Southwest's Problems Parallel Us Airways

[FM2436]

An interesting Q&A with Southwest's new CEO. Sounds Southwest is having problems similar to everyother airline including US Airways.

http://yahoo.businessweek.com/bwdaily/dnfl..._8961_db008.htm

 

[Prince of PAWOBs]

From the news article:

Q: So how do you do that?
A: Productivity, productivity, productivity.

From what I read in that article, this is the statement that shows the difference between Southwest and US. Productivity is how they plan to find the cash to pay for the FA's, not fare increases.

No wage concessions here. Southwest is still all about the people that work for them. If US were pro-employee, it would find a way to do the same thing and not alienate work groups at the same time.

 

[funguy2]

Yes... every airline is facing the same environment revenue environment, fuel costs (outside of hedges), etc... That is no surprise...

The differences are the solutions to those challenges... Southwest has a history of finding unique, successful, and profitable solutions.

 

[wings396]

Yes... every airline is facing the same environment revenue environment, fuel costs (outside of hedges), etc... That is no surprise...

The differences are the solutions to those challenges... Southwest has a history of finding unique, successful, and profitable solutions.

Without taking it out of their employees pockets..........
Sad to say, that is the ONLY way this company know how to cut costs. After 2 rounds, you would hope they had a plan already.....OH Yes they do, round 3...and 4...and so on.

 

[local 12 proud]

unhappy emplyoee's = unhappy customer's!!!!!!!!!!!!!! southwest figured this one out eons ago.

 

[deltawatch]

WN will face the Wall Street cycle in a few years; investors invest in new upstart airlines that are hiring kids off the street.

When their route map starts to mature, when its workers start reaching respectable pay levels, as employees start taking advantage of their healthcare benefits, they bailout of the stock and watch the company go under sending all of its 40 and 50 year old employees to the street.

They reinvest as fast as they can in the next player, continuing the cycle, making sure the employees of the older airline never receive the fruits of their labor.

Why invest in a company (WN, U, DL, AA, UA etc.) that’s honoring its commitment to career employees. When you can dump them and make more bogus promises to a bunch of new hires working at Virgin America.

Cooperate America (Wall Street) has found a way to dump all retirement and healthcare on the government. Social Security and Medicare will not survive it.

Warning to all employees at JetBlue, Virgin America, AirTran you will not enjoy the top of your scale for long, the cycle will see to that .... :down:

 

[mweiss]

believe it or not, deltawatch, seniority is not even close to the most significant reason for the difference between US and WN. If every union employee at US were working at new-hire wages, WN would still be moving people around for less.

 

[WestCoastGuy]

The same holds true for US. If every union worker were working at the new hire rates, this mgmt team would still loose money or squander away and revenue. They have NO CREDIBILITY or RESPECT from most of us. Corporate Greed, Corporate stupidity, Corporate Ignorance is the base of all this company's problems.

 

[deltawatch]

What Im talking about has nothing to do with Lakefield. And it's not limited to this industry. Think about it ......

 

[mrfish3726]

WN will face the Wall Street cycle in a few years; investors invest in new upstart airlines that are hiring kids off the street.

When their route map starts to mature, when its workers start reaching respectable pay levels, as employees start taking advantage of their healthcare benefits, they bailout of the stock and watch the company go under sending all of its 40 and 50 year old employees to the street.

Deltawatch,

This isn't a very true statement for folks that have already been furloughed at major carriers in the past 3 to 4 years. There is still plenty of old talent out there to fill many of the jobs at all the LCC'S. Here at Frontier 50% of the work force is over 40 years and older. We have no age bias as to who gets hired, we only look for the best, and there are plenty of good experienced people out there.

 

[Whadayano]

Deltawatch,
Not to pile on, but I also disagree. WN has been around 35 years plus and now has the highest pay rates of any airline in the US for every workgroup, period (I even think its true vis a vis Delta for 737 pilots with the same seniority--and if not, will be after your pilots settle). Yes their average seniority is lower; they didn't furlough any junior people. But the differences are all in work rules, turn times, training costs. They average 87 employees a airplane, roughly a third lower than any legacy airline. That's what we mean by productivity.

 

[mweiss]

That's all true, but what happens if (when?) some other airline gets WN's efficiency, and pays HP's wages? They'll certainly beat WN in head-to-head competition.

This is the reason that successful airlines in the future will differentiate on more than price. Price is always a losing proposition for most in a competitive environment; it's why it's often said that you can't out-Wal-Mart Wal-Mart.

 

[Whadayano]

Oops--I just checked Delta 737 NG pay rates against Southwests and Deltas are roughly 25% higher than WN's, even after profit sharing (converting trips to hours, which may be slightly off) for a 12 year pilot. But if Delta is to stay out of bankruptcy I think they will have to at least match.
MWeiss, I think that it would be pretty impossible to duplicate WN today--there just aren't as many markets you could get big in. And if it was so easy to duplicate, where are all those competitors?

 

[insp89]

Deltawatch,
Not to pile on, but I also disagree. WN has been around 35 years plus and now has the highest pay rates of any airline in the US for every workgroup, period (I even think its true vis a vis Delta for 737 pilots with the same seniority--and if not, will be after your pilots settle). Yes their average seniority is lower; they didn't furlough any junior people. But the differences are all in work rules, turn times, training costs. They average 87 employees a airplane, roughly a third lower than any legacy airline. That's what we mean by productivity.

Whadayano, - Question- You mentioned Southwest has 87 employees per airplane, Kinda interested if this figure includes the "third party maintence" employees that work on Southwest's aircraft, [even though they are not actually Southwest employees]. ?

 

[BoeingBoy]

I've always argued that the "head count" issue is not appropriate. The head count is driven more by the operating model than by anything else. Sure, there are training issues but that's primarily for the pilots who are a small percentage of any good-sized airlines employee roster. There are vacation, disability, sick time issues as well with an older, more senior work force. But not having 25 to 40 airplanes sitting on the ground at the same time at multiple hubs sure does a lot to decrease your employee head count per airplane. As does running 8 - 10 flights per gate. As does not having a leasing arm, an express operation, etc.

Jim