Be an "Airline Analyst"

[john john]

Whats wrong here???

Express

 

[BoeingBoy]

I know that there are more up to date stat's and I'm sure that someone will provide them but right after 9/11 there was an article in some business magazine breaking down the airline industry. I was stunned to see that United employeed 180 (give or take) employee's for each aircraft they had in their fleet. Southwest had 87 employee's per bird and I've seen other stat's since that the number is being reduced.

For 2007, WN had 67.4 employees/aircraft while US had 97.5. However, those numbers can be a little bit deceiving since airplane size will affect them somewhat (more crewmembers on a 330 than a 737) as will the amount of outsourcing.

Southwest's fuel hedge's have been a hot topic and I recall a few year's ago that people were sure that they contract's would expire in 2005/06 and the detactor's said we would see the downfall then.

I doubt I'll see WN's hedges all expire in my lifetime (which will hopefully be at least another 20 years or more). That's because the primary reason for hedging isn't to get fuel at a drastically lower price (although that's nice when it happens), but to know well in advance what that 30, 40, 50% of your costs will be well ahead so you can price for known costs and not price based on nothing but hoping that fuel won't be more expensive than planned.

Jim

 

[FM2436]

Air travel may become a throwback to the era before deregulation, but that wouldn't involve planes flying primarily to big cities. The major airlines were largely point-to-point prior to deregulation and they stopped in every little town along the way picking up passengers, in full sized aircraft. If anything we'd be flying larger aircraft to smaller cities along major routes. There are many airports that, today, don't have passenger service at all and pre-deregulation had 727's passing through daily.

Those were the days!

An interesting, but a little lenghty, from the Michael Boyd Group's Monday Morning Hot Flash titled DOT's Delay Solution: Cut Out Small Community Air Service. Say what you want about the Boyd Group, but they seem be right on with their opinions and consulting to airlines and airports.


http://www.aviationplanning.com/asrc1.htm

 

[does this plane go to paris]

An interesting, but a little lenghty, from the Michael Boyd Group's Monday Morning Hot Flash titled DOT's Delay Solution: Cut Out Small Community Air Service. Say what you want about the Boyd Group, but they seem be right on with their opinions and consulting to airlines and airports.


http://www.aviationplanning.com/asrc1.htm

Not until "our" elected leader's stop the convience and subsidies. Again, I don't have the article, but there was a story on how some obscure congressman from PA added extra funding to a spending bill to get a subsidy added to keep a nonstop flight between DCA and his hometown. Some reporter spent the day at the airport and saw less than 20 pax flying on 4 different flight's. The reporter did some investagation and found out that one of the frequent flier's was the congressman on the last flight out every friday and back on monday. He of course extolled the virtue's of having vital air service between the two cities. When the feeding trough is out, there's plenty of hog's to get their fill.

 

[Bobbie]

Yeah, let's just cut government involvement completely and let the free market govern.

It works for the oil industry...look at their profits!

 

[roabilly]

ussnark' date='Aug 11 2008,

(Excerpt)
I am not certain which part of employee costs you are referring to. With the highest employee compensation in the industry (highest rate of unionism also) offset by the best employee utilization, it would be rather difficult to measure where SWA is located on the "employee cost" playing field. I would suspect that they are "outside the box" compared with the legacies.

------------------------------------------------------------------------
In reference to WN employee costs…

My understanding is that WN has a relatively young work force in comparison with some of the larger carriers. This condition means that a large percentage of their human resources have not yet reached the top of their wage pay scales, pensions, etcetera... thus incurred costs in terms of labor have yet to mature.

I agree that WN is heavily unionized. This is a fact that I applaud… because it clearly demonstrates that organized labor is not the problem in this industry!

You seem to be capable of clarifying these assumptions… please correct me if I’m wrong. Your informed opinion is always welcome.

 

[roabilly]

(Excerpt)
For 2007, WN had 67.4 employees/aircraft while US had 97.5. However, those numbers can be a little bit deceiving since airplane size will affect them somewhat (more crewmembers on a 330 than a 737) as will the amount of outsourcing.
Jim

Jim...

I agree that these numbers seem to support a very efficient operation in terms of employee utilization. However… I think that the nature of the beast, dictates that hub operations, first class service, international routes etc. will skew that perception when comparing WN to the legacies.

 

[BoeingBoy]

please correct me if I’m wrong.

You're basically right - an airline that's growing like WN has lower average employee longevity than an airline that's stagnant or shrinking like US. Of course, the merger also changed US' longevity curve for the better since HP had a better distribution of longevity than US. Likewise the hiring of ground personnel (ramp, CSA, etc) as part of the effort to improve operations helped US' longevity distribution. Truthfully, I don't know how different the two are now, but a guess would be not that great a difference. Plus I read that WN has partially reversed their planned slowdown in growth now that the legacies will be shrinking - they had gotten down to basically zero growth (receiving 8 new 737's while retiring 6 older ones) but have now decided to take delivery of 21 of the 29 that were originally on order while retiring the 6 or 8 older ones.

Jim

 

[roabilly]

Jim…

This is exactly why I created this thread! Collectively… people who have worked, or work in this Industry… have a darn good idea what the prevailing trends will dictate.

Often..... better than the overpaid “Analystâ€￾!

 

[BoeingBoy]

Well, most of it really isn't rocket science.....

Jim

 

[roabilly]

I don't know about labor costs but, by and large, Southwest's employees seem a heck of a lot more productive than any other airline's employees. That's not a strike against any airline...and I'm no fan of Southwest...but it seems like there are fewer people standing around doing nothing and more people actually chipping in to make it work.

Looks to me like Southwest is getting what they pay for...

Bobbie...

It's called Morale!

P.S. Jim... It's "Jet" Science !

 

[Bobbie]

Bobbie...

It's called Morale!

Morale? Wait, that's not allowed... if this were US, they'd fire all of them! Hire the Juniper/Barclays vultures to take their place...offer an extra 15 cents per hour and they'll run like mad for the US Airways employment applications.

 

[SolidCactus]

Morale? Wait, that's not allowed... if this were US, they'd fire all of them! Hire the Juniper/Barclays vultures to take their place...offer an extra 15 cents per hour and they'll run like mad for the US Airways employment applications.

I'm dying to know where the Barclays/Juniper vultures come from? Do they only get paid when they swindle someone into that Mastercard? These guys are far too agressive for someone earning a real salary.

Maybe that will be the new US Airways model once the al a carte model is completely rolled out. The flight attendants will only get paid sales commissions on beverages (no base wage), the gate agents will only get paid if they scan all passengers onboard within 25 minutes... Could be a very interesting model