rotate said:
I'm a little confused about the ratio of employees to aircraft. Aircraft come in many sizes of capacity and this should be taken into account. I believe a more valid ratio for passenger carriers would be employees per
seat or even more valid, employees per ASM. Could Mr. Cordle (or someone else) provide statistics on that measure? I would welcome comments from others on this observation. :huh:
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I reversed the numbers in the following calculation because each airline flies so many ASMs per employee. If it were employee per ASM, we'd be looking at very small fractions.
In 2003, Southwest flew 2,185,601 ASMs per employee.
In 2003, AA flew 1,948,219 ASMs per employee.
In 2003, AMR (including Eagle) flew 1,802,967 ASMs per employee.
AA's performance using this metric is not too shabby, considering all of AA's long-haul flights on which full meals are served, which are staffed by many more FAs than required by the FAA. Does WN fly a single flight with more than the minimum FA staffing? No WN flight has relief pilots or double crews, like many flights to Europe, Deep South America or all flights to NRT.
Another interesting metric is the employee cost per ASM. Because WN farms out most of its heavy maintenance (and AA performs most heavy maintenance in-house), I added contract maintenance and repairs and materials to each airline's labor cost for this calculation.
Again in 2003, WN spent 3.69687 cents per ASM on labor and repairs and maintenance.
In 2003, AA spent 4.5669 cents per ASM on labor and repairs and maintenance.
In 2003, AMR spent 4.67418 cents per ASM on labor and repairs and maintenance. Eagle really is more expensive than mainline.
Even though in many cases the hourly wages are higher at WN, their employees produce an ASM at lower cost than do the employees at AA. Represented employees will place all the blame at the feet of management, and management will counter that many of the inefficiencies are created by the labor agreements that union members demanded (and threatened to strike if not agreed to by AA).
Who knows who is right. The truth is somewhere in between. A large international airline with a huge hub and spoke network is by design a little less efficient than WN's mostly point to point model.
What is certain is that WN flies a butt a mile more cheaply (nearly a penny cheaper just on labor cost) than does AA. Add in the money WN is saving due to its successful fuel hedging strategies this year, and no wonder WN is still profitable.