Writing on the wall for major airlines

[jarhead]

From the Minneapolis StarTribune, a story on JetBlues newest assault coming to a major carrier......NWA

http://www.startribune.com/stories/535/4044659.html

 

[TXCAP4228]

Yes, they are today, but their first couple of years would have put them out of business had they not had that kind of cash.

See page 9 below...

Also noteworthy, considering managements money grabbing...Neeleman's base salary is $200K plus a bonus of $90K and options of $37K... Far less than the millions we've all seen elsewhere.


http://media.corporate-ir.net/media_files/NSD/jblu/reports/2001prospectus.pdf

Also, during the last up cycle, United generated the most revenue, not the most profit. Delta was #1 in profit, followed by American which was#2 in revenue and profit. This is according to ATW.

Wow, a company that actually needs investment capital for its first 3 years of operations. Go figure. I wonder if this might be why its called "start up capital."

Just so the record is straight, Jet Blue is kicking some serious a$$.

Its very misleading to say that their start up capital covered up huge losses. If you have any idea how businesses form and operate early on you'll know that you have said something just plain dumb.

 

[Skyboss]

Wow, a company that actually needs investment capital for its first 3 years of operations. Go figure. I wonder if this might be why its called "start up capital."

Just so the record is straight, Jet Blue is kicking some serious a$$.

Its very misleading to say that their start up capital covered up huge losses. If you have any idea how businesses form and operate early on you'll know that you have said something just plain dumb.

No one is arguing JetBlue's stature in the industry today. One does have to wonder if they would be flying shinny new Airbus's where it not for said start-up capital. No need to be insulting and nothing dumb about the statement.

The capital allowed them to get a quick start, with new aircraft and favorable lease rates. Capital is also insurance against loss. With that kind of loss in the first two years, although normal, they would not have been able to obtain the financing needed to obtain the orders and options they have on the books today.

 

[TXCAP4228]

Re: Re: Re: STFU

Reading comprehension isn't your strong suit is it?


UAL didn't just make money when everyone else did.
They were BY FAR THE LARGEST PROFIT MAKER DURING THAT TIME.
They weren't the largest airline either. They were largest by one market share point over AA but were smaller in terms of number of planes and employees.

Their model worked well then and would work well again in an up economy.
It didn't adapt. Thank you for restating that after I said it in my original post.

You know why they failed? Because they felt that they could wait out the down cycle and take advantage of their VERY SUCCESSFUL MODEL AS THE ECONOMY SWUNG UP AGAIN.

Well, that didnt happen. The economy didn't come back fast enough and when 911 happened it was all over. 911 itself added years to the recovery. Years that they didn't have the cash to wait out.

I operate 2 businesses independent of each other. They both make money. I have lots of help to make them work.

And I have a decent financial adviser.

You sir, probably have trouble breathing.......unless you were smart enough to drill a hole in your belly button.

Yeah, I have trouble breathing, but I can add and subtract.

The columns are Gross Revenues, Operating Income and Net Income in order, all shown in millions, & net income as % of gross rev's:

UAL
2002 14,286 (2,837) (3,212) -
2001 16,138 (3,771) (2,145) -
2000 19,352 654 50 .25%
1999 18,027 1,391 1,235 6.8%

DAL
2002 13,305 (1,303) (1,272) -
2001 13,879 (1,602) (1,216) -
2000 16,741 1,637 928 5.5%
1999 14,883 1,318 1,196 8.0%

SWA
2002 5,521 417 240 4.3%
2001 4,924 631 511 10.3%
2000 4,628 1,021 625 13.5%
1999 3,954 781 474 11.8%


Ok, since you have no trouble breathing (I guess) maybe you can explain to me how your previous assertion is true (ie, that United made more money than anyone when times were good).

It looks for all the world to me like United made very little money in 2000 when Delta and Southwest did pretty well. You might also notice, since you happen to have no trouble whatsoever at breathing, that Southwest cleared $625MM on revs of $4,628MM when United only cleared $50MM on revs of $19,352MM.


It looks to me like United was sucking even when times were good.... but what do I know? I breath through my belly button. Hell, I even included the 1999 numbers just to be fair, and your claim still isn't convincing.


Sorry, pal. Looks Like I am the one who can read. It also looks like United didn't have their act together to start with.

Have a nice day.

 

[goldentrout]

Just need to add the comment that an airline pilot is worth, despite what he/she might think, whatever the market will pay him/her.

Maybe someday again top airline pilots will be worth 300K a year, but the history of the industry (after deregulation), and today's industry, seem to show that the market value of a top FO is around 100-120K and a top Capt around 175-200K.

Much like real estate, we all might like to think that we've invested so much in our houses, they must be worth a certain dollar value.

Actually, they are only worth whatever someone will pay us for them on the market.

Pilots' egos can get us into trouble both in and out of the cockpit.

It seems that our perceived (egotistical) worth was, and is, actually somewhat less than our actual worth.

ALPA's negotiating goal should not be "as much as we can get as fast as we can get it...it's management's job to find the money to pay us." (I mean really, how dumb is that anyway)

Rather, it should be "how much can the company afford to pay us in the bad times, and what program can we set up to ensure we benefit in the good times."

That sure would be a good strategy to follow...they might even find themselves in a situation where their company makes money 20 years in a row, they get thousands of dollars in profit sharing, and they never furlough...just imagine if they really was a company like that.

Of course there is...it's just not an ALPA carrier.

 

[Insatiable]

Why shouldn't airline pilots get paid what they are worth? Is it unreasonable that a person with a four year degree, a skill that is not easy to master, and that only a few can do, should be paid fairly? Golf pros at exclusive country clubs get paid up to $5,000/hr.!! All they do is try and fix somebody's slice.

Airlines are not going out of business because of their pilots pay scales.

 

[TXCAP4228]

Why shouldn't airline pilots get paid what they are worth? Is it unreasonable that a person with a four year degree, a skill that is not easy to master, and that only a few can do, should be paid fairly? Golf pros at exclusive country clubs get paid up to $5,000/hr.!! All they do is try and fix somebody's slice.

Airlines are not going out of business because of their pilots pay scales.

I don't think that anyone is saying that pilots should not be paid what they're worth.

I think the point goldentrout is trying to make is that pilots should accept a pay rate that is comensurate with what the market will support.

It sounds like you are saying (and correct me if I have misunderstood) that pilots deserve higher pay because of education, or because its a hard skill to learn/only few can do the job. The answer to this is: the market only has a need for so many pilots. There are more qualified pilots out there than what the market will support, and this is what causes a lowering of wages.

It has nothing whatsoever to do with how much a golf pro makes.

 

[jarhead]

Insatiable

Everyone in the country is paid exactly what they are worth. Not a penny more, and not a penny less. People are paid by someone else. That someone (or enterprise) determines what they are WILLING to pay.....be it a garbage collector, a pro baseball player, or even a pilot. Your worth is in the eyes of the payor, no one else. (Congressmen and Senators excepted) The kid that mows my grass is worth what I am willing to pay him. If he wants too much, I'll look for someone else. If I can't find someone to do it for less, maybe I'll pay what he want's, or maybe I'll do it myself. Maybe I'll just let it go to weeds. Who knows

 

[C150Commuter]

Let me reiterate my point from earlier in this conversation....everyone here is a pilot from my understanding....why is the general consensus that it is cool to make a lot less money then the majors paid? I understand economics and maybe it is the way of the future, but i mean, come on....it ain't cool to be po....

 

[jarhead]

There are far too many pilots to all be employed by the "majors" hauling wide bodies across the Pacific. That is the reality! Many are on furlpugh now. Ya gotta deal with reality, not wishful thinking.