Southwest declining, JetBlue on the rise

[magsau]

ELP_WN_Psgr

They made that profit the old fashioned way - they earned it.

You mean they hedged it. Big difference.

Back then all the other airline employees were ridiculing the Southwest folks for working too cheaply.

Those years of cheap labor on the "backs" of the SWA employees is what disadvantage the other carriers.

they dumped their pension plan liabilities into the taxpayers' laps.

. I hate having to pay the pension default via my taxes but oh well.

I am sure the following tidbit from the PBGC.gov site might surprise. So no need to worry about your Tax dollars being spent to fund a UAL retirement. However, if you care to send me a check every month then by all means please do. Now I do get a feeling that MY tax dollars to fund many of the SWA passengers way of life. An SWA flight is akin to a public housing unit with wings.

Now for the surprise!
Money PBGC Takes In and Pays Out

PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.

 

[jbguppy]

magsau,
Dont hate the player, hate the game dude. Southwest cant help it if UAL offers an inferior product even after 2 years of BK.

SWA made a lot of money last quarter thanks to the fuel hedges, don't in any way ever confuse yourself into thinking it is because you have a quality product.

In fact people are willing to put up with your inferior product due to the alleged cheapness of your fares.

You do not offer a quality product compared to other airlines.

DING!!!

JBG

 

[sfb]

You mean they hedged it. Big difference.

Except...they would have made a profit with a better operating margin than UAL Corporation's pre-announced results even without the hedges.

Those years of cheap labor on the "backs" of the SWA employees is what disadvantage the other carriers.

So that explains why the average United employee now makes
roughly $15,000 less per year than the average Southwest employee, and why a topped-out 737 captain at WN makes more than a topped-out 747-400 captain at United, right?

And yet Southwest's non-fuel CASM (6.68 cents) is still lower than United's (8.03 cents), even with higher pay and shorter stage lengths at WN.

Now I do get a feeling that MY tax dollars to fund many of the SWA passengers way of life. An SWA flight is akin to a public housing unit with wings.

I guess all of the trailer trash/public housing residents must have gotten themselves computers with Internet access, then, given that Southwest sells 68% of its tickets via its own website -- and over 30% of their tickets are sold at full fare, to boot.

Now for the surprise!
Money PBGC Takes In and Pays Out

PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.

There's just one big ugly assumption here; that being that the PBGC will actually be able to absorb the obligations of the pension plans being dumped on it by UAL, US Airways, Delta, Northwest, etc. Right now, PBGC faces a huge deficit in its reserves, and it may, down the road, require a taxpayer-financed bailout not unlike what happened with the FSLIC in the mid-1980's.

The Street Walker Airlines is really classy. Perhaps you could become the offical airline of clear heels? Maybe have some ticket promotion tied to the number of tattoos a person has?

I was thinking that maybe United could have a promotion where they offer free upgrades to anyone who decides to poop on a beverage cart in the aisle. Or perhaps more heavily promote the high-quality service offered by regional partners such as Mesa and Trans States. They could even try to become the official airline of bankruptcy filers!

 

[magsau]

There's just one big ugly assumption here; that being that the PBGC will actually be able to absorb the obligations of the pension plans being dumped on it by UAL, US Airways, Delta, Northwest, etc. Right now, PBGC faces a huge deficit in its reserves, and it may, down the road, require a taxpayer-financed bailout not unlike what happened with the FSLIC in the mid-1980's.

An ugly assumption? Similar to the assumption you people don't like to talk about with regards to performance sans hedging?

I read with interest the fact that the labor cost for SWA was up around 5% YOY for Q2 and expected to increase. With labor cost on the rise (doesn't the f/a's start getting some significant pay raises soon?) and the percentage of hedging per year declining it will be an interesting road for SWA. Just hope there is enough road for them to operate on.

 

[sfb]

An ugly assumption? Similar to the assumption you people don't like to talk about with regards to performance sans hedging?

I'm happy to talk about performance sans hedging; Southwest would have had operating earnings of approximately $210 million in the most recent quarter absent hedging gains for an operating margin of around 8.6%. This is still substantially higher than United's pre-announced operating margin of 5.1% for the same quarter -- and United did some hedging of its own. Even if Southwest were paying full market prices for fuel, their costs would still be among the lowest in the industry.

I read with interest the fact that the labor cost for SWA was up around 5% YOY for Q2 and expected to increase. With labor cost on the rise (doesn't the f/a's start getting some significant pay raises soon?) and the percentage of hedging per year declining it will be an interesting road for SWA. Just hope there is enough road for them to operate on.

I suppose it remains to see seen if Southwest's employees are satisfied with the top pay rates in the industry. If we start hearing Dubinsky-like statements from any of the labor groups then yes, it is time to run for the exits.

 

[lostplanetairman]

I fly a lot. I won't fly two airlines ever again--United and AirTran. But I've flown SWA and it's fine. I got my seat up front that I wanted, told everyone that I needed to leave first to catch a connection and everyone helped me do that.

HR Diva

 

[jbguppy]

I fly a lot. I won't fly two airlines ever again--United and AirTran. But I've flown SWA and it's fine. I got my seat up front that I wanted, told everyone that I needed to leave first to catch a connection and everyone helped me do that.

HR Diva

Watch the series "Airline" and you will see a lot of people that will never fly SWA again. This happens at every airline, and no company can say that they don't have passengers who have negative experiences.

JBG

 

[wnbubbleboy]

Your right. We can not get ourselves to sink low enough in the food chain to compete for those SWA people. I suppose we all have standards. The Street Walker Airlines is really classy. Perhaps you could become the offical airline of clear heels? Maybe have some ticket promotion tied to the number of tattoos a person has?

Don't forget peircings, Doo rags or Mullets.

How about this for a new featured theme. It would say "SOUTHWEST AIRLINES OUR PASSENGERS CAN BE UP YOUR PASSENGERS"

 

[magsau]

Don't forget peircings, Doo rags or Mullets.

How about this for a new featured theme. It would say "SOUTHWEST AIRLINES OUR PASSENGERS CAN BE UP YOUR PASSENGERS"

You might have something there. I was flipping through the channels and thought I was watching "Miami Ink" when it was actually "Airline". Same thing happened when I thought I was watching "Cops" also.

 

[TWskyliner]

SWA made a lot of money last quarter thanks to the fuel hedges, don't in any way ever confuse yourself into thinking it is because you have a quality product.

In fact people are willing to put up with your inferior product due to the alleged cheapness of your fares.

You do not offer a quality product compared to other airlines.

DING!!!

JBG

I just flew on Southwest last weekend from STL to FLL and back for the first time. I didn't experience anything inferior to any other airlines. On the contrary..it was nice to see people obviously enjoying thier jobs and above all being helpful and courteous to their passengers. The flight attendants were outstanding and never stopped working. I will definatly choose Southwest in the future..as opposed to my other option in St. Louis.

 

[KCFlyer]

You might have something there. I was flipping through the channels and thought I was watching "Miami Ink" when it was actually "Airline". Same thing happened when I thought I was watching "Cops" also.

You know, last time I checked, a guy with tattoos or mullets had money that spent just as well (and went to the bottom line just as well) as a more refined person who might poop on a serving cart. I think you missed his point mags - THEIR money could be YOUR money.

 

[magsau]

You know, last time I checked, a guy with tattoos or mullets had money that spent just as well (and went to the bottom line just as well) as a more refined person who might poop on a serving cart. I think you missed his point mags - THEIR money could be YOUR money.

But with the FBI tracking the numbers on the money for counterfiting and drug resin it might just be confiscated in the near future as part of an investigation.

As for tattoos and mullets we have a service for them also. It is called "TED". The ORD gates are referred to as TEDTUCKY and generally the clientele would interchange well with what I see on the SWA TV show.

I suppose we could start flying livestock in the cabin. I am sure there is someone out there willing to buy a ticket for their swine or poultry. Are we turning our back on a market segment by not doing so? KC, people that fly SWA are the same people shopping Walmart for the perceived low price. Many programs have aired showing Walmart is not always the lowest cost but you have a segment of society that tend to yell "Earnhardt at every chance and think SWA is the cheapest ticket in town. SWA has done an excellent job of marketing itself to this section of society.

They have hit their niche. Also, this segment of population tends to birth more children to families that fit these market segments. It might just be an ingenious move, babies being born into SWAish style is a scary but true happening. However, I would prefer not to sit next to someone like this for hours on end to only pay MORE for my ticket than on a regular carrier.

 

[KCFlyer]

However, I would prefer not to sit next to someone like this for hours on end to only pay MORE for my ticket than on a regular carrier.

Send your "Tedtucky" residents on over to Southwest - they'll welcome their money. And those lower fares on a real airline are, and will continue to be, brought to you by future concessions from the workforce. Brilliant move, if I do say so myself.

 

[magsau]

S And those lower fares on a real airline are, and will continue to be, brought to you by future concessions from the workforce. Brilliant move, if I do say so myself.

Brought to you actually by airlines like SWA that do not have Defined Benefit plans, employees willing to gut traditional staffing and hours and in many cases willing to break FAR's but I digress. So to compete and profit the rest of the carriers had to adjust to the lowest common denominator. Ding! Guess who that is.

It is a cycle and with any luck the cycle will swamp the boats of the corn dog airline.

 

[KCFlyer]

So to compete and profit the rest of the carriers had to adjust to the lowest common denominator. Ding! Guess who that is.

United?