PHX F/A & Pilot Crew News Sessions: August 11, 2011

[CallawayGolf]

Also not stated was the somewhat new executive bonus structure that rewards on time performance along with several other measurables. So it's still the same Customer be Damned place and now we have customer unfriendly policies being implemented where the sole beneficiary is the Management team. Nice

We all know what customers say they want:


But what is really important to them when they pull their credit card out is:
and

Of course if airlines started offering this for a few bucks less, someone would take it:

 

[fatherabraham]

I'll give you 1000 to 1 odds that SH doesn't see them. I'll guarantee you that SH has seen Parker's defense of his compensation in the past - mostly "at risk" and all that - and that exposure has contributed to SH's impression of the man.

Jim

Deal......Put me in for $5

 

[SparrowHawk]

IIRC, Doug Parker's Compensation plan is public record and can easily be determined by looking at one of the SEC filings that are required of public companies.

Somewhere shortly after the failed Reservation Migration and Doug's Unfortunate Incarceration the Board of Directors revised the Executive Compensation Plan. Within weeks of the Comp Plan change, US Airways embarked on it's new plan for operational improvement based upon the metrics required for the Triple Play payout.

US Airways CEO Doug Parker's pay up 6.5%, tied to airline profits

Apr. 30, 2011 01:34 AM
The Arizona Republic

US Airways CEO Doug Parker saw his total pay package increase 6.5 percent in 2010, to $2.8 million, because of US Airways' improved financial performance.

The major components of the 49-year-old executive's compensation broke down this way: a $550,000 salary, the same since 2001; $987,800 in incentive bonuses, up from $429,000 in 2009; and a projected value of $1.1 million in stock-option grants, down from $1.5 million in 2009.

Parker and other top executives received bonuses tied to internal goals on cost management as well as on-time performance, improved baggage handling and customer-complaint rates. However, the majority of Parker's bonus - about 60 percent - was tied to the Tempe-based airline's profitability in 2010.

Please take note of the sentence in bold from the article on the new bonus structure. So I stand by my comments regarding Parker.

 

[BoeingBoy]

Deal......Put me in for $5

Want me to PM you with the address to send the $5? You see, I know. Others are trying to divine something from his posts.

Jim

 

[CallawayGolf]

IIRC, Doug Parker's Compensation plan is public record and can easily be determined by looking at one of the SEC filings that are required of public companies.

Somewhere shortly after the failed Reservation Migration and Doug's Unfortunate Incarceration the Board of Directors revised the Executive Compensation Plan. Within weeks of the Comp Plan change, US Airways embarked on it's new plan for operational improvement based upon the metrics required for the Triple Play payout.



Please take note of the sentence in bold from the article on the new bonus structure. So I stand by my comments regarding Parker.

You stand by your statements, but how does that prove your assertion that this was the result of a "customer be damned place". Are you saying that an airline is anti-customer for incentivizing top leadership to focus on cost controls, on-time performance, improved baggage handling, and reducing customer complaints? Seems to me that customers would greatly and directly benefit from having the airline improve on these metrics. Cost controls are good for everyone whereas bankruptcies and other indicators poor fiduciary stewardship can be disastrous for customers. All the other measures are fully customer-experience focused, so what would be the nature of the complaint there?

Now if you want it to all boil down to closing the door at D-10 and think that is customer-unfriendly I would understand but disagree with that premise as well. Flight schedules are extremely tight and a small disruption, especially in the early part of the day, can have massive and cascading consequences to thousands of passengers, flight crews, and airport staff just because someone wanted to slightly delay a single flight for connecting passengers. In the micro-economy of a particular flight sitting at the gate it probably makes little sense to close the door early. In the macro-economy of the whole system, regular violations of this policy will and often do cause a full day of expensive and frustrating irregular operations for customers and the company alike.

I had this happen to me several years ago when I was traveling on AA. The plane was at the gate and there I was, ticket in hand, being told I would not be allowed to board. The fact that they closed the door wasn't as big an issue for me as the fact that the FA's announced on my inbound flight that they were going to hold my connecting flight. Then they rushed me off the plane, put me on a shuttle bus and wisked me across the tarmac to my connecting gate and then told me I was too late to board a plane that was still sitting there. I respect their policy, but there was some serious miscommunications going on. At any rate, if an airline doesn't have a policy to get planes out of the gate on-time, then you can be assured that most of their flights will be late and most of their customers will suffer from an airline not focusing on one of the most important measure of customer satisfaction - getting where they need/want to be on time.

 

[SparrowHawk]

You stand by your statements, but how does that prove your assertion that this was the result of a "customer be damned place". Are you saying that an airline is anti-customer for incentivizing top leadership to focus on cost controls, on-time performance, improved baggage handling, and reducing customer complaints? Seems to me that customers would greatly and directly benefit from having the airline improve on these metrics. Cost controls are good for everyone whereas bankruptcies and other indicators poor fiduciary stewardship can be disastrous for customers. All the other measures are fully customer-experience focused, so what would be the nature of the complaint there?

Now if you want it to all boil down to closing the door at D-10 and think that is customer-unfriendly I would understand but disagree with that premise as well. Flight schedules are extremely tight and a small disruption, especially in the early part of the day, can have massive and cascading consequences to thousands of passengers, flight crews, and airport staff just because someone wanted to slightly delay a single flight for connecting passengers. In the micro-economy of a particular flight sitting at the gate it probably makes little sense to close the door early. In the macro-economy of the whole system, regular violations of this policy will and often do cause a full day of expensive and frustrating irregular operations for customers and the company alike.

I had this happen to me several years ago when I was traveling on AA. The plane was at the gate and there I was, ticket in hand, being told I would not be allowed to board. The fact that they closed the door wasn't as big an issue for me as the fact that the FA's announced on my inbound flight that they were going to hold my connecting flight. Then they rushed me off the plane, put me on a shuttle bus and wisked me across the tarmac to my connecting gate and then told me I was too late to board a plane that was still sitting there. I respect their policy, but there was some serious miscommunications going on. At any rate, if an airline doesn't have a policy to get planes out of the gate on-time, then you can be assured that most of their flights will be late and most of their customers will suffer from an airline not focusing on one of the most important measure of customer satisfaction - getting where they need/want to be on time.

When you put personal gain and profit before people you have the potential for many things to happen. In your first paragraph one could argue as you have that the incentives are good for the customer and good for the airline. However where US/Parker get off track is the manner in which these seemingly customer friendly moves go off track. Fear is a powerful motivator, it's also one of the most negative and destructive motivators one can use with customer facing employees. Writing up agents and putting them "on a level" destroys morale and gives them absolutely no incentive to treat customers well. So many will close the door now at D-15 in order to ensure they aren't disciplined. Then there is the push back 50 feet, stop and wait 20 minutes. ACARS is triped and the flight is shown as departing on time. Happen in PHL all the time. ALL THE TIME, CLT as well. US Airways isn't running an operationally better airline as much as it is doing a better job "Managing the numbers".

As to cause and effect. We didn't see all of this concern for on time performance before Doug and Scott got their Comp Plans changed. There is IMO a direct causal link between the changes to the comp plan, Management's use of fear as a motivator in order to "hit the number" no matter who get run over. Take it to the whole pilots "safety Campaign" and the hearing today. Do you really think Parker would have sued USAPA if the slowdown didn't effect his bonus?

Oprah said it best, "When people show you who they are, BELIEVE them". Scott Kirby and to a lesser extent Doug Parker have shown me EXACTLY who they are in both word and in deed. It doesn't bother me that they lie through their teeth, it bothers me because I can no longer trust them. If you wonder why I take that view all I'll say is I hit a SNAFU traveling and I was appalled. I knew who to call several levels up and it still took 2 hours to resolve at the airport. During this little pee pee dance I got a real long peek into how US is managed and frankly I don't know how anyone could stand to work for those two nincompoops!

 

[Phoenix]

There was suppose to be a CLT crew news last tuesday. Any idea how long it takes to get it uploaded to thw Wings site?

It depends on how much editing is necessary!

 

[CallawayGolf]

When you put personal gain and profit before people you have the potential for many things to happen. In your first paragraph one could argue as you have that the incentives are good for the customer and good for the airline. However where US/Parker get off track is the manner in which these seemingly customer friendly moves go off track. Fear is a powerful motivator, it's also one of the most negative and destructive motivators one can use with customer facing employees. Writing up agents and putting them "on a level" destroys morale and gives them absolutely no incentive to treat customers well. So many will close the door now at D-15 in order to ensure they aren't disciplined. Then there is the push back 50 feet, stop and wait 20 minutes. ACARS is triped and the flight is shown as departing on time. Happen in PHL all the time. ALL THE TIME, CLT as well. US Airways isn't running an operationally better airline as much as it is doing a better job "Managing the numbers".

As to cause and effect. We didn't see all of this concern for on time performance before Doug and Scott got their Comp Plans changed. There is IMO a direct causal link between the changes to the comp plan, Management's use of fear as a motivator in order to "hit the number" no matter who get run over. Take it to the whole pilots "safety Campaign" and the hearing today. Do you really think Parker would have sued USAPA if the slowdown didn't effect his bonus?

Oprah said it best, "When people show you who they are, BELIEVE them". Scott Kirby and to a lesser extent Doug Parker have shown me EXACTLY who they are in both word and in deed. It doesn't bother me that they lie through their teeth, it bothers me because I can no longer trust them. If you wonder why I take that view all I'll say is I hit a SNAFU traveling and I was appalled. I knew who to call several levels up and it still took 2 hours to resolve at the airport. During this little pee pee dance I got a real long peek into how US is managed and frankly I don't know how anyone could stand to work for those two nincompoops!

So what is your solution for front-line employees who don't follow rules? Do you pat them on the back and tell them it's okay that your actions caused potentially multiple flight delays disrupting operations and delaying customers they will never meet at some other station? Do you "empower" thousands of front-line workers to just go with their gut instinct and not to worry about the far reaching consequences of their decisions or the millions of dollars that one wrong choice might make? A gate agent has little or no visibility to the logistical and financial implications of such a decision so it makes zero sense to not have established rules that everyone is expected to follow for the benefit of all - passengers, employees, shareholders. If those rules are not beneficial, then let someone who has the proper level of authority make that determination. If a manager, director, or executive makes a bad decision -then he/she would have to answer for that. Likewise, if a front-line worker doesn't follow the rules, he/she will have to answer for that - not for the implication of what following the rules may mean. Don't follow the rule and everyone should expect to suffer the consequences. That is just good order and discipline, not intimidation.

The operational performance bonus program was initiated in response to 1) the need to get US Airways back on solid operational footing after the many 2007 mis-steps (aka Kirby), and the fact that the 2008 economic outlook was bleak. So if you are the BOD or CEO and you see that your leadership team is going to take a substantial hit in their "at-risk" compensation due to forces beyond their control but you have a tremendous amount of work to do to get operations shored up so as to not make the financial condition of the airline worse, what do you do? Do you let unmotivated and under-compensated leaders just run the whole operation into the ground during an world-wide economic crisis, or do you bifurcate the bonus program so that a portion is still tied to financial performance but another portion is tied to operational performance which will, in turn, mitigate the potential damage of running a bad operation in the middle of a bad economy?

Executives and leaders who sign up for substantial "at-risk" compensation packages need to know that if they work hard and return excellent performance on the areas within their control, that they will be properly compensated for doing so. I personally think US Airways would have liquidated in 2008 if it were not for the remarkable operating turn-around that occurred with Robert Isom leading the charge. He re-established the D-10 rules and all other operational standards to achieve the company's goals which do in fact serve the customers. Those rules worked (still do) and the company is on a much better foundation because of operational rules and the bifurcated incentives helped focus and motivate leadership to not abandon ship in the middle of a economic tsunami.

 

[Phoenix]

......then stay out of the hotel Bar.

Oh, the drama.

No one cares to hear people whine in the bar. Telling people to stay out of the bar isn't any classier.

 

[SparrowHawk]

Honestly, short of firing every front line employee and starting over I don't know what else would work.

Way back when I was in good graces with the folks at CCY I had a very blunt exchange with an executive regarding employee morale. I told him point blank, "If you don't so something positive for morale you're going to win the battle but lose the war". His reply was equally blunt along the lines of "We don't have time to make nice we were hired to save an airline, I hear what you're saying but we don't have that luxury".

The above exchange goes a long way toward explaining why USAPA behaves as it does. Not a justification, merely an explanation. So given the historical backdrop how does one change the culture?? In the perfect world where employees have no memory you have to educate them. Explain why D-10 is important, get them to embrace it instead of fear it. In Sales and in my role as a trainer what you're trying to do has to pass the WIIFM test or you're wasting your time. WIIFM = What's In It For Me!

If you can clearly communicate your expectations. along with a solid reason why you can pass the overwhelming majority of the WIIFM tests out there and the agents will feel empowered and you'll spend less time micro managing and all of the cost associated with discipline in a union shop. The "dogs" who don't or won't eat the dog food can then find a new kennel as they have remained the problem and not the solution.

The challenge is that there is to much "history" and to damn many history teachers and you know there is no way in hell that DP and SK are going to spend 40 million on a change management program designed to alter US Airways culture to one more akin to WN.

So the answer is there is no easy answer and if you're DP and you're getting paid why should he give a crap about those below?

 

[Black Swan]

And at the end date everything became amendable.

So you have to negotiate your way out of LOA 93.

Nothing unfreezes.

SHAWK. The language in our contract with regard to FREEZE is explicit. Training Freeze- you don't negotiate your way out of it. You remain in your present state, until you are able to be trained, or complete the contractual time you are held. Equipment freeze- you are held on your equipment at the company s convenience, until you are not needed at your present position in base/equip. You are PAID, at what you hold if you have been awarded a higher paying equipment, you do not negotiate the raise. None of the terms of FREEZE have been used to imply you are held until you NEGOTIATE your way out. Kasher is aware of this, and was made aware of this if he forgot. All other terms of LOA 93 do not have this FREEZE language attached. You would be correct that they would have to be negotiated.

 

[BoeingBoy]

So the answer is there is no easy answer and if you're DP and you're getting paid why should he give a crap about those below?

I'd edit the bolded part to "if you're DP and you're getting paid an extra 80% of your salary as a bonus because of a policy to close the jetway door 10 minutes before departure".

Note: the 80% comes from a dim recollection that the 40% of the bonus is based on the trio of O/T, baggage, and complaints and the bonus can be up to 200% of salary. Anyone can feel free to correct me on that.

Jim

 

[CallawayGolf]

Honestly, short of firing every front line employee and starting over I don't know what else would work.

Way back when I was in good graces with the folks at CCY I had a very blunt exchange with an executive regarding employee morale. I told him point blank, "If you don't so something positive for morale you're going to win the battle but lose the war". His reply was equally blunt along the lines of "We don't have time to make nice we were hired to save an airline, I hear what you're saying but we don't have that luxury".

The above exchange goes a long way toward explaining why USAPA behaves as it does. Not a justification, merely an explanation. So given the historical backdrop how does one change the culture?? In the perfect world where employees have no memory you have to educate them. Explain why D-10 is important, get them to embrace it instead of fear it. In Sales and in my role as a trainer what you're trying to do has to pass the WIIFM test or you're wasting your time. WIIFM = What's In It For Me!

If you can clearly communicate your expectations. along with a solid reason why you can pass the overwhelming majority of the WIIFM tests out there and the agents will feel empowered and you'll spend less time micro managing and all of the cost associated with discipline in a union shop. The "dogs" who don't or won't eat the dog food can then find a new kennel as they have remained the problem and not the solution.

The challenge is that there is to much "history" and to damn many history teachers and you know there is no way in hell that DP and SK are going to spend 40 million on a change management program designed to alter US Airways culture to one more akin to WN.

So the answer is there is no easy answer and if you're DP and you're getting paid why should he give a crap about those below?

Such progrress. I think I agree with everything you just said, except for the last line about Doug not caring. I know I, along with a thousand horses, could never drag your deep seated feelings about Doug out of you so I won't even try. For what it's worth, I would probably support a culture change program at US. If successful it might just save the $40m cost, but that would be up to the BOD. Have you ever seen this work at such a heavily unionized and regulated environment?

 

[SparrowHawk]

I'd edit the bolded part to "if you're DP and you're getting paid an extra 80% of your salary as a bonus because of a policy to close the jetway door 10 minutes before departure".

Note: the 80% comes from a dim recollection that the 40% of the bonus is based on the trio of O/T, baggage, and complaints and the bonus can be up to 200% of salary. Anyone can feel free to correct me on that.

Jim

You're right I got lazy. Now off to Harbor Wine & Spirits for my evening of light reading courtesy of Cactusboy.

 

[BoeingBoy]

You're right I got lazy. Now off to Harbor Wine & Spirits for my evening of light reading courtesy of Cactusboy.

You might want to get two bottles of gin with tonic water to match - Lee's report by itself is 69 pages long. If you read everything, I'd conservatively estimate 500 or more pages, but I'd focus on the company filing for injunctive relief, Lee's report, the union's response, and the declarations of company and union personnel. Skip all the TRO and dismissal filings and responses since those two were stayed and denied respectively.

Jim