Required Reading

[MerlinMagician]

Intresting article I came across. This ought to get some responses. Read This

 

[N628AU]

From the right hand side of the article, second paragraph under the bar graph:

"One reason for this is the more efficient use of labor"

This is doing more with less people. This means layoffs, more than anyone has experienced yet. Will the unions stand to let some members go, if means saving the rest, even possibly without wage reductions? For example, would the IAM let the company combine ramp and utility, even if it meant furloughing most of one of those work groups? Would the other unions allow for eliminating waste?

Past history leads me to think not.

 

[FM2436]

Intresting article I came across. This ought to get some responses. Read This

Interesting yes. But the author doesn't mention Southwest's business model of point-to-point service between a relative few, but large markets carrying a larger number of passengers between those relative few, but large markets.

There's a message post on this same US Airways web board titled "Discontinue Service Pit begins" were poster are bashing management because management is discontinuing service into markets were Southwest, and other LCC, would never choose to operate from. Remember, Southwest flies operates from only 60 airports. US Airways and Express operate from many more.

 

[jack mama]

Southwest has no heavy mtc - just like the company is asking of the IAM
and Southwest's pilot are a productivity based pay scale.

you're not comparing apples to apples.

compare IAM represented employees/asm or whatever to Southwest.

 

[700UW]

Southwest has no heavy mtc - just like the company is asking of the IAM
and Southwest's pilot are a productivity based pay scale.

you're not comparing apples to apples.

compare IAM represented employees/asm or whatever to Southwest.

Wrong WN does have some heavy maintenance.

They do their own C-checks in-house and 1/4 D-checks.

They have a wheel and brake shop also and some other component maintenance.

They do outsource most of their heavy, but they are slowly bringing it back in-house.

They have heavy at LUV field and C-check lines at PHX also.

 

[700UW]

http://www.forbes.com/services/2004/07/19/...yahoo&referrer=

 

[mweiss]

From the article:

Other network carriers, such as US Airways, which
went through one bankruptcy and are now screaming
for more concessions from labor, had the highest nonlabor
unit costs of the 12 U.S. carriers in the study.

What they don't say is that US Airways also has among the highest labor unit costs of the 12 carriers in the study.

It's a floor wax and a dessert topping!

 

[mweiss]

http://www.forbes.com/services/2004/07/19/...yahoo&referrer=

About half of the suggestions in there were awful. Three were various ways of saying "increase government subsidy."

 

[usair_begins_with_u]

Never thought I'd be saying this, but Piney hit the nail on the head.

 

[mweiss]

Kind of like Wal-Mart vs Nordstrom.

I know I use that analogy a lot, but I really think the sweet spot is more in the Macy's stratum than the Nordstrom stratum.

 

[DCAflyer]

From the right hand side of the article, second paragraph under the bar graph:

"One reason for this is the more efficient use of labor"

This is doing more with less people. This means layoffs, more than anyone has experienced yet. Will the unions stand to let some members go, if means saving the rest, even possibly without wage reductions? For example, would the IAM let the company combine ramp and utility, even if it meant furloughing most of one of those work groups? Would the other unions allow for eliminating waste?

Past history leads me to think not.

Last December I posted the following:

Posted on: Dec 18 2003, 02:41 PM

Replies: 50
Views: 2,156 Okay, let's play with this. I did a little quick research and I will throw out some raw data comparisons between US AIRWAYS and SOUTHWEST. I don't have time to analyze this this morning, but I will tell you what I found and perhaps we collectively can figure out what management has been unable to do so far. I suspect they have used some of the same data I am presenting here, but are manipulating it in such a way that benefits them.

US AIRWAYS has:
28,381 Employees
279 Aircraft
40,612 revenue seats
145.6 average seat count per A/C
43.3% of fleet is Airbus, supposedly more cost-efficient than Boeing

The above equates to: 102 employees per A/C and 0.7 employees per revenue seat.

SOUTHWEST has:
35,000 Employees (approx.)
381 Aircraft
51,432 revenue seats
135 average seat count per A/C
All Boeing fleet, supposedly less cost-efficient than Airbus

The above equates to 92 employees per A/C and 0.68 employees per revenue seat.

A couple of more facts on the LUV website: LUV's average fare is $86.23. What is U's?

LUV's average trip length is 729 miles. What is U's?

My quick conclusion, when you look at headcount per available seat (the criteria management keeps throwing in our faces), is that we are VERY MUCH on par with LUV. Of course our headcount per A/C is higher because we have larger planes.

 

[mweiss]

Well, pulling out my handy-dandy Excel workbook from the spring, I find the following numbers for 2003 (OK, technically Q4 2002 - Q3 2003):

US RPM: 37.8B
WN RPM: 48.0B

US ASM: 51.6B
WN ASM: 71.9B

So the average number of miles a seat moves per year on US is 51.6B ÷ 40,612 seats = 1.27M miles (that's a lot of miles!)

On WN, it's 71.9B ÷ 51,432 = 1.40M miles!

WN flies each seat an average of 10% further than US.

Similarly, looking at employees per million ASM, you can see
US 28,381 ÷ 51,600 (which is a millionth of 51.6B) = 0.55
WN 35,000 ÷ 71,900 = 0.49

WN needs 11.5% fewer employees to move a million seat miles.

Oh yeah...average fare that I showed was $79.38 for WN, $165.91 for US.
Average stage length: WN 642, US 916.

 

[BoeingBoy]

Pure and simple, Southwest has a business model that makes productive use of ALL assets - labor and non-labor. Hence their low cost per ASM in both catagories.

US, on the other hand, has a business model that uses all assets - both labor and non-labor - inefficiently, and the effects of the inefficient business model were magnified by 25% shrinkage in the post-911 environment. Hence our high cost per ASM in both catagories.

Management has been trying to increase efficiency by "doing more with less people" since 911 - how many of the people that have left since then have been replaced (not counting upper management). We carry more passengers further and produce more ASM's than when we emerged from bankruptcy. The result of this means of being efficient - basically nil, since our CASM is pretty much the same.

Jim

 

[cavalier]

Southwest has no heavy mtc

WN/LUV does indeed do heavy maintenance. In fact they do even heavier checks than we do. I KNOW because I was there and talked to the mechanics doing it. For further confirmation go to the WN board and ask.

 

[The Truth]

The legacy carriers will have to deal with the challenges that include fuel, high labor costs, aircraft utilization, fleet size and uniformity, Internet distribution and pricing strategies. Labor costs are only one constituent of the enigma. Labor costs at the legacies are at least twice as high as the discounters. Unions benefited from the growth during the late 90’s to negotiate favorable contracts that increased labor costs to unparalleled levels. The LCCs have changed the game and labor contracts must coincide with the LCCs. This is why I expect that all labor contracts will change -with or without- the employees participation. ALPA, CWA and AFA are heading in the right direction.