Big changes are in the air at Southwest
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wnbubbleboy
Veteran
Southwest's labor costs now are "the highest in the industry," Mr. Hamilton said. "Something like 45 percent of their expenses are labor now. They make up for it by being efficient in other ways, but nonetheless, it's still the highest in the industry now."
I am a Stock Clerk (We are still Teamsters) here in MX but do many tasks beyond my paygrade.......I won't bore everybody with the details but material support Company wide for over 400 aircraft is done by 155 clerks.
We are very productive. I say that with my knowledge of Brand "X" where I worked before.
The secret though is keeping us partners in the company's plan.
The moment you start treating me like an "employee" I will start acting like one.
wnbubbleboy
Veteran
Southwest Airlines (LUV): The Ghost Of Herb Kelleher
Juan Trippe is gone. The founder of Pan Am died in 1981. So is Howard Hughes who started TWA. Bob Crandall who started the frequent flyer program and the "hub and spoke" passenger feeder system is retired.
And, then there was Herb Kelleher. He started Southwest Airlines (LUV) with a pair of cowboy boots, a 737, and a bottle of Jim Beam. The airline's stock out-performed all comers from the early 1980s until about two years ago. Now Southwest is run by people who know how to hedge fuel prices and negotiate with unions.
Southwest announced that its was gearing back its expansion and plane purchases. Hedging does not save enough money and labor costs are rising. The new CEO told The Wall Street Journal: "Because of escalating costs, our profits are lagging, and we intend to adjust and fix that."
Southwest used to have an edge. It was fun to fly. The employees loved the company. Costs were low because the company only flew one kind of plane. JetBlue (JBLU) had some of that for awhile, but the company blew it by leaving customers on planes for hours during a snow storm.
One of the really hard questions about growth companies is whether, once founders are gone, the firms can keep the spirit of the original enterprise. Usually not. Wal-Mart's (WMT) stock has certainly not done as well since Sam Walton died in 1992.
Southwest probably could have kept some of its founding spirit. Customers still like friendly employees, funny stewardesses, a CEO who helps load luggage. But, it is unlikely that any of those things will be back.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about
Juan Trippe is gone. The founder of Pan Am died in 1981. So is Howard Hughes who started TWA. Bob Crandall who started the frequent flyer program and the "hub and spoke" passenger feeder system is retired.
And, then there was Herb Kelleher. He started Southwest Airlines (LUV) with a pair of cowboy boots, a 737, and a bottle of Jim Beam. The airline's stock out-performed all comers from the early 1980s until about two years ago. Now Southwest is run by people who know how to hedge fuel prices and negotiate with unions.
Southwest announced that its was gearing back its expansion and plane purchases. Hedging does not save enough money and labor costs are rising. The new CEO told The Wall Street Journal: "Because of escalating costs, our profits are lagging, and we intend to adjust and fix that."
Southwest used to have an edge. It was fun to fly. The employees loved the company. Costs were low because the company only flew one kind of plane. JetBlue (JBLU) had some of that for awhile, but the company blew it by leaving customers on planes for hours during a snow storm.
One of the really hard questions about growth companies is whether, once founders are gone, the firms can keep the spirit of the original enterprise. Usually not. Wal-Mart's (WMT) stock has certainly not done as well since Sam Walton died in 1992.
Southwest probably could have kept some of its founding spirit. Customers still like friendly employees, funny stewardesses, a CEO who helps load luggage. But, it is unlikely that any of those things will be back.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about
