SWA transition bid needs to be reopened!

[BR715]

GK's comments about the 717 in the WSJ have changed things dramatically. The 717 seems like it will be leaving real soon with furloughs coming that will be out of proper seniority order. I know those of us that elected to stay on the 717 took a chance, but the pilots have not begun to transition.

 

[On Your Six]

What were his comments in the WSJ?? Can someone please repost? Thanks.

Godspeed!!


The OYSter

 

[DieselDragRacer]

With fuel prices on the march again, Southwest Airlines Co. is taking a pause after a 41-year expansion that has taken it to the brink of the global industry's top 10 by traffic.

A year ago, the airline and its rivals faced the worrisome prospect of jet fuel rising to $3.30 a gallon, but the industry successfully managed to pass on most of the increases through higher fares.

"We prepared for $3.30, and now we're going to have to be prepared for $3.50," said Chief Executive Gary Kelly in an interview in Chicago, where he was attending an employee event at what is now the airline's busiest market.

Southwest is keeping its aircraft fleet flat at around 700 planes until it reaches its investment-return target of 15%, though it will boost capacity by introducing larger planes and adding extra seats on existing aircraft.

While demand remains robust, Mr. Kelly concedes that Southwest will have to look at "schedule adjustments" if it fails to secure cost savings and push through higher fares to counter fuel costs.

The fuel challenge comes as Mr. Kelly continues to assimilate discounter AirTran Airways and face off against larger legacy airlines that restructured and then merged. The AirTran deal boosted Southwest's scale by around 20% in one swoop, and also gave it access for the first time to international markets.

Southwest has been limited to domestic routes because of an outdated reservations system that Mr. Kelly says it is still "years away" from replacing, as well as union contracts that kept it focused on the Lower 48 states.

Meanwhile, new rivals such as JetBlue Airways Corp. and Spirit Airlines Inc. have grown quickly into markets from the U.S. to Mexico and the Caribbean.

But Mr. Kelly seems unhurried about shifting his focus from domestic routes, where he sees potential to add "hundreds of planes"—though not as many as 500—before it runs out of growth opportunities in the Lower 48. Services to Hawaii, Alaska, Canada, Mexico and the Caribbean are all seen as on the horizon, but Mr. Kelly views the core domestic market as far from saturated.

The big prize from AirTran was access to Atlanta, the busiest airport in the U.S., and it is also expanding its presence in the New York area, and eyeing further expansion in Washington, D.C.

AirTran, which Southwest acquired last May, is expected to generate $400 million to $500 million in revenue synergies, with much of that sum coming from the smaller carrier's extensive network out of Atlanta. Mr. Kelly said the deal is adding 22 cities to the 72 that Southwest already serves and is moving the strictly domestic airline into some overseas destinations in Mexico and the Caribbean.

It is one of several strategic cards in hand that Mr. Kelly hopes will boost revenue by nearly $500 million over the next few years.

In April, the first of 100 larger, more fuel-efficient Boeing Co. 737-800s will arrive, and Southwest is also the launch customer for the revamped Max version of the airplane, part of a $19 billion order announced last December.

The Max jets are due to start arriving in 2017, and though Boeing and rival Airbus have seen recent new aircraft programs running several years late, Mr. Kelly believes the U.S. company may even come in ahead of time after learning from past mistakes.

Beyond that, Mr. Kelly said, Southwest will have opportunities to grow from Dallas Love Field in 2014 upon the expiration of a federal law that limited the carrier to serving only Texas and eight nearby states nonstop with flights from its home airport.

Mr. Kelly said the company also has many opportunities to improve its labor productivity, although many of those potential changes would need to take place within the confines of union labor negotiations.

One piece of AirTran he wants to jettison is that airline's 88 smaller Boeing 717 planes.

"We tried to look for a purpose for the 717s that was different than for the 737s," Mr. Kelly said. "We couldn't find one."

But AirTran's leases on those planes don't begin expiring until 2017 and run to 2024. So Southwest has reached agreement with Boeing—from whom it leases the aircraft—to try to place the planes elsewhere.

"If we can't find a home for them, we'll fly them and pay for them, or not fly them and pay for them," he said.

Write to Susan Carey at [email protected] and Doug Cameron at [email protected]

 

[On Your Six]

Wow. I know DL has looked into flying those. That would be a good DC9 replacement at the right price from Boeing. Good luck to everyone involved. Hopefully you can get enough used 737s to replace those quickly.


Godspeed!


The OYSter

 

[SWAdude]

No furloughs. No concessions. Only a phase out of an acquired, unneeded aircraft type with new deliveries as its replacement. GK is wisely negotiating with Boeing in public to get the best deal possible.

The company well knows that the pilots are 20 to 30 percent more productive than its immediate competitors with its pilots and similarly with its FAs. I know that all the SWA unions have productivity advantages verses the Legacy carriers. GK's remarks are typical for any CEO trying to control costs with their unions. There truly is not more to squeeze out of the entire companies level of productivity. Herb use to say the same.

 

[General Lee]

I have read that we are already considering putting all glass cockpits in the existing MD88/90s, and that could be an insight to trying to create a category with identical cockpits with the 717. Rumor has it we already had people look into a common type with current cockpits, and the FAA wouldn't sign off on it. Putting new cockpits in those 88/90s could help.


Bye Bye---General Lee

 

[scoreboardII]

GK's comments about the 717 in the WSJ have changed things dramatically.

They haven't changed a thing, those same comments were made before the bid.

Section 6 starts soon, it will be doom and gloom, "we need 20% cut in 717 rates of pay or will need to furlough, blah, blah, blah."

Be mindful this company has never furloughed, GK would be seen as a huge failure if he let that happen.

Fo GK to pay the leases and not fly them would also be a huge failure on his part for poor decision making in buying AT.

He's going to fly them and get every once of revenue before the lease expire.

Let the games begin.

 

[XR650R]

Furthermore, we still have a bunch of Classics that are WAY beyond their shelf life. I have a hard time believing a single 717 would leave before the last Classic leaves, unless there is some sort of A/C swap with Delta.

 

[texman]

BR715,

No one is going to get furloughed, if push comes to shove you will see the Spirit of the employee group. This company will battle till the option is exhausted. This means the AT side to. The 717 has been a fuel hog with these prices and GK knew this. We spent 22 million on the fltops side to not furlough in 08. You are about to see why we have so much pride in taking care of our own that includes YOU GUYS too. Remember Swa is running AT not your old MGT. Why stay on the 717 come over to the light bro.

Plus we have the lowest focasm on the 800 than any airline. This will fuel growth so the quicker we get them the better off.

 

[redflyer65]

no furloughs. No concessions. Only a phase out of an acquired, unneeded aircraft type with new deliveries as its replacement. Gk is wisely negotiating with boeing in public to get the best deal possible.

The company well knows that the pilots are 20 to 30 percent more productive than its immediate competitors with its pilots and similarly with its fas. I know that all the swa unions have productivity advantages verses the legacy carriers. Gk's remarks are typical for any ceo trying to control costs with their unions. There truly is not more to squeeze out of the entire companies level of productivity. Herb use to say the same.

bingo.