Superior Management

[BoeingBoy]

Superior Management Puts Best Companies Ahead of the Competition
Aviation Week & Space Technology
07/05/2004, page 42

Anthony L. Velocci, Jr.
New York


Staying Ahead Of the Competition

As airlines and aerospace/defense companies continue to struggle through uncertain times and battle powerful market forces, it may be comforting to know that those who have done a superior job of managing their resources stand out from their competition. For that matter, so do organizations that have built reputations for disciplined growth and strong operating cultures.

Case in point: carriers and aerospace contractors that rose to the top of Aviation Week & Space Technology's Top-Performing Companies study for 2004. (Aviation Week's resource partners in the project were CSFB HOLT, a division of Credit Suisse First Boston, and AirWatch Report, a unit of Aviation Forecasting & Economics Inc.)

Some of the names no doubt will resonate with many Aviation Week readers. Among large aerospace/defense companies, General Dynamics Corp. ranked No. 1--for the third time in three of the last four years. But the study, also known as the Index of Competitiveness, is the kind of rigorous analysis in which highly entrepreneurial names can emerge from relative obscurity, globally speaking.

Two such organizations came into sharp focus, backed by some impressive performance figures. Ranked at the top of the medium-size category of companies is Bharat Electronics Ltd. (BEL), headquartered in India. The defense electronics designer and manufacturer is a perennial award-winner for research and development in a country that's rapidly acquiring a worldwide reputation for engineering excellence. In the No. 1 position in the small-company category is Invision Technologies, whose explosive-detection systems are in high demand around the world.

As part of the study, Aviation Week and CSFB HOLT examined which ones improved their overall operating performances the most between 2002 and 2003, the last fiscal year for which data were available. Honeywell International and Raytheon Co.--two of the industry's biggest names--ranked No. 1 and No. 2, respectively, in improvement over the two-year period. What's noteworthy is that both have labored in recent years to regain momentum following setbacks of one kind or another. The question is whether they can sustain their improved performances.

Top-ranked airlines fit much the same profile as the best aerospace/defense contractors, with two of the three carriers illustrating that even in commercial air transportation--as treacherous a marketplace as exists--solid performances can be quantified and measured. Among large carriers, the No. 1 player is steady-as-she-goes Southwest Airlines, which makes the business of running a major carrier in good times and bad look deceptively easy. The top-ranked medium-size airline is Cathay Pacific, based in Hong Kong, and top honors in the small-airline category go to none other than Ireland's Ryanair Holdings plc--for the fifth time in the last six years. Among cargo airlines, United Parcel Service beat out FedEx for the top spot.

To learn what drove each of these aerospace and airline businesses to the top in this year's study, see the stories beginning on p. 56.

There is no way to predict which companies will rank at the top in 2005, of course, but this much is certain: Growth per se is not synonymous with value creation, and execution--in good times and bad--is still the name of the game.

[The stories mentioned in the next to last paragraph to follow - Jim]

 

[BoeingBoy]

Top-Performing Companies
Highest Ranked Airlines Share Common Traits
Aviation Week & Space Technology
07/05/2004, page 52

James Ott
Cincinnati

Agile management, tight control over spending and a keen eye for opportunities serve carriers well, despite a challenging environment

The four airlines ranked uppermost in the 2004 Top-Performing Companies competitiveness study share more than a few common characteristics.

In 2003, a year of instability and reorganization for the industry that evoked swift and fundamental changes in the marketplace, the four winning carriers clearly outperformed their peers. In most cases, the winners added capacity and entered new markets, frequently at the expense of weaker competitors. They produced profits in what was for most rivals a losing year. They managed their debt and created wealth for shareholders. Balance sheets remained strong.

The top performers among the 39 carriers analyzed are:

*Southwest Airlines for large airlines.

*Cathay Pacific Airways for medium airlines.

*Ryanair Holdings plc for small airlines.

*United Parcel Service for cargo carriers.

In brief, the four air carriers took high honors because they "executed against their own business plans in a superior manner," says Michael K. Lowry, the chief analyst for the study and producer of AirWatch Report, a publication that offers detailed financial analyses of the world's principal airlines.

Each winning carrier in 2003 generated large volumes of cash. Management used the cash to pay down debt, reduce interest payments and strengthen balance sheets. In all but one case, the airlines were able to grow by adding capacity or through acquisition. Each remained strong financially.

In contrast, the industry as a whole is swamped with debt in the U.S., which makes any attempt to grow more costly--and risky.

All of the top-ranked airlines were strong cash generators in 2003, with Ryanair a veritable money machine. Fundamentally, it is a validation of the carriers' business models.

The year ahead promises severe tests of all carriers. Competition is increasing, and traffic is growing and comparing positively for the first time with traffic recorded in 2000. Some industry observers are beginning to question whether the carriers should expand to the high level they have planned.

In the analysis of large carriers, Southwest by far achieved the top-performer rank in its peer group. It posted the highest scores in operational performance. Its financial condition ranked at the top of all 39 carriers analyzed. The airline has sufficient cash to fully retire all debt related to the balance sheet.

The Irish airline Ryanair bested Southwest in the cash category. It has more cash than any kind of debt, on or off balance sheet.

Southwest has been adding capacity at a 5% annual rate since 2000. The cost per available seat mile (CASM) has remained flat for the four years. In 2003, operating profits grew at a 17% faster pace than revenues, a strong indicator of efficient operations.

The weak economy and growing competition has had its impact on all airlines, including Southwest. The key measure that indicates pricing power, revenue per available seat mile (RASM), declined at Southwest over the last four years. But it increased 3.8% in 2003 over 2002.

As Merrill Lynch analyst Michael Linenberg pointed out in a June report, the discount airlines now represent 25% of U.S. domestic capacity and act as price leaders in 90% of these domestic markets. The impact has kept ticket prices competitive in most areas of the nation. This pricing power has stymied attempts by the large network carriers to increase fares, exacerbating the plight of any airline saddled with high costs and traditional labor contracts and work rules.

In an expansion this year, Dallas-based Southwest moved in strength at Philadelphia, which became its most successful new market in its history. This kind of move at the US Airways' hub at Philadelphia International Airport reflected a new confidence and strategy of attacking weakened network carriers even in their strongholds.

The one exception among the four, in terms of capacity growth only, was Cathay Pacific, which took top honors in the medium-airline category. The Hong Kong-based airline reduced capacity in 2003 by 6%. The reduction came about as management revamped the carrier's route structure, acting quickly in a bold response to the severe acute respiratory syndrome (SARS) crisis that afflicted some of its key Southeast Asian markets. Despite the reduced capacity, Cathay produced revenues of $3.79 billion and a 2003 profit.

Net debt basically is a measure of the cash a company has on hand in relation to its debt. At the four top-ranked airlines, this measure reflects a picture of strong financial health compared with each carrier's peer group. They have used their strong cash generation to strengthen their balance sheets and grow their operations, even in one of the most difficult operating environments on record.

In the medium-airline category, Cathay scored highest among eight carriers and just ahead of two other Asian operators, Air New Zealand and Thai Airways International.

Lowry gives credit to Cathay Pacific management for responding quickly to the SARS crisis and surviving in what would have been a financially devastating loss year for most other airlines. The carrier's strong financial position and low debt served it well.

In spite of the SARS threat, Cathay Pacific continued to generate cash. It increased its cash on hand from $1.691 billion at the end of 2002 to $1.957 billion at the end of last year. That is enough cash to continue operating for 215 days without earning another dollar in revenue.

Compared with the weakness seen in stockholders' equity at many U.S. airlines, Cathay's stockholders' equity position is, in contrast, strong. It is equal to 41.4% of total assets.

Cathay Pacific has demonstrated its resilience against outside forces. One area of vulnerability is its geographic concentration in Southeast Asia. Legacy carriers in that region are coming under increasing pressures from rising discount carriers. With its Hong Kong base, Cathay Pacific would also be vulnerable to any distress from China's economy as that country seeks to engineer a soft landing from excessive levels of business activity.

In the small-airline category, Ryanair's financial strengths have allowed it to triple seat capacity since 2000. Last year, capacity increased 44% over 2002. During this period, the Irish carrier's operating profits have been soaring. Ryanair is not only expanding, it is getting more from its revenues at an accelerating pace. The rate of growth of operating profits, compared with revenue, grew 3% in 2001, 11.6% in 2002 and 19.8% last year.

Notwithstanding its rapid growth rate, Ryanair improved the efficiency with which it utilized its assets, as well as its overall productivity in 2003, compared with 2002. On the basis of revenues produced by employees, Ryanair's employees also remained the most productive of all the airlines surveyed. As a low-cost producer, it falls behind only JetBlue.

UPS outscored the few public companies in the cargo category but the number included its chief rival, FedEx Corp.

The strongest cash generator of all carriers in the study, UPS, ended 2003 with nearly $4 billion. The figure, including marketable securities, was $4.6 billion at the end of the first quarter. That was nearly triple the $1.6 billion recorded at the end of 2001. At the end of 2003, total equity was $14.852 billion against $5.272 billion debt.

UPS was one of a handful among the 39 airlines that returned value to shareholders.

 

[BoeingBoy]

Cash Shapes Southwest's Success
Aviation Week & Space Technology
07/05/2004, page 59

David Bond
Washington

Southwest aims for 15% return on assets, and gets it most of the time

Where Cash Is King

Ten days from now, on July 15, Southwest Airlines will announce that the second quarter of 2004 was the 53rd quarter in a row in which it turned a profit. Almost certainly, this profit will have been great enough to send cumulative operating earnings since the terrorist attacks of September 2001 past $1 billion.

There's a formula at work here. High utilization of assets--airplanes--generates many flights and high revenues, even with low fares. Low costs mean profits nonetheless, which build up cash. At the end of the first quarter, Southwest had $1.8 billion in cash, more than enough to retire all the debt on its balance sheet.

Southwest's objective is to produce more cash with fewer assets, according to Mike Van de Ven, the carrier's vice president for financial planning and analysis. Its target over the years has been for profits before taxes to reach 15% of assets, including capitalized off-balance-sheet aircraft leases. Before September 2001 the company attained this ratio regularly and sometimes exceeded it. In 2002 and 2003, revenues were under pressure and this return slipped to 7-8%. Van de Ven says Southwest expects to get back to 15% during the next couple of years, as the economy improves.

Like smaller low-cost carriers, Southwest has continued to grow since 2001. Historically the carrier has tried to increase available seat miles by 8-10% per year, Van de Ven says, and it is targeting 7% for the rest of 2004 and 10% in 2005.

CEO Jim Parker acknowledged last month in a Merrill Lynch conference that Southwest has managed its money conservatively since the terrorist attacks. Sept. 11 "changed the world in terms of how much cash everybody wants to have on hand. We probably have a little bit more than we need right now."

As Southwest adds a net of 29 aircraft to its fleet this year, capital spending probably will end up at about $1.8 billion, Parker estimated. Most of it will be paid from cash, and Southwest will finance about $560 million, most of it unsecured. "The cash on hand gives us a lot of flexibility," Parker said. "There is a bit of a cost associated with that, and we recognize that. But I think we're in a situation where probably for the foreseeable future we're going to be carrying more cash than we would have before 9/11." The year-end target will be about $1.5 billion.

 

[BoeingBoy]

How Study Was Done
Aviation Week & Space Technology
07/05/2004, page 52

Anthony L. Velocci, Jr.
New York


The goal of Aviation Week's & Space Technology competitiveness study is to gauge how well the world's publicly traded airlines and aerospace/defense companies employ their resources in their quest for capital-efficient growth.

For aerospace/defense contractors, the methodology used to compute the rankings for 2004 is based largely on CSFB HOLT's cash-flow-return-on-investment (CFROI) framework, a proprietary valuation model used by about 5,000 money managers and nearly 600 investment firms worldwide. CFROI measures a company's internal rate of return achieved on total operating assets. Sales growth, operating margins and asset efficiency are key factors.

The CFROI framework corrects for many common distortions found in traditional accounting, such as goodwill, allowing Aviation Week and its resource team to compare like companies. Contractors are divided into three categories: large (revenues greater than $4 billion), medium (less than $4 billion) and small (less than $500 million).

Raw information for the analysis was compiled from companies' most recent fiscal results covering all or part of 2003, based on information provided by the CSFB HOLT database and its vendors worldwide. Each performance measure--operational performance, strategy and financial health--is comprised of ratios widely associated with superior performing companies. Independent research and development was included as a fourth measure to gauge how much of companies' own resources they're willing to invest in their future. To put it another way, are they content to milk their businesses, or do they see new product and technology development as vital to future growth?

The four performance measures and accompanying ratios were weighted according to their relative importance. Individual components were scored on a scale of 1-5. Actual rankings are based on the cumulative score.

For the airline rankings, AirWatch Report developed the methodology. AirWatch Report is a unit of Aviation Forecasting & Economics Inc. and an independent consultancy that uses proprietary business models to measure airline solvency and assessments of management performance.

The framework included selection of multiple financial and operating ratios that met the study's predetermined performance criteria and are generally accepted within the airline industry. Each ratio was calculated approximately 300 times from a representative sampling of airlines listed in Standard & Poor's, part of The McGraw-Hill Companies, and AirWatch Report financial databases. A 15-year operating period was used to extract the test ratios covering fiscal years 1989 through 2003.

Airlines and their corresponding test ratios were then grouped into three separate classes based upon the nature of their respective operations. Test ratios were grouped by performance measure and assigned a score ranging between 99 (highest) to 1 (lowest), based upon each ratio's relative performance to the specific airline within the 15-year sample that generated the best ratio result. Performance measures were subject to the same computation, using the summed values of the relative ratio scores and then weighted according to results of an Aviation Week survey of airline executives.

Weighted results of the three performance criteria were summed and a final set of relative values computed for each airline. All of the test ratios used to build the preliminary airline scores were subject to a dynamic regression analysis. This procedure identified ratios that most closely predicted the preliminary values. As a result, this year's tabulation of total scores carries a statistical fit to the 15-year test sample of 99%.

Airlines were grouped by revenues--large (revenues greater than $4 billion); medium (less than $4 billion), and small (less than $1 billion)--and ranked according to their total scores.

 

[BoeingBoy]

Top-Performing Airlines Scored
Aviation Week & Space Technology
07/05/2004, page 54



Basis of rankings: Rankings are based on the sum of scores computed for ratios that support the three weighted airline performance measures (see notes on p. 57). The higher the cumulative score, the higher the ranking. Numerical results for performance measures are presented as percentiles within each peer group spanning 15 years. The percentiles are presented to define relative airline performance and facilitate comparisons with other carriers. Performance measure percentiles will not sum to total score results. Airlines are ranked only on the basis of their peers.

Aviation Week's Top-Performing Airlines Rankings
RANK / COMPANY / TOTAL SCORE / OPERATIONAL PERFORMANCE / STRATEGY GROWTH / FINANCIAL HEALTH / 2003 REVENUE ($ millions)
Top-Performing Large Airline
1 Southwest Airlines 85.8 81.8 82.9 97.1 6,000
2 Singapore Airlines 84.7 46.1 84.6 96.5 6,000
3 Qantas Airways 84.4 51.9 76.1 87 6,300
4 Lufthansa 77.1 59.1 49 88.6 18,000
5 British Airways 74.6 68.7 65 81.4 12,100
6 All Nippon Airways 70.5 64.5 77.1 73.4 10,800
7 Northwest Airlines Corp. 62.4 58.1 76.8 36.7 9,500
8 SAS AB 62.3 47.2 54.1 63.4 7,200
9 Continental Airlines 59.4 45.8 67.8 59.7 8,800
10 Japan Airlines System 55.4 35.9 52.5 75.9 17,100
11 KLM Royal Dutch Airlines 54.7 36 63.5 71.2 7,000
12 Delta Air Lines 49.6 43.2 53.5 48.3 13,300
13 AMR Corp. 48.4 39.1 47.5 51.5 17,400
14 United AirLines 25.8 7.5 26.3 48 13,700
15 Air Canada 14.5 18.2 1 33.5 6,500
Median 62.3 46.1 63.5 71.2
Top-Performing Medium Airline
1 Cathay PacifiC 85.9 85.4 82.1 93.4 3,800
2 Air New Zealand 85.1 85.6 68.6 86.9 1,800
3 Thai Airways 84.3 76.2 89.7 84.2 3,000
4 EasyJet 70.2 45.7 78.5 86.9 1,500
5 Expressjet Holdings 42 44.2 74.4 42.5 1,300
6 Alaska Air Group 33.3 37.6 33.6 40.4 2,400
7 America West 32.5 40.1 42.2 31.9 2,300
8 ATA Holdings Corp. 24.3 31.5 38.1 21.3 1,500
Median 56.1 45 71.5 63.3
Top-Performing Small Airline
1 Ryanair Holdings plc 85.3 85.3 86.5 84.7 900
2 World Airways 72.3 64.1 83 63.1 500
3 Independence Air 49.5 41.3 71.6 54.5 900
4 JetBlue Airways 45.8 39.3 57.3 55.4 1,000
5 Westjet Airlines 45.4 32.9 51.8 80.1 600
6 Skywest Inc. 44.4 38.4 61.7 60.4 900
7 AirTran Holdings 43 49.9 60.8 49.9 900
8 Pinnacle Airlines 37.5 40.6 86.6 13.1 500
9 Mesa Air Group 34.4 34.3 60.7 41.9 600
10 MAIR Holdings 34.1 32.6 48.8 52.4 500
11 Midwest Air Group 28.7 27.8 32.7 46.3 400
12 Frontier Airlines 18.3 15.4 15.6 38.2 500
13 Great Lakes Aviation 12.6 38.7 57.7 1 100
Median 43 38.7 60.7 52.4
Top-Performing Freight Airline
1 United Parcel Service 89.6 87 72.7 96.5 33,500
2 FedEx Corp. 85 51.5 64.2 86.9 22,500
3 AirNet Systems 44.5 46.1 37.4 88.8 100
Median 85 51.5 64.2 88.8

Notes:

-- Performance measure categories (with numerical and percentage weightings) and supporting ratios are as follows:

OPERATIONAL PERFORMANCE (14.5, 38%) -- Operating cash flow to direct operating costs, basic defense interval, days cash, gross and net asset turns and return on productive assets.

STRATEGY/GROWTH (16, 42%) -- Debt equity, fixed charge, interest and principal covers, cash generation margins, working capital and employee turns, and return on equity.

FINANCIAL HEALTH (7.9, 20%) -- Gross cash flow to debt; net debt to common equity; retained earnings, working capital and cash flow to gross assets.

-- Raw information for the Index of Competitiveness is provided by Standard & Poor's Compustat, a division of The McGraw-Hill Companies, and AirWatch Report.

-- Calculations are based on the most recent fiscal operating results reported for the period ended December 2003.

-- Airlines whose state ownership exceeded 60% or carriers that completed reorganization during 2003 following bankruptcy proceedings were excluded from the study.

*Not meaningful

 

[BoeingBoy]

Most-Improved Airlines Scored
Aviation Week & Space Technology
07/05/2004, page 55



Basis of rankings: For 2002 and 2003, total scores are computed from ratios supporting the three weighted airline performance measures. "Most-Improved" rankings are based on the overall change of total scores between 2003 and 2002. Changes to performance measure percentiles are also presented.

MOST-IMPROVED
2002 TO 2003 RANK / COMPANY / TOTAL SCORE / ASSET UTILIZATION / PRODUCTIVITY / FINANCIAL HEALTH
Most-Improved Large Airline
1 AMR Corp. 102.6 21.5 NM* 226.8
2 Northwest Airlines Corp. 74.2 72.7 95.8 147.4
3 United AirLines 34.3 62.9 29.2 105
4 Continental Airlines 22.3 6.6 31.1 41.1
5 All Nippon Airways 21.2 1.2 34.1 30.4
6 British Airways 18.9 15.6 17.4 56.9
7 Delta Air Lines 18.6 -7.4 43.1 47.9
8 Southwest Airlines 2.3 5.9 12.6 7.8
9 Singapore Airlines 0.1 1.1 24 -4.2
10 Qantas Airways -1.9 1.6 -10.9 77.3
11 SAS AB -8.5 -10.4 -28.9 -20.1
12 Lufthansa -11.4 0 -35.2 -31.1
13 KLM Royal Dutch Airlines -16.9 -15.3 43.7 -27
14 Japan Airlines System -17.7 9.3 -20.5 -26.2
15 Air Canada -70.4 -14.6 -98.5 -49.4
Median 2.3 1.6 20.7 30.4
Most-Improved Medium Airline
1 ATA Holdings Corp. NM* 146.7 233.8 NM*
2 America West 782.8 176.5 NM 460.4
3 Alaska Air Group 35.4 17.1 93.2 30.7
4 Expressjet Holdings 2.2 -16.3 2.4 -1.8
5 Air New Zealand 0.3 -9.6 133.1 -4.7
6 Thai Airways -0.9 -2.3 6.3 -9.6
7 Cathay Pacific -4 -3.5 -4.5 -3.3
8 EasyJet -19.5 -5.3 -6.6 -31.3
Median 0.3 -2.9 6.3 -3.3
Most-Improved Small Airline
1 Great Lakes Aviation 63.7 -88.5 15.1 58.8
2 Mesa Air Group 50.3 22.7 19.2 24.8
3 AirTran Holdings 37 16.7 8.8 32.4
4 World Airways 33.8 105.8 3 79.3
5 Pinnacle Airlines 29.1 -20.1 33.3 -8.4
6 JetBlue Airways 20.8 -4.2 10.2 60
7 Independence Air 11.1 0.4 5.6 15
8 Ryanair Holdings 1.5 -0.5 -0.3 1.1
9 Midwest Air Group 1.5 -14 3.4 -15.6
10 MAIR Holdings -3.3 -1.1 0.4 -5.3
11 Westjet Airlines -16.6 -7.1 -13.1 -15.9
12 Skywest Inc. -21.9 -13.7 1.8 -7.9
13 Frontier Airlines -50.5 -27.6 -60.9 -54.9
Median 11.1 -4.2 3.4 1.1
Most-Improved Freight Airline
1 AirNet Systems 5.9 12.2 -1.9 -1.8
2 FedEx Corp. 2 -0.3 7.3 3.3
3 United Parcel Service -1.9 -1.5 -13.8 0.2
Median 2 -0.3 -1.9 0.2

Notes:

* Performance measure categories (with numerical and percentage weightings) and supporting ratios are as follows:

OPERATIONAL PERFORMANCE (14.5, 38%) -- Operating cash flow to direct operating costs, basic defense interval, days cash, gross and net asset turns and return on productive assets.

STRATEGY/GROWTH (16, 42%) -- Debt equity, fixed charge, interest and principal covers, cash generation margins, working capital and employee turns, and return on equity.

FINANCIAL HEALTH (7.9, 20%) -- Gross cash flow to debt; net debt to common equity; retained earnings, working capital and cash flow to gross assets.

* Raw information for the Index of Competitiveness is provided by Standard & Poor's Compustat, a division of The McGraw-Hill Companies, and AirWatch Report.

* Calculations are based on the most recent fiscal operating results reported for the period ended December 2003.

* Airlines whose state ownership exceeded 60% or carriers that completed reorganization during 2003 following bankruptcy proceedings were excluded from the study.

*Not meaningful

 

[BoeingBoy]

And finally, this little tidbit about a win-win solution to parts inventory.....

*****************

World News Roundup
Delta Air Lines
Aviation Week & Space Technology
07/05/2004, page 16

Delta Air Lines' recent supply chain agreement with Boeing seems to be all upside for the Atlanta-based carrier. Boeing will buy back thousands of its parts from Delta, then store them at Delta's maintenance hangars and only charge the airline for parts it uses.

In return, Boeing will receive unprecedented access to information on the carrier's internal supply chain requirements, for use in forecasting.

The five-year agreement, which was signed on June 25, will transfer about 7,000 part numbers--all Boeing-manufactured components--from Delta to Boeing ownership. The agreement is the extension of an initial mid-2002 deal that started with 500 part numbers for expendable, low-value items such as bushings, clamps, brackets, retainers, hoses, seals and couplings.

"Boeing will buy back the inventory," said Mike McHale, director of supply chain management for Delta TechOps, the airline's maintenance arm. "This moves the inventory over, but the parts will stay where they are." He added that there would be no resulting loss of jobs.

The deal is part of a Boeing supply chain initiative called Integrated Materials Management. Delta is the second airline to sign up. Japan TransOcean Air, a subsidiary of Japan Airlines, was first.

IMM participation gives Boeing day-to-day access to an airline's operational needs, data that it then feeds to its parts divisions to optimize production for other customers.

**************

In short, all Boeing spare parts are available at zero inventory cost to DAL (other than possible cost of storage space - that is unclear), with them only paying for parts as they are used.

Jim

 

[mwereplanes]

Leadership is and always has been the key to success. Since the Schoefield days we have been lacking leadership. If we could get everyone in this company rowing in the same direction we would dominate the industry. Against any competition, at any time, under any circumstance. But to bring this team together we need leadership. Bold, honest, intelligent and moral leadership.

Why are the L.A. Lakers willing to open Fort Knox to bring the Duke hoops coach into their fold? Because he is a proven leader. What is the single most important reason Southwest has remained outstanding? Kelleher. Notice who they brought in to clear up the F/A problems they were having? Patton would have taken Berlin had politics not been involved. He was loved by his men and hated by his supervisors. Why? Because he led. And he threatened his superiors because he led better than they did. The same applies to Douglas MacArthur. How about all the dysfunctional families vs. the functional families you know? Interesting how the functional ones always have the great leadership coming from the home.

I don't know if Lakefield understands. You would think that he would based on his background but somehow the business world tends to inflate egos and erase common sense from your memory. Self importance becomes more important than the team. That's what we really are you know. A team. One that has been without a leader for a long time.

Everything Jim posted above relates to our situation. All the cost cutting in the world won't save US Airways. Not without leadership. Getting rid of Siegel was a good first step. But so far, Lakefield has not led us anywhere. If that doesn't change, the cheapest CASM in the universe will not save us.

mr

 

[cavalier]

BRAVO! Great post and I couldn't agree anymore nor said it any better.

MORALS I have been preaching although I get slammed for it.


Your comment: "I don't know if Lakefield understands." I might also add I don't think he really cares either. Just because he was at the right place at the right time doesn’t mean he has his entire heart and soul in this mess. The money people have it now and they left the previous team basically intact except for the head, but all the other people and mind set are still present doing nothing except exciting chaos and confusion doing nothing constructive with all their punitive policies and hard line stance.

I predict if the slate isn't wiped clean 100% with a team that has all the qualities you mentioned with one strong and moral leader at the top, we as a company will cease and it will not be years down the road but within months. It doesn't take a genius to see this, only common sense.

 

[mwereplanes]

Cav:

You might have hit it with the "I don't think he cares" comment. If you look at the overall management/leadership picture you could easily draw that conclusion. I'm quite certain the HR moron doesn't care. Comments that Bronner has made over tha past year could also lead to that conclusion. I know they care about money. Would it be logical to assume they would know they could make boatloads if they lead us out of mediocrity? Is it that hard to figure out?

My small mind assumes that everyone cares. Because I do. That thinking has got me into trouble before. In reality it may well be that no one on the BOD or above the VP level really cares. They all figure they will move on. And they will. It is that kind of selfishness that dooms great companies. Leadership is very uncommon in America today. Not just in business but everywhere. Maybe what is happening here is just a sign of the times. Kind of like the Sienfeld characters. Indifferent to everything that happens to anyone other than themselves.

mr

 

[X-U]

Right now, Bronner probably does not want US to make money. He can buy RJs,
show a loss, and use the loss to offset taxes on profits in his other holdings. When the dust settles, he will have a fleet of RJs that he can either continue to fly on his own (MDA) or bail out of the airline business and just go back to leasing airplanes (CHQ, MESA, JBLU or whomever).

 

[coolflyingfool]

Management has to be proactive instead of reactive. Have to identify potential probelms and figure solutions before they become problems. If you keep taking 1 step back and then take 1 step forward, you go nowhere.

 

[PITbull]

Leadership is and always has been the key to success. Since the Schoefield days we have been lacking leadership. If we could get everyone in this company rowing in the same direction we would dominate the industry. Against any competition, at any time, under any circumstance. But to bring this team together we need leadership. Bold, honest, intelligent and moral leadership.

Why are the L.A. Lakers willing to open Fort Knox to bring the Duke hoops coach into their fold? Because he is a proven leader. What is the single most important reason Southwest has remained outstanding? Kelleher. Notice who they brought in to clear up the F/A problems they were having? Patton would have taken Berlin had politics not been involved. He was loved by his men and hated by his supervisors. Why? Because he led. And he threatened his superiors because he led better than they did. The same applies to Douglas MacArthur. How about all the dysfunctional families vs. the functional families you know? Interesting how the functional ones always have the great leadership coming from the home.

I don't know if Lakefield understands. You would think that he would based on his background but somehow the business world tends to inflate egos and erase common sense from your memory. Self importance becomes more important than the team. That's what we really are you know. A team. One that has been without a leader for a long time.

Everything Jim posted above relates to our situation. All the cost cutting in the world won't save US Airways. Not without leadership. Getting rid of Siegel was a good first step. But so far, Lakefield has not led us anywhere. If that doesn't change, the cheapest CASM in the universe will not save us.

mr

Damn, we aren't ranked in any catagory. Even United is making the list.


Geez Louise.

 

[BoeingBoy]

PitBull,

That's explained in the footnote to the two last stories....

"-- Airlines whose state ownership exceeded 60% or carriers that completed reorganization during 2003 following bankruptcy proceedings were excluded from the study."

Probably because of the skewed numbers that show up when emerging from bankruptcy. Remember our $1+ billion profit one quarter last year?

Jim

 

[diogenes]

"Where there is no vision, the people perish."