The real problem with LCC
- Thread starter usair_begins_with_u
- Start date
whatkindoffreshhell
Veteran
Easily my company spent over $200K with US the past year. Documented.
They won't even return my calls.
Please explain these things I hear about -- 'perks' and 'upgrades' ??
So I've taken our business elsewhere.
Guess what?? US didn't even notice they lost a huge chunk of business!
How hard would a salesman, any salesman, work to land a quarter-mil deal?
traderjake
Veteran
- Aug 30, 2002
- 5,669
- 9,308
Wolf made a billion dollars of cash disappear through his stock buy back program, drove us to bankruptcy, and personally stole 15 million dollars when he walked away from the mess he made.
Be Careful What You Wish For.
Veteran
- Dec 23, 2006
- 2,269
- 571
Astute observation. The rose colored glasses go on as time goes by.
jerseyfinn
Senior
I'm hearing a lot of absolutism here but I'm not so sure that it really gets to the heart of the issue as much as it wanders around the talking points. Still, the points taken here are certainly informative as well as instructive of what the challenge is for US or any airline for that matter.
Airlines are indeed a strange bird. Look at the breadth of the aviation industry in its entirety. Sure, we all know the actual airline side of the industry as it's the most prominient part. But ponder this. For the most part, it's the airlines themselves which struggle to create growth and share value for investors, or to deliver a consistent and delineated product to customers. The guys who design and build the plane, the companies who build the seats or make the luggage lorries, the entities who lease planes or cater cabins, most any company doing something aviation-related consistently makes money in this businees & returns value to investors and a product to customers-- except the airlines.
So what's going here here at US is a much larger force than messers K & P freelancing by themselves.
Airlines struggle to make money because they sell seats at a loss. When a competitor undercuts them, airlines cut prices still more and take even bigger losses. Nothing new about any of this, nor is this practice atypical of any other industry facing competetition. But in most every other industry, these (temporary) losses are tolerated so long as one builds market share which creates efficiencies and the ability to raise prices to better fit costs. This is not the way airlines have been run the past few decades since government-induced deregulation ( which does indeed bring more pax to the ticket counters ).
9/11 and rising fuel costs create a douoble whammy effect which compels airline and their execs to wake up & smell the coffee of modernity while acknowledging the precarious position of commercial airlines. At present, American commercial aviation has yet to fully acknowledge this reality. It remains slow/reluctant to merge/consolidate/disgorge itself of ineffencies. And when done in the half-assed manner by which most airlines have approached it, the results a bad for pax, uncertain for investors, and a disaster for employees.
Now the world is not gonna sit still while the ivory tower folks tinker and struggle to find the right formula. Folks here are correct to opine that the Wharton School might be of use here -- except that I don't think believe that even Wharton has the answers. The airline paradigm is a Gordian knot of plain and simple laggard/ineffectual industry managment combined with complicated government regulation up the whazoo ( some of this necessarry, other portions questionalble ) and some unique problems within the industry such as a huge vulnerability to weather, a technologically laggard ATC ( thanks Congress ) and a converging gloabalization process which hasn't fully worked out how international carriers flying between borders can integrate ownership ( & enhance or maximize operational/finances/marketing effencies). IMO, this uniqueness makes it a dangerous proposition when a "hot shot" shows up thinking that they have all of the answers to this slippery slope industry.
Now the OP hits the nail on the head when they suggest that an airline today can not be managed by managers with a unitary skill/dimension. It is indeed instructive to learn that neither Kirby or Parker have an operational background. A prudent airline would create a management structure which combines these two skills. But in today's aviation reality, it remains critical to make financials and operations your two tantamount focus points. A failure to do so will have you walking the plank to oblivion.
As Art suggests, US has its priorities wrong. But not so nearly as wrong as most think. If one considers the recent history of US, it makes perfect sense to have financials folks at the table when merging two disparate airlines into one -- especially given today's precarious aviation environment and complicated unioin situations. But an operations guru was also essential if Tempe really understood the challenges/issues facing it as east meets west. And Tempe has abjectly failed to create stable, reliable operations.
In this sense, I somewhat disagree with Art who suggests that the customer is always priority number one. Of course, the customer should always be the focus of every employee's effort as a satisfied customer comes back and tells others to follow. But without adequate operations, there exists no inducement to bring folks into the cabin in the first place -- and note, flying is indeed partly a "cattle" type experience.
Phasers mentions marketing, and rightly so. But once again, you can't make strawberries out of hosreshit. A good product sells itself, and good marketing simply maximizes returns. Just what does US really have to sell at the moment? Thank Parker and Kriby for that situation, but marketing flows from operations and financials, not the other way around. That said, the one area which was always in Tempe's grasp was the Dividend Miles program and especially their elites. In this regard, Tempe has driven away a good chunk of their legacy elites with lies, obfuscations, and an inconsistent product. Looks like there were all sorts of failures at the top.
My own take on this thread?
I don't mind, and I actually fully expect almost any company to make mistakes, miscues, and mis-steps. US doesn't disappoint in that regard. The real bottom line is how a company synthesizes and what they learn from their mistakes. This is where US has failed miserably under Parker. In terms of strategy, US errs big time by not having an operational guru at the top sitting astride a financials hot shot. But even this I can forgive so long as Tempe really "gets it".
But the thing that gets my nipples hard and erect is how Parker and Kirby mislead and downright lie to customers and to employees. Although US is in desperate need of an operatoins guru and a clear product definition and goal, it's most urgent need is a management strata which possesses absolute character. And character, humility, and integrity are wholly lacking in both Kriby and Parker. These two men have given anyone who associated with US in 2007 a nightmare ride and then they had the terminity to look you in the eye and lie -- a mistake can be forgiven, but not lying.
If US is serious about being a real airline with a real product, then it's time to put Mr. K & Mr. P on permanent KP duty. Give a new team a chance. I can't say that US will make it as the entire industry is up in the air. But at least it'll give US a chance and perhaps pax will experience a decent ride. Investors queue up in zone 99 behind the pax and employees.
Barry
Airlines are indeed a strange bird. Look at the breadth of the aviation industry in its entirety. Sure, we all know the actual airline side of the industry as it's the most prominient part. But ponder this. For the most part, it's the airlines themselves which struggle to create growth and share value for investors, or to deliver a consistent and delineated product to customers. The guys who design and build the plane, the companies who build the seats or make the luggage lorries, the entities who lease planes or cater cabins, most any company doing something aviation-related consistently makes money in this businees & returns value to investors and a product to customers-- except the airlines.
So what's going here here at US is a much larger force than messers K & P freelancing by themselves.
Airlines struggle to make money because they sell seats at a loss. When a competitor undercuts them, airlines cut prices still more and take even bigger losses. Nothing new about any of this, nor is this practice atypical of any other industry facing competetition. But in most every other industry, these (temporary) losses are tolerated so long as one builds market share which creates efficiencies and the ability to raise prices to better fit costs. This is not the way airlines have been run the past few decades since government-induced deregulation ( which does indeed bring more pax to the ticket counters ).
9/11 and rising fuel costs create a douoble whammy effect which compels airline and their execs to wake up & smell the coffee of modernity while acknowledging the precarious position of commercial airlines. At present, American commercial aviation has yet to fully acknowledge this reality. It remains slow/reluctant to merge/consolidate/disgorge itself of ineffencies. And when done in the half-assed manner by which most airlines have approached it, the results a bad for pax, uncertain for investors, and a disaster for employees.
Now the world is not gonna sit still while the ivory tower folks tinker and struggle to find the right formula. Folks here are correct to opine that the Wharton School might be of use here -- except that I don't think believe that even Wharton has the answers. The airline paradigm is a Gordian knot of plain and simple laggard/ineffectual industry managment combined with complicated government regulation up the whazoo ( some of this necessarry, other portions questionalble ) and some unique problems within the industry such as a huge vulnerability to weather, a technologically laggard ATC ( thanks Congress ) and a converging gloabalization process which hasn't fully worked out how international carriers flying between borders can integrate ownership ( & enhance or maximize operational/finances/marketing effencies). IMO, this uniqueness makes it a dangerous proposition when a "hot shot" shows up thinking that they have all of the answers to this slippery slope industry.
Now the OP hits the nail on the head when they suggest that an airline today can not be managed by managers with a unitary skill/dimension. It is indeed instructive to learn that neither Kirby or Parker have an operational background. A prudent airline would create a management structure which combines these two skills. But in today's aviation reality, it remains critical to make financials and operations your two tantamount focus points. A failure to do so will have you walking the plank to oblivion.
As Art suggests, US has its priorities wrong. But not so nearly as wrong as most think. If one considers the recent history of US, it makes perfect sense to have financials folks at the table when merging two disparate airlines into one -- especially given today's precarious aviation environment and complicated unioin situations. But an operations guru was also essential if Tempe really understood the challenges/issues facing it as east meets west. And Tempe has abjectly failed to create stable, reliable operations.
In this sense, I somewhat disagree with Art who suggests that the customer is always priority number one. Of course, the customer should always be the focus of every employee's effort as a satisfied customer comes back and tells others to follow. But without adequate operations, there exists no inducement to bring folks into the cabin in the first place -- and note, flying is indeed partly a "cattle" type experience.
Phasers mentions marketing, and rightly so. But once again, you can't make strawberries out of hosreshit. A good product sells itself, and good marketing simply maximizes returns. Just what does US really have to sell at the moment? Thank Parker and Kriby for that situation, but marketing flows from operations and financials, not the other way around. That said, the one area which was always in Tempe's grasp was the Dividend Miles program and especially their elites. In this regard, Tempe has driven away a good chunk of their legacy elites with lies, obfuscations, and an inconsistent product. Looks like there were all sorts of failures at the top.
My own take on this thread?
I don't mind, and I actually fully expect almost any company to make mistakes, miscues, and mis-steps. US doesn't disappoint in that regard. The real bottom line is how a company synthesizes and what they learn from their mistakes. This is where US has failed miserably under Parker. In terms of strategy, US errs big time by not having an operational guru at the top sitting astride a financials hot shot. But even this I can forgive so long as Tempe really "gets it".
But the thing that gets my nipples hard and erect is how Parker and Kirby mislead and downright lie to customers and to employees. Although US is in desperate need of an operatoins guru and a clear product definition and goal, it's most urgent need is a management strata which possesses absolute character. And character, humility, and integrity are wholly lacking in both Kriby and Parker. These two men have given anyone who associated with US in 2007 a nightmare ride and then they had the terminity to look you in the eye and lie -- a mistake can be forgiven, but not lying.
If US is serious about being a real airline with a real product, then it's time to put Mr. K & Mr. P on permanent KP duty. Give a new team a chance. I can't say that US will make it as the entire industry is up in the air. But at least it'll give US a chance and perhaps pax will experience a decent ride. Investors queue up in zone 99 behind the pax and employees.
Barry
cactusflyer
Senior
jersey,
Great post and it begs the question why don't Parker and Kirby get that we need an operational guru? My naive assumption is that as long as US is making some money the BOD won't truly see the need. That or the wonder twins egos just won't allow it. Of course maybe the bigger question is how long to we (the employees) have to wait while the management of this company figures it out? Does oil have to hit $200 a barrel? When it's all said and done we'll be left holding the bag and they will ride off into the Arizona sunset with there golden parachutes fully intact. That is the truly sickening part.
Great post and it begs the question why don't Parker and Kirby get that we need an operational guru? My naive assumption is that as long as US is making some money the BOD won't truly see the need. That or the wonder twins egos just won't allow it. Of course maybe the bigger question is how long to we (the employees) have to wait while the management of this company figures it out? Does oil have to hit $200 a barrel? When it's all said and done we'll be left holding the bag and they will ride off into the Arizona sunset with there golden parachutes fully intact. That is the truly sickening part.
jerseyfinn
Senior
I think that the partial answer lies in the thread about Parker's new change of control deal. It sure doesn't appear as if the BOD is looking beyond messers Kirby & Parker at this point in time. I myself don't know enough about the composition of that board to venture a guess about its goals, but it sure seems that they've been sold on the idea of more mergers.
I don't disagree with the conclusion that mergers/consolidations are gonna occur sooner rather than later. It seems that all of those BKs have finally sunk the message into the consciences of airline execs and their boards that it's a new game out there. The thing none of us know is where US fits into the merger picture. Obviously DL is not interested and appears to be leaning towards a UA deal. That leaves NW, CO, & AA in terms of majors. In sports, you go with the team you got, so it appears that Parker/Kirby are the starting line up. Then again, all of this is uncharted territory for all of the majors. I don't see any one airline possessing significantly more wisdom or vision than another, though some do indeed have a stronger hand in the game. I'd suspect that all of the airlines' BODs and executives are smacking their lips at the prospect of big pay days and profitability ( read that higher fares while controling costs like wages/benefits ).
Doesn't look to me as if we pax at US have much to look forward to in 2008 except same old same old. I know that the year of the rat passed not too long ago in the Chinese New Year scheme of things. Looks as if US has elected to extend the rats for several years. Not good for anyone hoping for change at US.
Barry
Dog Wonder
Veteran
Now that is an idea. White Castle buy on board.
Two Rats, hold the tail, two fish, hold the scale.
Fortunately the Westies haven't hit a White Castle after the bars close. They would be all over this one. Don't recall if they had Diet Dr. Pepper.
Labor Dawg
Advanced
Very well spoken ART They operate on the SCE code.
S= STOCK HOLDERS
C= CUSTOMERS
E=EMPLOYEES
They should work on the reverse!
E=EMPLOYEES
C=CUSTOMERS
S=STOCKHOLDERS
For all of you customers out there. We as employees care about you, but we care about our families first. If the company that is making millions took good care of us instead of saying we are liabilities. We in turn would love to come to work with a smile on our face and bend over backwards to do a good job. The problem is the company makes these employees so miserable that they have a hard time functioning. If we are taken care of then the customers is taken care of, and something amazing happens we make good money and the stockholders make money! Then everybody is happy! The real problem is this is an instant gratification society. They don't want to see the company successful. They want to bleed it till they can screw someone new or watch the company go out of business
S= STOCK HOLDERS
C= CUSTOMERS
E=EMPLOYEES
They should work on the reverse!
E=EMPLOYEES
C=CUSTOMERS
S=STOCKHOLDERS
For all of you customers out there. We as employees care about you, but we care about our families first. If the company that is making millions took good care of us instead of saying we are liabilities. We in turn would love to come to work with a smile on our face and bend over backwards to do a good job. The problem is the company makes these employees so miserable that they have a hard time functioning. If we are taken care of then the customers is taken care of, and something amazing happens we make good money and the stockholders make money! Then everybody is happy! The real problem is this is an instant gratification society. They don't want to see the company successful. They want to bleed it till they can screw someone new or watch the company go out of business
Harry Callahan
Veteran
A BIG +1 to Labor Dawg's post. Are you reading Tempe ?
AstroLounge
Veteran
- Oct 10, 2005
- 1,491
- 213
Exactly what I was thinking. Let's NOT forget that Slippery Dave Siegel had n MBA from Brown. Two very distinguished American Universities obviously teaching a greedy/disceptive/power hungry brand of business acumen. (Or we managed to get the class clowns that somehow found a way to get an MBA). Their style of business is ALL About ME! And it shows.
