The Perfect STORM: Oil Gets Above $49 - Not Good....

[HA25]

About LCCs/hedges: Anyone know how LONG they (JB, SWA) are hedged for? A hedge, like a stock option, is only good for so long. Sure, you can buy multiple hedge contracts at expiration dates years in advance, but you can only do so for so long (and it only makes financial sense to hedge for so long - a longer term contract introduces higher volatility, and therefore a greater price to buy the contract).

The point of my question: if fuel stays high, it will catch up with LCCs. Does that mean SWA & JB start going for concessions? Does it mean they (and therefore the majors) finally raise fares? Even as a consumer (not an airline pilot) I would hope for the latter.

Fuel costs area already killing SWA's profits... Hedges are temporary like you said.

As for $80,000 drug sales reps.... that's just the bottom of the wage scale. An HS friend of mine living in Dallas with a BA in Biology works for Bristol Meyers and makes over $130,000!

 

[canyonblue]

Special gov't privledge at LGA to multiple LCC's.

You forgot the special Government privilege to SWA at Love Field.

 

[LAZYB]

The Southwest Wing

As for Southwest Airlines, we are more than 80
percent hedged for 2004, a tactic that is expected
to result in offsetting savings of roughly $350
million at current market prices. In addition, we
are approximately 80 percent hedged for 2005. In
the first quarter of 2004, Southwest claimed $63
million in “hedging gains.” Had we not hedged,
we would have failed to report a profit in the first
quarter and, instead, would have realized a net
loss of $8 million.

- AND -

The Company utilizes financial derivative instruments for both short-term and long-term time frames when it appears the Company can take advantage of market conditions. The Company currently has a mixture of purchased call options, collar structures, and fixed price swap agreements in place to hedge over 80 percent of its remaining 2004 total anticipated jet fuel requirements that effectively cap crude oil-equivalent prices under $24 per barrel. The Company is also 80 percent hedged for 2005 with prices capped at approximately $25 per barrel, and approximately 45 percent hedged for 2006 with prices capped at approximately $28 per barrel. As of June 30, 2004, the majority of the Company's remaining 2004 hedges are effectively heating oil-based. Beyond 2004, the majority of the hedge positions are crude oil-based.

 

[miles otoole]

Fuel costs area already killing SWA's profits... Hedges are temporary like you said.

As for $80,000 drug sales reps.... that's just the bottom of the wage scale. An HS friend of mine living in Dallas with a BA in Biology works for Bristol Meyers and makes over $130,000!

WN has most of its fuel hedged through 2005. Not sure where you get they are killing profits. 80 K-bottom of wage scale? Don't think so.

 

[rgd]

80,000 dollars a year is not the low end for a drug rep. 45k to 55k is a good beginning salary for a primary care drug rep. 80k is going to be seen be a hospital or specialty rep. Now, as far as total compensation goes, you do have to throw in the fact they the drug companies pay you a car allowance or provide you with a car and insurance. You also get bonused anywhere from 15k to 40k a year IF you meet your sales goals on top of your salary. If you are in the top 10% of sales in your company, you usually win a nice trip for a week to Cabo, Carribean, Hawaii, etc...The biggest problem I see most pilots would have in this profession is that most do not have the skill set (outgoing, personable, sales experience, proven track record of success in sales, previous pharma experience and so on) to be competitive in the job market. As far as a rep shortage, that is about as likely as a pilot shortage. People are cheap now and you can throw a rock and hit 5 good ones that need a sales job and are experienced. If you wondering how I know this, I own two medical companies and have a sales force of 12 people, 3 of which are former pharma reps that couldn't find a new pharma position. Also, my wife has been a speciality rep in the pharma industry for 8 years, (at one time at Squibb). I don't mean to stomp on your idea, by all means its a great job and great benefits and the best schedule you could imagine, so I would definitely encourage you to try to get into the industry if you can. I often tell my pharma friends that they have the life now that pilots use to.

 

[jetblue320]

Dude, get off your LCC high horse! Half the **CENSORED****CENSORED****CENSORED****CENSORED**en reason this industry and namely our profession is suffering so bad is because assholes like you take jobs at carriers that pay 1/2 the wages of the so called "legacy" airlines.

Lets see how your fuel hedge does if JB were paying you pre-concession UAL rates on that Bus??

Why don't you get off your drugs? If you had a brain, you wouldn't make stupid statements like that. And FWIW, my pay is a LOT more than half of a legacy airline.

This industry is "suffering" because of greedy, spineless pricks like you.

Try not to be so bitter.

 

[Ty Webb]

There are some good points raised here, but so far, no one has pointed out that the price isn't just determined by LCC's, it is also a function of capacity.

As an example, Delta flys six flights a day from from PNS to ATL and charges $500. R/T. AirTran comes in with 3 717 flights a day at $258. Delta matches the fare, and adds three more flights a day, in an attempt to "keep marketshare". AirTran lowers the rate to $218. Delta matches. AirTran makes a little money, Delta loses a lot of money.

Now, what would have happened if Delta hadn't put three additional flights in there (at a loss)? AirTran's flights would be full, they would raise the price, Delta would raise the price, and eventually, Delta and AirTran would BOTH be flying pax at a price that they could each make money at.

In other words, there are two factors at work here. The LCC may set a lower price, but the Legacy's response of adding capacity keeps the price low.

Also, LCC's do go to smaller communities. AirTran goes to Bloomington IL, Moline IL, Gulfport MS, Akron OH, Myrtle Beach, etc. Pick up a copy of SWA's schedule, and look at some of the places they go to. ATA has service to places you probably couldn;t even find on a map without a couple of hints. Not every town will have air service, unless they are willing to pay for it. Otherwise, they can drive an hour or so to the "big city". That's just part of living in the sticks.

FWIW, AirTran is comfortably hedged as well. It's in the quarterly statement, at around $1.05 or $1.10 / gal. Fuel hedging is covered in the 10-Q report of each airline, if anyone wants to look them up.

 

[Patriot328]

Gov't then FORCES UAL/AA to give up slots at ORD, only to then be filled in by FLYI......more RJ's to ORD.

bullsh*t. ORD isn't a slot airport. ACA went from 140-ish flights a day to 12. 92% reduction. If you are saying flyI's 12 flights a day are the crux of ORD's woes, you're nuts.

 

[drag]

Never said FLYI's 12 flights a day are the crux of ORD's woes. What I said was that the gov't forces AA/UA to give up time slots. This was to ease conjestion. These time vacancies are then filled by another carrier. Now that's B/S....and a fact. As my memory serves me, I don't recall ACA ever serving ORD. I do know that ACA was contracted out to be feeder for UAL. I may be wrong, perhaps you can tell me when ACA began serving ORD. What gate did they use? Also, where was their ticket counter? Thanks for the info.

 

[Patriot328]

As my memory serves me, I don't recall ACA ever serving ORD. I do know that ACA was contracted out to be feeder for UAL. I may be wrong, perhaps you can tell me when ACA began serving ORD. What gate did they use? Also, where was their ticket counter? Thanks for the info.

FAA went by operating certificates.. ACA's been there for years.

 

[HA25]

Why don't you get off your drugs? If you had a brain, you wouldn't make stupid statements like that. And FWIW, my pay is a LOT more than half of a legacy airline.

This industry is "suffering" because of greedy, spineless pricks like you.

Try not to be so bitter.

Sorry pal, but I don't buy it.... while DALPA is holding the bar up as long as they can and keeping work rules and scope at bay, NWA and AMR trying to do the same, you guys are eating their corporate lunch with your scab like wages and workrules (read pilot productivity)... and don't give me this profit share bull**CENSORED****CENSORED****CENSORED****CENSORED** since most JB pilots didn't get the fancy stock options the first few did... let's see what happens when the economy turns around, are you gonna raise the bar for the rest of us, or just help us race to the bottom...

 

[jetblue320]

Sorry pal, but I don't buy it.... while DALPA is holding the bar up as long as they can and keeping work rules and scope at bay, NWA and AMR trying to do the same, you guys are eating their corporate lunch with your scab like wages and workrules (read pilot productivity)... and don't give me this profit share bull**CENSORED****CENSORED****CENSORED****CENSORED** since most JB pilots didn't get the fancy stock options the first few did... let's see what happens when the economy turns around, are you gonna raise the bar for the rest of us, or just help us race to the bottom...

The stock options and profit sharing "bull" you refer to are two separate items and have nothing to do with each other.

I can see that you feel that productivity is a bad thing so I won't waste my time with that way of thinking. The economy affects all the airlines, some more than others. So I guess what you are saying is you need Jetblue (and others) to maintain "your" standard of living, is that right? How are a bunch of "scabs" gonna do that? And do you think for one second that the DALPA boys are in this mess they are in to maintain the profession to include Jetblue?

Get a grip on yourself.

Like I said many times already, you are just too bitter. But, try to have a good day anyway.

 

[skirt]

your scab like wages and workrules (read pilot productivity)... QUOTE]

Hmmm.... let me get this straight... As pilots we fly for a living. That means we get paid to fly, not paid to sit at home or sit in a lounge chair at the airport. Cracks me up that you think working is bad!

Maybe I can rephrase productivity so even you can understand. Productivity while working equals more days not working. I did a comparison before coming here. 15 days off at an "unproductive" legacy airline on narrowbody aircraft meant about 75-80 hours (with mid level seniority). 15 days off at JB usually means 85-90 hours (with mid level seniority). For example, this month I have 15 days off and 92 hours, with 8 months seniority. That extra 10 hours of pay for the same days of work very quickly erases any difference in pay, and then exceeds it. Remember, any flying over 70 hours at JetBlue is time and a half.

I would much rather fly while at "work" than sit around on 3 hour unpaid "productivity breaks" between banks at a hub.

Skirt

 

[HA25]

your scab like wages and workrules (read pilot productivity)... QUOTE]

Hmmm.... let me get this straight... As pilots we fly for a living. That means we get paid to fly, not paid to sit at home or sit in a lounge chair at the airport. Cracks me up that you think working is bad!

Maybe I can rephrase productivity so even you can understand. Productivity while working equals more days not working. I did a comparison before coming here. 15 days off at an "unproductive" legacy airline on narrowbody aircraft meant about 75-80 hours (with mid level seniority). 15 days off at JB usually means 85-90 hours (with mid level seniority). For example, this month I have 15 days off and 92 hours, with 8 months seniority. That extra 10 hours of pay for the same days of work very quickly erases any difference in pay, and then exceeds it. Remember, any flying over 70 hours at JetBlue is time and a half.

I would much rather fly while at "work" than sit around on 3 hour unpaid "productivity breaks" between banks at a hub.

Skirt

If you expect me to believe that the concessions taken at UAL,AA, and others are only causing guys to fly more hours with the same number of days off, you are smoking something you shouldn't be while working as a pilot. The FACT is quality of life at the "legacy" airlines is way down, pay is way down, and the airline industry is coming apart. Our profession is at an all time new low.... work rules and safety (rest) rules are under strong pressure all because you and our other fine LCC are whoring their employees in the name of $85 round trip tix from JFK to SFO...

no pal, you get a grip! ... JB320, so where's your pension plan? A and B fund?? Or is the only way you get some money at your retirement to whore your self out at substandard wages for 20 years? Where do you think JB's profits are going to go if ALL Legacy airlines turn into $85 LCC's? huh?

**CENSORED****CENSORED****CENSORED****CENSORED** right I'm bitter, so the **CENSORED****CENSORED****CENSORED****CENSORED** what?

I'm done with this useless conversation.

 

[Ty Webb]

The FACT is quality of life at the "legacy" airlines is way down, pay is way down, and the airline industry is coming apart. Our profession is at an all time new low.... work rules and safety (rest) rules are under strong pressure all because you and our other fine LCC are whoring their employees in the name of $85 round trip tix from JFK to SFO...

Spoken like a true idiot.

The reason that your legacy carriers are in such a mess is because of bad management and greedy unions. Blaming other pilots for working a other carriers is just wishful thinking.

Try to get your mind around this one, pal:

Your carrier is keeping MY wages low by dumping seats into the marketplace at a price that you can't make money at. How do you like that? And you are perpetuating it by voting in lower and lower pay rates to enable them to keep doing it for longer, thereby depressing MY wages . . . . friggin' legacy scab!



Heh-heh.