US Airways Troubles, Whats The Real Source?

[DenverDude2002]

So Im reading all the info about US Airways, and Im wondering what the real cause of all their troubles is. Are the routes the fly profitable or is it just so far mis managed and the cost structure so far off that they cant pull a profit even though the routes are bringing in income? Or is it just the routes they fly dont really have that much demand? Also how did they get into a 2nd chapter 11? I thought there was a law prohibiting that unless 7 years had passed.

 

[ATR-DRIVR]

The reason is your standard 'troubled airline' answer, MANAGEMENT. Acutally, the serious lack of.

 

[Publishers]

simple

Now see ==that was simple.

 

[DrRaptor]

It's mainly their managment, but the pay scale doesn't help when their first year 737 FO's are getting paid more than double what a first year UAL 737 FO is, and nearly 2/3 more than what the Continental FO's are getting.

Everyone (from the ramp to the top management) needed to take pay cuts to help fix the money flow problems, and no one did, so this is where US Air is (again...for the 3rd time).

 

[350DRIVER]

1) Lack of a west coast route structure

2) Too many different equipment types

3) Management

4) Costs

5) Bad business plan(s)

6) Gas prices

7) Hub structure

In addition to the above, the invasion of the "greyhound" into PHL aka Southworst hasn't helped matters either. Wolfe promised Pittsburgh everything but the kitchen sink, bad management has caused more problems than anything.

It will be interesting to see how FLL will be used as a "focus city" to compete against AA out of MIA. It is going to take a miracle at best for them to get this ship headed into the right direction.

Don't count them out yet, I truly don't think the fat lady has yet begun to sing yet. Never forget the name "Branson", you may be hearing a lot more of him should things continue to go more south...

3 5 0

 

[LarryinTN]

It's mainly their managment, but the pay scale doesn't help when their first year 737 FO's are getting paid more than double what a first year UAL 737 FO is, and nearly 2/3 more than what the Continental FO's are getting.

Have you looked at their payscales lately?

http://airlinepilotpay.com/
http://www.airlinepilot

 

[atrdriver]

the pay scale doesn't help when their first year 737 FO's are getting paid more than double what a first year UAL 737 FO is, and nearly 2/3 more than what the Continental FO's are getting.

Just how long do you think it's been since US Air had a first year FO? Seeing that their junior man has been there something like 16 years....

atrdriver

 

[MW44]

Yeah I heard from a real good source who is close to top managment at Us Airways that the first year 737 pilot payscale has just been killing them. Absolutely bleeding them dry. United and Continental have had a huge advantage since 9/11 because they've been paying their newhire pilots a whole lot less than Airways. I think the Usa Today is going to break this story real soon...

 

[KeroseneSnorter]

It's mainly their managment, but the pay scale doesn't help when their first year 737 FO's are getting paid more than double what a first year UAL 737 FO is, and nearly 2/3 more than what the Continental FO's are getting.

Everyone (from the ramp to the top management) needed to take pay cuts to help fix the money flow problems, and no one did, so this is where US Air is (again...for the 3rd time).

Dr,

You should really at least have a small clue as to what you are talking about before you post.

As it stands you just look like an idiot.

 

[I.P. Freley]

You should really at least have a small clue as to what you are talking about before you post.

Well he DOES have a point, one that I've made before... Not a single FO at USAirways is making under $100/hr. Compare that to what a 5yr FO at Continental is making, by comparison:

USAirways 12-yr scales range from $104-133/hr.

Continental 5-yr scales range from $88-115/hr... And with the jr. cap's at Continental having 7yrs seniority, that makes for a fairly senior FO.

That's not an insignificant difference, though I hardly expect THAT is what is keeping USAirways down.

To answer the original question, what is the REAL source of USAirways' woes?

Obviously, it's the pilots' pay scales.

 

[KeroseneSnorter]

Well he DOES have a point, one that I've made before... Not a single FO at USAirways is making under $100/hr. Compare that to what a 5yr FO at Continental is making, by comparison:

USAirways 12-yr scales range from $104-133/hr.

Continental 5-yr scales range from $88-115/hr... And with the jr. cap's at Continental having 7yrs seniority, that makes for a fairly senior FO.

That's not an insignificant difference, though I hardly expect THAT is what is keeping USAirways down.

To answer the original question, what is the REAL source of USAirways' woes?

Obviously, it's the pilots' pay scales.

If that is what he wanted to say, that is fine. However that is not what he said.

 

[Publishers]

What

What it is -- all of above,,,,,

Sometimes the pay scales are merely reflective of many problems. Inefficiency and lack of productivity for the buck.

It usually would mean that all the labor groups may well be overpaid relative to the productivity and that would take the company down.

 

[DrRaptor]

If that is what he wanted to say, that is fine. However that is not what he said.

And what makes you an expert on what I said?

I said (and I'll re-iterate this)

Primary Problem -

Management

Secondary Problem -

NO ONE WILLING TO TAKE A PAY CUT

I didn't single out just the Pilots. I said that the FA's, Ramp/Gate Agents, Managers, EVERYONE should have taken pay cuts VOLUNTARILY, but no one did. So that made a bad situation worse.

Next time, read what's posted, and check your OWN information before coming out and calling me an idiot when I'm sitting there looking at the numbers on AirlinePilotPay.com and seeing that the US Air guys are getting a disproportionately higher pay scale than their counterparts at LARGER airlines.

 

[350DRIVER]

The "pilot pay" issue is not the main reason why Airways is in this situation that they are in present day my friend, it is merely only a minor variable in the a much larger equation. Even with the " " FA's, Ramp/Gate Agents, Managers, EVERYONE should have taken pay cuts VOLUNTARILY " " thing would not have been the answer, not even close. . . The problem goes much much deeper than this and I think that is why no group was willing to give it all up.

As I previously stated in my first response to this thread the major problems are as follows, lack of a west coast route structure, too many different equipment types, p!ss poor choices by management, bad business plan(s)/platform, gas prices, hub structure, etc. This whole "this group/that group should have taken the cuts, blah, blah, blah, is complete BS. That is only the tip of the iceberg and it doesn't take some airline analyst to come to this conclusion. Work rules, hours per month, etc, etc, also must be figured into this equation so don't place blame on those people who you have never walked a day or even an hour in their shoes. You can monday morning qb this issue until hell freezes over, it has no bearing on the reality of this matter.

Primary Problem -

Management

agree, solution is what?. That is the million dollar question. . Many changes are going to have to take place if Airways is to be around a year from now.


One thing is for certain is that the WO's must do all the regional flying which you are starting to see now and ALL flying should be shifted not just some. This is insane in more ways than one, use your "own" resources as well as a little bit of common sense when "outsourcing" the flying. .



3 5 0

 

[LarryinTN]

NO ONE WILLING TO TAKE A PAY CUT

They already have taken pay cuts!

 

[350DRIVER]

They already have taken pay cuts!

You are correct..

It didn't work the first time and it would not have solved the "bigger" problems or worked the second time around.

3 5 0

 

[I.P. Freley]

If I'm not mistaken, the pilots have already taken TWO pay cuts.

 

[I.P. Freley]

One thing is for certain is that the WO's must do all the regional flying which you are starting to see now and ALL flying should be shifted not just some. This is insane in more ways than one, use your "own" resources as well as a little bit of common sense when "outsourcing" the flying.

Certain? I think not. What if the "outsourced" flying costs the company less than doing it in-house? Don't you think this is why they've been doing it all along?

 

[350DRIVER]

I.P. Freley,

One, two, three, four, or five paycuts, does it really matter at this point?. It obviously didn't work the first two times around and it surely wouldn't have solved the much bigger problems that exist present day even if they were to give in once again to cuts. Are you advocating that they would have avoided another 11 filing and would have become profitable and successful overnight if the cuts were agreed upon?. This argument is getting comical to say the least, the sad part is thousands of jobs are in limbo. The pay cuts are not the "miracle" answer to the solution only one of many many variables to consider.

It would seem to defy logical reasoning to say that IF they would have taken another cut this time around then all would be fine and dandy in paradise. Once again Airways problem(s) extends much deeper than this.

Certain? I think not. What if the "outsourced" flying costs the company less than doing it in-house? Don't you think this is why they've been doing it all along?

I assume you are a Shuttle America pilot?. If so then I can understand where you are coming from since Airways cut Shuttle out of the picture. PSA and PDT are not there to just be called "WO's", they should be the ones doing the flying and that is the shift that you are seeing and will continue to see. I don't know the exact $$ amounts between using a D8 versus a S-340 on given routes but I don't think you are going to see that much of a cost difference. . Correct me if I am wrong but PDT and PSA are in existence to feed Airways?.

Why have they been doing it all along? Why is Airways back in 11? Why are they in the shape that they are in present day?

I can think of many questions but the bottom line is that many things must change if Airways is to live to fight another year and obviously this plan that has been in place surely is not working at all.

just my worthless $.02

3 5 0

 

[DrRaptor]

They already have taken pay cuts!

When? The US Air pilot's I've talked to only talk about pay cuts prior to this last contract, and they only talk about reductions in FUTURE pay raises, not actual cuts in current pay.

Also, I agree that there's a lot more than just the pay and managment going on, but there are two things that keep an Airline in business-

Capital and People. If either is out of whack in any respect (the amount of capital, the amount of people, how much the people are getting paid, whether the capital is growing or shrinking, etc) you start to see problems. The #7 airline in the US can't afford to be paying their pool of pilots so much more than the #1 and #2 airline are paying their pilots that the yearly budget for pilot salary ends up being nearly as large at airlines bigger than it, even with the smaller total pilot pool. From the information I can gather, it looks to be that the #7 airline is the #4 or #5 in how much money per year they put out for pilot pay. I can't garuntee this since getting the exact numbers isn't easy for all the airlines, but it seems to be about right.

Yes, pay cuts aren't a miracle fix, but it's amazing how much pay cuts (across the board) frees up additional CAPITAL for things like debt payment and restructuring, equiment improvement, etc., and in aviation, Capital is everything when it comes to keeping an airline operating.

Also, the fact that US Airways has SPECIFICALLY requested that it be able to maintain it's frequent flyer program and its code share commitments, tells me that the situation isn't really dire or else they'd be trying to nullify EVERY program that costs them money and brings in no direct revenue.

 

[T-Gates]

You really need to do some research.....

Airways has taken cuts in HOURLY pay and future pay raises. It's been shown that the pilots could work for FREE and Airways would still be hemmoraging cash. U has furloughed so many pilots that everyone is in the top-tier of the payscale. i.e. 15 year 737 F/O's.... There is alot more to their problems than pilot pay.

 

[KeroseneSnorter]

And what makes you an expert on what I said?


NO ONE WILLING TO TAKE A PAY CUT



Next time, read what's posted, and check your OWN information before coming out and calling me an idiot when I'm sitting there looking at the numbers on AirlinePilotPay.com and seeing that the US Air guys are getting a disproportionately higher pay scale than their counterparts at LARGER airlines.

The pilots took 3 voluntary cuts prior to the latest. Twice after 9/11 and a B scale (Metrojet) prior to 9/11. (1998)

First year 737 F/o pay before any concessions was salary based, but worked out to $35 an hour.

There are no first year F/O's= Most junior pilot left on the property was hired in 1988

1875 on furlough- 140 + airplanes parked in desert, massive outsourcing of flying to the regionals.

Alter ego airline has been created (MDA) to facilitate pilot furloughs and outsourcing. Same airline, same 121 certificate, different contract, benefits and pay, pilots lost all senority. 16 year guy goes back to year one. (Not included in the concessions listed)

Pilot retirement has been stripped away.

Already retired pilots were left with almost nothing. Guys that had been retired for years lost almost everything.



But you are right, it must be those darn pilots, thats why U cannot make any money. Never mind that management is spending 20 mil per copy for ERJ's that have a CASM that is 14 cents higher than the ones parked in the desert, or that management is flying 3 RJ's on routes that used to be serviced by 1 mainline bird, but still only hauling the same number of passengers. Managment induced productivity problems, airplanes and crews sitting for hours between flights not producing revenue. Massive scheduling screwups, multible crews being called out for one flight, when the pilots point out the error, they say that the computer did it and there is nothing they can do (My personal favorite, I flew one of these for 3 months straight back in 2001. Two crews for one airplane to Tampa and back!) Or my other favorite, managment spent millions promoting a nonstop flight from MDW to BOS, when they finally got around to sending the info to flight operations it could not be flown with the airplane they scheduled!!!! The airplane could not carry enough passengers to break even and still have enough fuel to make the flight!!!!

I have not even touched on the misuse of airplanes, How about the use of a 737-200 to fly from LGA to FLL. A near fuel emergency when it left the ground, only to see them running a 737-400 on a 20 minute hop with two dry center fuel tanks and only half full in the wings. Or the brilliant use of a 767 a few years back to fly from CLT to GSP......an airplane designed to go nonstop to Rome or Madrid doing a 15 minute hop!! While at the same time using a DO-328 turboprop to run PIT to Birmingham...3.5 hours, running in near formation with a second one and still leaving passengers at the gate while DC-9's, F-100's and 737's run around empty from PIT to West Virginia or other silly short hop.

What makes me an expert on what you said? Well the paystubs in my desk drawer gives me a nice head start. Not an expert by far, but at least I do have an idea what is going on!

 

[DrRaptor]

You know what... it's pointless to continue when people continue to NOT READ what I said.

How many times do I have to say that the pay cuts were needed across the board and not just the pilots before you people get it through your thick skulls that I'm not singling out the pilots.

I feel for the guys who lost their retirement benefits, that's one thing I don't agree that should ever be up for negotiation or cancellation. Once you retire, you should get the package that was in place when you retired and that shouldn't be able to be messed with, no matter what happens. Even if the company goes under, its first responsibility should be to garunteeing the retirement program and making sure that somehow everyone who was depending on that retirement get what they'd been promised when they retired.

Also, I don't care about what was conceeded in the FUTURE, I think that's the biggest crock of a concession ever devised by Union Negotiators. Why? First because it doesn't help the company *NOW* (when the help is usually needed). It's also because these things usually have hidden catches that end up hurting the company immediately and during the time that those "pay cuts" occur during. It's kind of like the firefighter's union in Denver claiming that they'd made concessions to the city when they had a "rollback" of pay for the year and a "release" of vacation pay (i.e. taking vacation for free), but somehow managed to keep a 9% pay raise over the next 3 years intact after the whole thing that no one cared to talk about. Not to mention that they still had a 6% backpay for the next 2 years scheduled that was retained as well.

Again, I'll say this- the primary problem was and is the management of the company. The second part is the pay scales for EVERYONE, not just the pilots are out of whack. The company managment let them get out of hand at all levels and job classifications. The scales are out of whack to what the company should have, especially when you look at what upper management is getting paid. It all contributes.

On the issue of the planes- you need airplanes to keep the airline running, so a lot of times, spending money on that can't be helped. It's also a lot more cost effective in a year to have an ERJ flying 50 people than having an F-100 flying them like they are now. I know that the fleet utilization sucks at US Air, but then again, it tends to suck at a lot of other airlines too. I also seem to remember that US Air is FINANCING all those new planes through banks, and not buying them outright, so I think that saying that they're putting up the full price up front for an airplane is misleading since that money is only being put up over 20+ years, and not immediately. Come to think of it, I don't think any major US airline has bought an airplane in full from the manufacturer in DECADES. Everyone finances the airplanes because it helps keep that all important CAPITAL around.

 

[LarryinTN]

I'm not sure what it is that YOU don't understand but the employees of USAir are all earning much less than they earned a few years ago yet they are doing more work to earn it. Those are very real paycuts that have been showing up on their paychecks for several years now.

 

[KeroseneSnorter]

You know what... it's pointless to continue when people continue to NOT READ what I said.

How many times do I have to say that the pay cuts were needed across the board and not just the pilots before you people get it through your thick skulls that I'm not singling out the pilots.


Also, I don't care about what was conceeded in the FUTURE, I think that's the biggest crock of a concession ever devised by Union Negotiators.

Again, I'll say this- the primary problem was and is the management of the company. The second part is the pay scales for EVERYONE, not just the pilots are out of whack. The company managment let them get out of hand at all levels and job classifications. The scales are out of whack to what the company should have, especially when you look at what upper management is getting paid. It all contributes.

On the issue of the planes- you need airplanes to keep the airline running, so a lot of times, spending money on that can't be helped. It's also a lot more cost effective in a year to have an ERJ flying 50 people than having an F-100 flying them like they are now. I know that the fleet utilization sucks at US Air, but then again, it tends to suck at a lot of other airlines too. I also seem to remember that US Air is FINANCING all those new planes through banks, and not buying them outright, so I think that saying that they're putting up the full price up front for an airplane is misleading since that money is only being put up over 20+ years, and not immediately. Come to think of it, I don't think any major US airline has bought an airplane in full from the manufacturer in DECADES. Everyone finances the airplanes because it helps keep that all important CAPITAL around.

First off I think you are the one that needs to reread your first post. You have no clue as to what a first year F/O makes at USAirways but you ballihooed about pay rate this and that. That is the one I originally called you on.

Second, what part of pay cut do you not understand? Those previous 3 concessions were not for future cuts, they were very real the next month after the agreement was signed. I know, my next check reflected it VERY clearly!! One consession alone was to the tune of 500 million a year from the pilots alone! Do the math and it amounts to over 100k a year per pilot if you include the benefits lost. FIVE BILLION over the life of the contract. And that does not include the downgrades from Capt. to F/o. Many pilots lost 50% of their pay check (Not including benefits) almost instantly when the agreement went into effect since they were no longer Captains, and 1875 lost 100%

Third, The F-100 has been parked for 2 years now, the DC-9 three years, the 737-200 2.5 years. I was using them as examples of what got us in this mess. If you are not knowledgable enough to even know what kind of airplanes the airline flies, how do you have any idea what they are dealing with now?

Fourth, as to the RJ issue. 20 minutes or twenty years, it is still 20 million a copy for aircraft that are more costly to operate than the 120 or so rotting out in the desert, which by the way the company still owes money on many of them. Yes eventually those airplane in the desert will wear out and need replaced, but they all have at least 8 good years left in them, some much more. The 737-300's and F-100's parked could probably go for another 15. Heck some of the oldest nines were nearing 40 years old when they were put out to pasture. And several of NWA's DC-9's are that old and getting new paint and interiors and soldiering on! U could refurbish all of the 100's and 73's and put them back in service for less than what 1 new rj is costing them.

As to your financing comments......I hope you don't think that way in your personal finances. Well I'm broke and bleeding money so bad I can't make the house payment, but If I put this new plasma TV on my visa card its financed over a long time so its ok!!!!!!!!

 

[DrRaptor]

You know what, if you want to look at AirlinePlotPay.com and tell me that after doing the math on the UAL vs USA 1st year FO pay I'm not telling you the facts as they're available to the public, then I'll apologize, but I get approx. $27,000 for the UAL 737 FO and $56,000 for the USA 737 FO.

Also, I wasn't commenting on just your post. There was another that talked about USAir pilots conceeding future pay raises. That to me is a mute point when the reason that an airline goes into bankruptcy is because it has no money at that point. Not because it won't have money in 3 years, when the raises go into effect.

Again, I've read and re-read my posts, and none of the facts put forth are factually incorrect. When the management asked for pay cuts, no one gave them, including themselves. Whether or not you'd taken pay cuts in the past wasn't the issue. It was that more was asked for, and more wasn't given anywhere, so that only exacerbated the problem that already existed.

Also, I understand that the last F-100 has been put in the graveyard, but the economics are still the same if you replace an F-100 with an A319 of nearly the same age (considering that the last F-100s rolled off the line in the mid-1990s, that's not a long stretch). It is more economical to operate a full ERJ than it does to operate a half full A319. Now, going to the other extreme with flying 2 Do328s instead of 1 A319 is a bad move, but the fact still remains that sometimes it's necessary if the equipment isn't available. I remember having to load a pair of CRJs for ZW going to BNA in a last minute change when UAL's 737 broke. The CRJs were available because of light loads, so UAL instructed ZW to cancel a flight (to MLI) and fly it and the normally scheduled BNA flight with the UAL passengers and our scheduled 10 ZW passengers on a 1 hour delay. As a result, we had 2 CRJs depart within 5 minutes of each other, both loaded to the gills with passengers and baggage, and still had 3 or 4 people that had to catch a later UAL flight. It happens from time to time, and I don't know the exact situation, but it's possible that the almighty scheduling computer decided that there wasn't any available aircraft to handle that flight (scheduled or recovery) and assigned the two Do328's to the flight. That's the other problem that almost every airline has now - the computers decide the equipment for a flight based on projected number of seats they'll sell for any given month. Too many airlines trust the computer implicitly, and they get bitten for it more often than not because they don't have any flexibility to change equipment if the computer ends up being wrong.

With the buying the planes thing, let's use a MUCH better comparison. I finance my car. I make some sacrifices because I wanted to get a more reliable (and newer) vehicle than I had previously. Because of that, I'm paying almost $100 per month more than I would have with the other vehicle, but I'm already saving about $15 a week in fuel, and I don't have any major repairs pending on the vehicle for good deal of time because my vehicle has less than 30,000 miles compared to the 137,000 the old one had. Yes, my old one probably had another 3 or 4 years left in its life, but it needed major components repaired to go that long. It's much the same with airplanes. An F-100 or DC-9 may have 8-10 years left on it's life, but how much will it cost over a brand new ERJ to maintain it? How much cost saving are you getting by flying a 80-90% full ERJ-170 or ERJ-190 with newer and more fuel-efficient engines, easier to maintain flight instruments (black boxes that can be removed for repair and not have to be fixed in place like with some older mechanical instruments), and generally more time between major maintenance periods for structures because the newer planes have longer TBOs and TBFs than the older planes do. Sometimes it's a good trade off, some times it's not, but it depends on the operation, where and when you need the money, and many other factors that are best left up to accountants to figure out. I don't pretend to know what the managment at USAirways was/is thinking on many of these issues, but I'm learning a lot about how these things are calculated and what considerations go into the selection of an airline's fleet in my current job, and it's giving me some insight on how to spot good moves and bad moves by airlines in their fleet selection. Right now, I see a lot of mixed moves by the US Air managment, and that's part of why they're where they are. Instead of parking the planes, they should be selling them or returning them to the banks that hold the titles on them and getting rid of the payments, but they're not. Yet they're buying somewhat more economical aircraft that will give immediate and future relief on the price of maintenance of the fleet and cost of daily operation due to the "consumable" items (fuel, food, oil, etc.) that a plane and those aboard use every day in normal revenue operations.

 

[DrRaptor]

Also, for your review, here are the numbers I come up with from www.airlinepilotpay.com for 6th year FOs with airlines that operate the 737-300/400/500 series aircraft -

USA- 80,352 (5)
UAL- 70,200 (8)
COA- 83,808 (4)
AWE- 77,688 (6)
DAL- 112,320 (2)
SWA- 104,832 (3)
ASA- 112,500 (1)
FRT- 75,600 (7)

US Air comes in 5th, only below Alaska (who with Horizon seem to have the highest pay scale out there), Delta (who's also in big trouble), Southwest (go figure), and Contintental. However, notice that the difference in pay between the bottom 4 is only $10-$15 per hour difference, and that includes the bottom feeding pay that UAL pilots are getting under their forced contract from the Bankruptcy.

Here's the 737 6 year Captain Salary which does show an interesting feature that the Captain's salary isn't quite proportionately more than the 737FO salary for some reason, however, the difference between 4, 5, and 6 isn't all that great, being $6,058 a year.-

USA- 123,552 (6)
UAL- 107,640 (8)
COA- 129,600 (4)
AWE- 117,000 (7)
DAL- 171,600 (1)
SWA- 159,120 (3)
ASA- 171,000 (2)
FRT- 126,000 (5)

 

[typhoonpilot]

Under the old contract, and not that there will ever be a first year USAirways F.O. again, the pay was a salary of $36,000 per year. How that was affected after the pay cuts I don't know, but that was the number regardless of what some unofficial website shows.

Typhoonpilot

 

[typhoonpilot]

Oh, I went to airlinepilotpay.com and found that the figure you are looking at, ever so carefully, is 2nd year pay.

Typhoonpilot

 

[DrRaptor]

I noticed that and ammended the numbers to reflect mid-range numbers. The numbers change some, but they are still very high on the total list (although having ASA and Delta on the list really skews the average pay and I'd almost DQ them from the listbecause of it)