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Why are US Airways costs the highest?

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UALjan15

Uniform Swapper
Joined
Dec 13, 2002
Posts
257
I was just reading on a recent Delta thread about US Airways still having the highest ASM cost in the industry at 11.5 cents. I know they were much higher (somewhere around 13-14?) prior to bankruptcy. What I don't understand is how they can still lead the industry in costs, after the huge labor concessions, pension writeoff, and other costs that they should have been able to trim under BK protection. What am I missing here?
 
UALjan15 said:
I was just reading on a recent Delta thread about US Airways still having the highest ASM cost in the industry at 11.5 cents. I know they were much higher (somewhere around 13-14?) prior to bankruptcy. What I don't understand is how they can still lead the industry in costs, after the huge labor concessions, pension writeoff, and other costs that they should have been able to trim under BK protection. What am I missing here?
Short average stage length would be my guess. They are a big regional with some west cost and trans-atlantic flying. Also the hub and spoke system drives the costs way up. As they used to say US Airways specializes in flying people from nowhere to nowhere.
 
The lowest paid pilot is still making 16 year pay or so-- there's no middle ground or lower tier. That probably also holds true for other parts of the airline from maintainters to ticket agents.
 
Ne Us

They also fly a lot in the Northeast which (even though I live there and like it) is plagued with bad weather 6 months of the year. If it ain't the Northeaster blizzards, its the summer thunderstorms. Deicing, holding, diverts; they all add up.

Just my humble opinion.
 
other stuff

There are a lot of costs to run an airline besides labor. Sure, labor is the largest SINGLE cost, but think of all the other things that an airline uses. Aircraft leases, building leases (for HQ and the like), mgmt salaries, computer equipment and support, fuel, etc.

Generally when an airline is in financial trouble, the costs of lots of other things go up. The vendors are worried about the company going back into bankruptcy (and not paying for a while) as well as just being paid slowly.

Then if the airline has poor credit, they have to pay a higher interest rate for almost everything - that raises costs too. Also possible is that they are still paying on some of the airplanes they parked in the desert. Yes, they might have to pay leases/payments on them, but they don't have to pay for the fuel/crews/mx to fly those. Might be cheaper than flying them.

Just some thoughts.

iaflyer
 
Follow Gordon's Advice

I think it was Gordon Bethune's statement that he could make a profit now if he could just fire and rehire all employees every 5 years.
 
That baggage handler, making 65K working only gate 17C for the day in PHL with only 3 flights coming in on his 8 hour shift doesn't help.
 
i think around the block hit pretty close to the bullseye. They get paid mega coin to do the work that highschool kids can do. Cleaning airplanes, loading bags, giving the yellow tags out for peoples checked bags, clearing us to start our engines, bitching, moaning, watching tv and laying around the crew room for hours at a time. USairways hires a cleaning service to clean up after these ramp workers every single night at their crew rooms. (the lairs underneath where the passengers wait for the planes.) The rampers clean the planes while the professional cleaners clean up after the coffee and toilets that the rampers use. This is pretty F'ed up! I say stop paying the cleaners to do this and have the ramp workers take turns mopping their own floors and bathrooms instead of laying around in between flights. Just a thought. I can't be the only one seeing this am I????? I don't know what they pull down a year but i believe with overtime it is between 50-90K a year. They all have like 20 years seniority on average i believe. I believe i could be trained to do their job in about one day, 3 tops......how long to train them to do mine???
 
Time required to train & qualify replacment worker from scratch:

Gate Agent - 2 hours
Utility - 2 hours
Fleet Service - 2 hours
F/A - 2 weeks
Pilot/Mechanic - 2 years

Number of employees required by FAA to move plane from point A to Point B:

Pilots - 2
F/A - 3
Gate Agent - 0
Fleet Service - 0
Utility - 0

Remember, it's not about payback, it's about (finally) fixing the airline.
 
Gordon's book actually mentioned that Continental, post-Lorenzo, had people paid to clean up after the mechanics. Gordon wasn't happy with that and did away with it, so I can see where you're coming from. A friend of mine used to work at PSA and he said all the PSA rampers were getting laid off (back in 2001) in favor of U rampers - a difference of probably $20 per hour + bennies - for PSA flights. Go figure. It sounds as if management asks labor for concessions but doesn't have the balls to come into the union hall, hat in hand, and ask for cooperation getting costs down. I'm sure that the union would understand if management came in and said, "Hey, we need you guys to start cleaning up after yourselves as we can't afford the cleaners. At the end of the night, please be so kind as to throw away your wrappers and sweep the floors. We'll even give you a 3% pay raise for the extra work." Management and labor need to work together to get the costs down. One side can't work by itself. It sounds as if U mgmt can't stand up to the union, whines when it can't get concessions, and goes to the BK court to try to get them instead.

Neither labor nor management should have too much power in negotiations. However, honesty, common sense, and prudence should typically take you a long way. I guess neither side has too many leaders to rely on in hard times, else this would be a snap. Weak management and belligerent labor gets you nowhere.

Big, dysfunctional family...
 

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