just announced it was going for $7 billion instead as a goal, an additional $3 billion. That is called amazing. There is also a $1 billion stock buy back and a dividend that is a first in awhile (yes, you guys also give dividends). That is called a turn around. Yes, I think the pilot contract could have been a bit better in hindsight, but as we always say "we'll getum next time!" We still got a great raise for a 3 year contract. The pension obligations are expensive too, but like a mortgage payment, you just have to keep plugging away, and DL actually made a larger payment last quarter than was needed. They understand the obligation, and even getting the debt down to manageable levels, the interest payments per year drop $500 million, which can inturn help fund the pensions. Amazing.
Again, the difference these days is FEES. Back during the BKs of the last decade, FEES were not significant. Now, they are almost commonplace, even at your subsidiary Airtran, which SWA benefits.... That plus consolidation has really changed the game, making legacies stronger. Forward thinking, like buying a refinery, brings a twist that people are watching, with many analysts loving the idea of controlling your costs of your biggest expense (gas). Then there are "J.R. Ewing" wannabees like Red that think it was crazy. We'll see eventually, but at least management is making proactive stabs at their highest cost, and taking out the middleman.
So, don't think cycles will always come back the same way. A lot has changed in this up cycle (fees and consolidation), and it may soften the next down cycle for all of us. Even during this last recession over the last couple years, the Legacies have all made profits. That should say something right there. And, taking airlines to BK to extract costs and then expecting an Exit Bonus upon leaving BK just may not ever happen again. Look at Horton at AA, and how the BK judge and the DOJ have stated NO to the big bonus. All airline management teams have taken notice. Bonuses come from profit sharing, not BKs.
Bye Bye----General Lee
