$305 Million 2Q Profit

[EricLv2Fish]

Hey all,
I listened to 'Doogie's' Web cast and quite frankly -- ALPA, AFA, IAM are in for one hell of a fight. In a nutshell, there is no "need" or "hurry" to get these contracts integrated. One analyst boldly stated since what's going is "so successful" why merge, why not "operate the companies separately?" 'Doogie' went on to say they can do that, but it would be "better" to have work groups under one contract -- "It's a better way to run an airline," says 'Doogie.' Remember those words folks, "a better way to run an airline." I have a feeling the definition will change to suit management's needs. Let the company rake in big profits for years. Don't offer cost of living increases and fair pay? You'll have a mutiny on your hands and that's no path to "a better way to run an airline." 'Doogie' better brush up on some PSY 101 classes because human nature will rear it's ugly head when it feels it is being taken advantage of.

Eye

Sounds like posturing to me. A slow approach is safe. Profit sharing is also safe from the company's point of view. Keep costs inline when times are good and rewards employee performance. During tough financial times helps stop the bleeding as opposed pay increases made permanent under contract. Perhaps it's time realize the Airline industry is extremely unstable and Airlines need to have some flexibilty to recover from hard financial times. Profit sharing is one such mechanism. I can understand why Unions generally oppose profit sharing. After all one bird in the hand is better than two in the bush. Be interesting to see how this all pans out.

 

[FWAAA]

Our CASM is lower than all but SWA I do believe and those numbers above prove it. We have better routes, more perks and a hub and spoke...and they are hedged way more than we are. United and Delta even though they have gotten huge wage concessions aren't even close to our CASM. We did expectionally well and we should all be proud!

I haven't looked at all the earnings releases to analyze your assertion, but a quick glance at AA's CASM reveals a flaw in the bolded portion:

AA's mainline CASM was 10.88 with fuel and 7.41 ex-fuel

http://www.shareholder.com/aa/releaseDetai...eleaseID=204293

LCC's mainline CASM was 11.06 with fuel and 7.71 without

http://biz.yahoo.com/prnews/060727/lath004.html?.v=54

No doubt about it - LCC's results were good. But don't get carried away with the "only WN has lower costs" hyperbole.

About WN: looking for used planes so it can grow even faster. Huge profits at LCC will only embolden it - much like chumming the water. Like a shark, WN will be there to devour some of those great profits.

 

[azfyer]

It's amazing how fast a good profit turns negative. The ALPA release is over the top. Remember airline profits usually don't last long. Of the carriers will get crazy add alot of capacity and drive down revenue and profit.

You've got that right. Didn't take long at all for those NEGATIVE NELLIES to show themselves!!!!

 

[azfyer]

Of the $315 million net profit, $246 million of it came from the EAST side. Yeah, thanks for saving us, AWA. Shows where the REAL money is made...

YOU'RE WELCOME!!!
NOW...start showing a little GRATITUDE!!!

 

[rjh]

Of the $315 million net profit, $246 million of it came from the EAST side. Yeah, thanks for saving us, AWA. Shows where the REAL money is made...

Do you really think U would have had anywhere near $246 million profit without the merger????

 

[aquagreen73s]

Do you know the widebodies make a profit without any passengers being on them?

Fly an airplane with no passengers and make money? Obviously true at FedEx but that's just too far out to believe for a passenger airline. Not even Herb or Branson have figured that one out.

 

[skyhawk]

So why couldn't EAST make a profit before? <_<

Scofield, Wolfe, Siegel :down: go figure

 

[700UW]

Obviously you have never worked Air Cargo for US.

Do you know you have to book cargo over a week in advance to get the cargo on the plane.

The Cargo revenue numbers speak for itself.

 

[ab320driver]

YOU'RE WELCOME!!!
NOW...start showing a little GRATITUDE!!!

For what? AWA was the airline that Lakefield decided to merge with. With US's reduced labor costs and fleet realignment, the pieces were in place. DP and AWA had this handed to them on a silver platter! No wait, Parker is such a genius that he immediately created profits at EAST. The GRATITUDE should come from the fact that a often forgotten AWA was put on the map with this merger. YOU'RE WELCOME!!!

 

[Doc]

The profit sharing is based on an annual profit, so we have to wait till there's an annual profit to get the checks. I presume they'll come after the annual report is issued, so expect Feb '07 at the earliest.

Roughly 35,000 employees.

Jim

yes but is it based on salary or is it spread out evenly.
The more you make the bigger the check you get.....

 

[EricLv2Fish]

For what? AWA was the airline that Lakefield decided to merge with. With US's reduced labor costs and fleet realignment, the pieces were in place. DP and AWA had this handed to them on a silver platter! No wait, Parker is such a genius that he immediately created profits at EAST. The GRATITUDE should come from the fact that a often forgotten AWA was put on the map with this merger. YOU'RE WELCOME!!!

"Lakefield decided to merge with"?! Like DP had no choice? Get off the high horse. We should all be happy (at least for this qtr) that a marriage was consumated.

 

[BoeingBoy]

yes but is it [profit sharing - Jim] based on salary or is it spread out evenly.
The more you make the bigger the check you get.....

Depends, and may well be diffenent for various employee groups. For the unionized, the union will probably determine how their share is distributed (or already has). For non-union, somebody will decide but I have no idea who.

Jim

 

[BeenThereDoneThat]

Letter from Doug about profit sharing and our qtr results:

Letter from Doug Parker:
Profit Sharing Plan

Thursday, July 27, 2006

Dear Fellow Employees:

Today marks a remarkable achievement...second quarter 2006 of $305 million. Congrats to all employees.

We have also accrued money for our employee profit sharing plan -- $36 million. Which employees have profit sharing?

We will be working with our labor unions? Which labor unions?



I thank you for all you are doing to make the new US Airways a great airline. Think I'll wait a couple of years before I spend my share of the profit sharing.


Look for the "big" bonus (instant millionaires) in the next stock option sell off! You won't find any labor union types represented. IMO!

 

[EricLv2Fish]

The goal of the company is to have all labor unions included in the profit sharing. It will be upto the Unions whether or not they will make it part of the contract. West Non-union employees already participate in a different program also based on profitability but is distributed based on annual gross pay. We've had 2 nice payouts in the past 4 years. This applies to grade 23 and above. 5% of gross annual pay for non-supervisors, 7% for supervisors, and I think 10% for managers. Grade 23 and below have got guarenteed pay raises in luei of bonuses (one bird in the hand is better than two in the bush philosophy).

 

[EyeInTheSky]

EricLv2Fish,
Profit sharing is a good thing; however, a livable wage is preferred. Right now, "Doogie" is getting away with doing everything "on the cheap." Problem is in a customer service industry that isn't always the best thing. Maybe for Wall Street it is, but not for the 35,000 employees and customers. Point blank, if the company keeps rolling in the profits (thanks to subpar employee wages)then they are going to have to do more than just profit sharing. Raises, better benefits, and cost of living increases would be a good start...

Eye