Virgin America provokes fare wars at LAX

[ualdriver]

Sorry to interrupt the debate, but I just couldn't let this one pass.

I guess you feel that SWA's superior business model (ie point to point, high frequency, on time performance at very affordable prices), superior management (people running an airline like it is their family business, you know with a stake in its success rather than just a short term stock price gain, grab the bonus and run off to Tahiti mentality), reduced training costs due to a single fleet type, extremely motivated and mostly content workforce that takes pride in their company and their work ethic (among other things I'm sure I've left out) have nothing to do with SWA's success over the past 35 years?

There are many reasons why SWA is kicking everybody else's arse, those are just some of them. To continually point to hedges as the only reason SWA is successful is pretty simplistic and highly inaccurate.

Ok, back to our regularly scheduled betch-fest.

FJ

Actually, all of those statement are true, but if you examine Southwest's 10Q's/annual reports over the past, say 10 years, you'll notice two things that were their highest costs: fuel and labor. So it's true that all of those things you mention have an effect on SWA's low costs, but certainly their low labor costs (especially in the 90's and early 00's) and their fuel hedging/derivative strategy (more apparent in the past few years) have had a much greater effect. In fact, if you look on page B-22 of SWA's annual report for 2007, you'll see that fuel and labor account for about 63% of SWA's operating expenses. Everything else you mention is nice, but not the overriding factors to their success in my opinion.

 

[Falconjet]

Not to get into too big of a pizzing contest, but given that SWA's labor and fuel costs are so high, and they continue to make a profit, further proves my point that the other parts of their business model is what separates them from the rest of the industry and allows them to make money while the other guys bleed red.

SWA has higher labor costs and then other companies but lower fuel costs. OK, so they wash out maybe. The rest of their business model kick's everyone else's azz and they are too stupid to adapt.

Who is doing it right, the small, point to point airline with a single fleet type making money by flying between LBB and DAL for the past 35 years, or the rest of the industry losing billions each year by flying heavy metal across the pond and RJs everywhere else?

FJ

 

[ualdriver]

Not to get into too big of a pizzing contest, but given that SWA's labor and fuel costs are so high, and they continue to make a profit, further proves my point that the other parts of their business model is what separates them from the rest of the industry and allows them to make money while the other guys bleed red.

I disagree. I would attribute their rapid growth in the late 90's early 00's more to inexpensive labor than anything else, especially when compared to the legacies they were competing against. Remember that back in the good 'ole days, 737 Captains at United were making well over 200K, had a very nice pension, a B fund, and extremely cushy schedules. We legacy guys were VERY expensive labor. SWA guys had none of that and flew their arses off compared to us. And our flight attendants made better money. And our mechanics made better money, etc., etc. That's a huge cost advantage. Like I said, the other stuff you mentioned helps but not as much I don't think.

Now I would attribute their success to huge gains they've had with their hedges. In fact, those hedges are paying for their higher labor costs right now, and their management team knows that. If fuel stays flat or goes down (I have no clue what it will do), I think they're going to see some money losing quarters because the cash value of their hedging strategies will decrease in level or down markets.

 

[thruthemurk]

...I came from a 13000 pilot airline that did a darn good job holding it's own in the down turn, and to this day I still say APA has 10 times the union ALPA is.

In your assessment, make sure and include the original outsourcing of same banner flying to the regionals - probably the biggest single mistake a pilot union has made in the post deregulation era.

You might think that that biggest blunder honor goes to the originator of the B-scale; of course that disaster was contrived by Bob Crandall and bought hook line and sinker by the APA.

ALPA has made countless mistakes as well, including following the APA down both of these paths.

 

[xrated]

.. now try to imagine yourself on the street and with kids to feed and provide medical insurance for in TODAY's market.. where would you be looking for work if all you knew how to do well was fly?

People do what they have to do. It's a freakin joke when one pilot bitches to another saying they "have lowered the bar"! I know in the past FMS-Speed has done it, ualdriver has done it, and heck, I too have done it. (I admit as an America West pilot, I'm gulity of "lowering the bar" but in my deffence have never voted on a contract)

But at the end of the day, If you can look at youself in the mirror and are confident in the decisions you've made and are doing the best you can to provide for yourself and your family, why worry about what everyone else thinks? F@#$ them all. If you're out of work, try to get on with VA. If you work for UA and don't like what other airlines are doing...get over it, It's not up to you....If it was, you'd be management. And if you work for Southwest, I'm jealous and I HATE YOU!!!......Just kidding but that seems to be the theme!

One day this whole mess is going to work itself out...How? I have no clue, but rest assured, you're going to sleep in the bed you made.

 

[IB6 UB9]

If guys want to go work at VA for substandard wages- fine. It's a free country, right? My point is that if you choose to do so, don't come onto forums like this one and try to tell everyone, "Hey look, Skybus failed so now this proves that pilots flying mainline aircraft for substandard wages don't matter." It does matter. That's the point.

Thank goodness you continue to uphold the bar over there at UAL. I missed it btw, when they tried to gut your pay, contract, and work rules what day was it that you stood firm and didn't "accept substandard wages"?

 

[chppr5]

Did you notice what our payscales were before we had the bk gun put to our heads?? When JB, VA raises the bar on pay/work rules let us know will ya.........................

 

[waveflyer]

ual- you're completely committed to blaming other much much smaller companies than realizing that as a member of a 10,000 pilot work force you've had much more influence on VA wages than any pilot applying there.

Until you see how you (ALPA) (APA) and our whole system creates this environment, nothing will change. This is the only - and i mean ONLY- logical conclusion to a system in which United is largely responsible for. Of course the pay is bad- so ask yourself- why would any pilot CHOOSE that? As the most influential player in this business-= how has UAL helped to create it? Worry about things YOU control.
And I have never said the ship sinks or swims based on pilot pay- You have, however.

And no- UAL management would NOT be happy w/ you if you flew for $95/hour-(Christ, they already cut your pay in half and stole your pensions-- you still keep showing up to work at those wages- is anyone happier?) and the culture there certainly would not change. If you flew for a $1- they would be arguing to pay you 75cents and you and I both know it all too well.

 

[ultrarunner]

While I can be sympathetic to some of what JKE406 is saying, what most fail to realize is that once the 'compensation bar' has been lowered across the board, essentially industry wide, that actually becomes the new benchmark.

BK aside, it's amazing how quick an employee group will ratify a concessionary contract. And I think EVERYONE one would agree that NO concessionary contract has EVER resulted in preventing a BK filing or preventing a liquidation.

So working groups really needs to ask themselves if it's worth it. Since once you give it up, it is incredibly hard to EVER get it back.

As a result, the new compensation standard.

 

[IB6 UB9]

Did you notice what our payscales were before we had the bk gun put to our heads?? When JB, VA raises the bar on pay/work rules let us know will ya.........................

Yup...I noticed...I was on the seniority list. I also noticed that when it was time to come back the offer was $32/hr so I chose to stay put. Let me know when you raise the bar on pay/work rules and I might reconsider. With all your prattling on you failed to realize that your pay is actually lower than ours.