Turning Point

[firstamendment]

Daybefor... I think when the term "screw the stockholders" was used you are taking it slightly out of context. I think it was meant in the short term sence. Many companies including ours have done little things to manipulate the stock price in the short term so that some fat cats pockets can be greased, and to heck with any long term profits. What I took from that post was if you make this company viable for the long term, the investors would make out as well, not just the few with the inside information IE tons of stock options and goldern parachutes.
Disclamer: and inference about stock options and golden parachutes to former ceo's is purely intentional!

[post="235459"][/post]​

Agreed here. Maybe "screw" was a bit strong. The point I was trying to make is that when I first started there wasn't the day to day obsession with stock price. If you read further, the next statement had to do with taking care of customers and employees in such a way that a profit would come naturally.

 

[firstamendment]

"It would be cool, but also dead within six months, tops.

There are two major problems with your vision of US Airways:

1. You have eliminated virtually every amenity/product offering that offers US the chance to generate additional revenue, ESPECIALLY from the premium traffic that, contrary to popular belief, still exists, albeit in diminished quantity. Increased legroom in Coach has been proven time and again to be a failed concept - passengers love the extra few inches, but are rarely willing to pay the necessary premium to sustain it."

US Airways functioned for years without F/C or Clubs. Hell, the FF program is but 20 years old, and the company is what, 60 years old? Seems to me all the loses have come in the last 20 years. Hum!! As far as generating revenue, I think SWA would argue that they have their fair share of business travelers. That may have been the case 5 years ago, but I don't agree with you.




"2. Revenue issues aside, US couldn't afford the transition costs. The reconfiguration of hundreds of jets to an all-Y configuration, along with the installation of a state-of-the-art PTV system, would easily run into the hundreds of millions of dollars - money the airline simply cannot hope to obtain."

Bronner has flapped his lips for three years about investing more money if labor got their cost down. Remember we are only a mere 1% of his investment as he likes to cram in our face. SO it's time for him to put his money were his fat mouth is. THREE years of his threats. He almost has everyone on board, so invest or stop the jaw flapping.




"I commend your willingness to think outside of the box, but unfortunately for US, the carrier MUST find a way to be successful within a legacy carrier framework - the airline has neither the time nor the money to toy around with an LCC or any other business model."

Thank you for your compliment, but remember, I am not the CEO...just one of many workerbees. Again, Bronner holds the purse strings. I sincerely feel if he wants to see this airline transform and succeed, he will invest enough to finish the job. I hope this is the case.

 

[avek00]

1. As you have indicated, US' problems have been a result of the company failing in a COMPETITIVE deregulated business environment. In order for US to compete effectively, it must possess competitive advantages that will entice customers (including the remaining big spenders, which CO/AA have been successfully wooing post 9/11) to both fly US and pay a premium to do so. Eliminating FC and the Clubs eliminates ANY reason for business travelers who desire a full-service product to choose US Airways - they can simply go to DL/NW/CO/AA, get upgraded to FC, spend some productive time in the airport club, and enjoy a decent meal on many flights to boot. In short, mimicking B6 in its entirety would do US little good since any decline in costs would be matched if not exceeded by the inevitable decline in revenues.

Further exacerbating the problem of course is US' senior-heavy workforce: as we have seen time and again, US has a problem with its labor costs in part because a large percentage (if not a majority nowadays) of its workforce will top out under any halfway reasonable compensation scheme. Something to consider: B6's most senior employees hold about 5 years - that'd have you near the bottom of the furlough recall list with most US Airways workgroups.

2. Bronner doesn't NEED to do anything more for US than preside as the nominal chairman at this point. While he may WANT to see US survive, the bottom line is that even with the labor cost cuts, US will be an extremely risky enterprise, and there are numerous opportunities both within and outside the airline industry that carry less risk and a much higher probability of return on investment. He has a fiduciary responsibility to the pension holders, something that he can't ignore or put aside just to save US Airways.

 

[firstamendment]

I concede that the biz traveler would be alienated, but US seems to be pushing itself as a leisure lcc while still trying to appease the biz traveler. Here in lies the continual problem. What are we? Can we appease both groups? You speak of AA/DAL/NWA and CAL, yet NONE of those carriers are making money themselves. As I stated earlier, we are trying to be all things to all people and it just isn't working.

If all the contracts are passed, most are offering early outs. While yes, we will never be on par with JB and her 5 years of existence, we will be more on par with the other "legacies".

All I know is that I lived in NYC during the first 4 of the 5 years JB has been in existence. Their success has NOT just been because of the leisure market. This carrier has given Americans what they want where air travel is concerned...something to do. Every person I know, biz and leisure, that have flown JB LOVE it. Why? They love the satelitte tv. Even the most hurried business traveler on a 5 hour flight gets bored. Americans like to be entertained. I bet the average JB customer doesn't HAVE time to look for that duct tape keeping a piece of carpet down....too bust watching CNN or perhaps the BCS BOWL CHAMPIONSHIP....LIVE!! Big gray seat with ink marks vs. ESPN? No match. I'll give the US1, 2's, and 3's free drinks if that's all they want. Food? Please, where have you been?

OK, maybe keep F/C, but with all you say, we seem to be pretty doomed no matter what. So alienate or not, US must make up her mind WHO she is. Somebody will be unhappy. Again, I am only expressing my opinion. Nobody is paying me for doing what some arrogant, overpaid MBA should be doing already in CCY. By the way, what DO they do?

As for Bronner, he doesn't need ANYTHING where US is concerned, but I work here and have tired of his big mouth flapping about lowering cost and his willingness to invest more if we get our cost structure down. HE is the one making these statements, not the US employees. HE is the one that has been ringing the battle cry of "CAPITULATE OR LIQUIDATE" for the past three years, not the employees. If what YOU say is true, then all we have here is a "nominal chairman" with not only a big mouth, but one who is an abusive, overinflated, egotistical boob who likes to use his power to threaten the little man. If this is what we are stuck with, thanks, but no thanks. He will only be adding to the problem. I would rather us Chapter 7 then keep inviting these kinds of rulers and life support investors to the table. Bronner IS part of the problem and NOT the solution.

As I see it, you have offered NOTHING to the table where a change to US Airways is concerned. Could you please share your insight with all of us, for I have seen nothing to indicate anything more from your writings but the same impending doom of US Airways. It appears status quo is fine, as long as it doesn't effect your FF perks or you personally. I can tell you, US Airways wrote the book on status quo. Shooting down every idea just keeps the old airplane wheels spinning and spinning and spinning, going absolutely NOWHERE! So honestly, besides kissing U goodbye, what are your ideas? In no way am I saying this arrogantly or with anger (you gotta hate the internet for THAT). I just keep hearing so much of the same stories of why we CAN'T do something, instead of what we can actually DO. Thanks.

 

[900AT]

Firstamendment,

Your post was a breath of fresh air on this board. It reminded me why I do my best to thank all the US folks I deal with each flight. Can't tell you the enjoyment I get from handing over a bag of chocolates to the flight crews.

I have no connection to any airline and no aviation expertise except being an ff on US. I bounce between SP and GP each year and having made it for the 7th straight year would sure like to continue our "relationship".

I'm based out of PHL and have seen all the advertising for WN. I have not flown any carrier except US (or Lufthansa / UA codeshare) in the last several years. Why? The amenities of US.

I estimate I get up front about 50% of the time. I don't expect it and am very happy when it works. I really appreciate the check-in and boarding privileges. I have purchased club memberships each year to make the process even nicer. First or coach, I feel special when I fly US.

That being said, if they removed first class and the clubs, I'd probably defect to UA. They seem to serve many cities I fly to and if they continue to provide the special perks, they would have my business.

Some might argue that those of us who are upgraded do not add any money to the business. I disagree. Every flight I have a choice of carriers and I can't tell you how many times I have chosen a more expensive US flight. First - for the chance to ride up front and second - to make sure I requalify for the next year. Take a look at another board and you'll see lots of folks who do mileage runs just for the points/status. That means they purchased tickets on US just to qualify for SP/GP/CP. I'd say that is adding revenue to the company.

As for WN, I do not fly any carrier without seat assignments, period. Just a guess from someone who has no expertise, but I think those business travelers on WN are there because their company mandates it or they are paying for their travel out of their own pockets. I'll bet they would come over if they could.

Thanks again for your great post,

900

 

[firstamendment]

Thanks for your post. Indeed, tis a complicated situation. I hear you and the others and yes, I get it. But do the powers that be?

As this thread gets longer, I just want everyone to not forget that the thread was not just about one man's recommendation to improve US Airways, but to get to the core of the problems. If we can't come to resolve as to what the problem IS, how can we fix it?

More importantly, we need leaders who really believe in US Airways. I'm sorry to be so harsh on Dr. Bronner, but his money means nothing without purpose. I see no purpose where he is concerned. If anyone can think of one, I sure would like to see it. US Airways has a history of jumping at short term solutions that only keep the company afloat. BA is a prime example. We were in a lopsided "alliance" that gave us $$ but did nothing on the other side of the pond to promote US Airways. At least Wolf saw that for what it was and yanked it. When we started bleeding money on the west coast, there was no analysing. We just pulled out and so the true growth of SWA started.

We must STOP being a reactionary airline. In my tenure with US Airways, I have NEVER seen a well thought out idea, short of the FLL expansion (jury still out) and caribbean. Everything has been done as a reaction and not as a plan. US Airways seems to live in constant panic mode. I am a sports lover. I love Carolina basketball. One thing Roy Williams or any good coach will tell you is to be patient, wait for the right shot, and then aggressively initiate your game plan. The team that runs and guns usually fails. We are a run and gun airline who is constantly blaming everyone and everything known to mankind for our failures. It's air traffic, the weather, concentrated airspace, blah, blah, blah. Here we are blaming and still not winning the game. Hell, we aren't even in competition.

We need the right coach, but we need a coach who will not sucumb to the financial pressures of the monybags that know NOTHING about running an airline. Bronner needs to have more faith in Lakefield and the US employees and stop hanging his money and threats over everyone's heads.

 

[Bob Owens]

Firstamendment,

Your post was a breath of fresh air on this board. It reminded me why I do my best to thank all the US folks I deal with each flight. Can't tell you the enjoyment I get from handing over a bag of chocolates to the flight crews.

I have no connection to any airline and no aviation expertise except being an ff on US. I bounce between SP and GP each year and having made it for the 7th straight year would sure like to continue our "relationship".

I'm based out of PHL and have seen all the advertising for WN. I have not flown any carrier except US (or Lufthansa / UA codeshare) in the last several years. Why? The amenities of US.

I estimate I get up front about 50% of the time. I don't expect it and am very happy when it works. I really appreciate the check-in and boarding privileges. I have purchased club memberships each year to make the process even nicer. First or coach, I feel special when I fly US.

That being said, if they removed first class and the clubs, I'd probably defect to UA. They seem to serve many cities I fly to and if they continue to provide the special perks, they would have my business.

Some might argue that those of us who are upgraded do not add any money to the business. I disagree. Every flight I have a choice of carriers and I can't tell you how many times I have chosen a more expensive US flight. First - for the chance to ride up front and second - to make sure I requalify for the next year. Take a look at another board and you'll see lots of folks who do mileage runs just for the points/status. That means they purchased tickets on US just to qualify for SP/GP/CP. I'd say that is adding revenue to the company.

As for WN, I do not fly any carrier without seat assignments, period. Just a guess from someone who has no expertise, but I think those business travelers on WN are there because their company mandates it or they are paying for their travel out of their own pockets. I'll bet they would come over if they could.

Thanks again for your great post,

900

[post="235638"][/post]​

Well according to many in this industry passengers like you do not exist!

 

[Art at ISP]

Bob Owens,

We do exist. The industry pundits are making darlings of LCC's because they appeal to average consumers. Most if not all of my fellow business travelers would pay a small premium for better schedules, an assigned seat, and the amenities offered to frequent travelers. I do it all the time, as do many many more people. It also appears that these pundits may be wrong--look at DL's announcement this morning (which by the way is a suggestion I had made to US more than a year ago). RATIONALIZATION of fares has a potential to be revenue positive, regardless of what the "experts" say. Not only do I believe AVERAGE fares will increase, but I think more people will fly.... The business traveler does not expect $29 loser fares all the time--we expect FAIR fares.

There is value to a wider more comfortable seat. I can tell you from experience that you are much more likely to be in a better place mentally and physically after a 2 plus hour flight if you are not cramped into a middle seat between two other fully grown adults. Comfort affects productivity.

Firstamendment, I agree with you completely when you say that the company needs to figure out what it wants to be. I believe it should market itself as a business travelers airline, and keep the "perks", many of which have little if any cost. They should try to attract business travelers with RATIONAL fares and outstanding service. To go after B6 or WN customers and trying to be an LCC is trying to be something they are not. Let the bottom dwellers go to the LCC's--market to the business travelers who fly ALL the time, not once or twice a year. And for what its worth, as far as clubs are concerned, we PAY for that--and it is a subsantial sum.

Again I commend your post as well as the discussions on this thread for the most part. I think DL has stolen our thunder here----however if we make a similar fare adjustment and simplification, we could attract more business travelers and I firmly believe it could be revenue positive.

My best to you all......

 

[dukeman]

Well according to many in this industry passengers like you do not exist!

[post="235643"][/post]​

1st post here. I think you need to spend a little more time on FlyerTalk. There are plenty of passengers like 900AT. I'm one of them. And there are lots more.

 

[BoeingBoy]

I think what Bob is saying is that there are many (both inside and outside the industry including some in our management) who say that "business travelers" are a disappearing breed. Obviously, that is false.

I suspect that what those folks are really saying is that the number of people willing to pay full fare walk-up prices (10 or more times the lowest fares) has declined and will probably never come back to levels experienced in the past.

As Art and others have said so well, rational fares does not mean dirt cheap fares. A legacy carrier should be able to realize, on average, some amount of yield premium for the extra's they offer. And those extras include the ability to upgrade to first class, use of the club facilities, interline agreements, etc. Eliminate all those extras and the only basis to compete with the LCC's is price, and a legacy carrier is hard pressed to do that due to the higher costs associated with even an efficient legacy operation (and our's is hardly efficient).

Jim

 

[Art at ISP]

Jim,

Well said. Also as I stated before, we PAY for the clubs.

Time will tell, but if you look at DL's move, it was based on the success of what they did in CVG. If only we had been the leader here...now I just pray we follow.....

My best to you all....

 

[Bob Owens]

I think what Bob is saying is that there are many (both inside and outside the industry including some in our management) who say that "business travelers" are a disappearing breed. Obviously, that is false.

I suspect that what those folks are really saying is that the number of people willing to pay full fare walk-up prices (10 or more times the lowest fares) has declined and will probably never come back to levels experienced in the past.

As Art and others have said so well, rational fares does not mean dirt cheap fares. A legacy carrier should be able to realize, on average, some amount of yield premium for the extra's they offer. And those extras include the ability to upgrade to first class, use of the club facilities, interline agreements, etc. Eliminate all those extras and the only basis to compete with the LCC's is price, and a legacy carrier is hard pressed to do that due to the higher costs associated with even an efficient legacy operation (and our's is hardly efficient).

Jim

[post="235668"][/post]​

Exactly!

This is my third go around with this "No frills are the future" crap. In fact I started at one of those no frills carriers -Capitol Air, in 1980.

All this is an attempt, successful one at that, to "reset wages". The industry knows how weak and stupid the union leaders are -if you can call them leaders and are exploiting the situation created by 9-11 to drive us into the ground. Once they feel they can no longer squeeze out any more from labor they will kill off the LCCs that compete with them, shut down at least one of the legacy carriers-probably USAIR and once again start making "record profits".

By the time all these contracts become renegotiable we will be so for behind that we will never catch up. No doubt that by 2010 there will be another downturn or fare war. The USAIR employees will remeniss and compare their new to their old employer but lament the fact that if it had shut down sooner so they would be back up to top scale at their new employer and not still be paying off all those debts incurred working for less to save a dying company. The airlines will #### that "airline employees are being unreasonable, demanding 80 to 90% increases while the carriers profits are dwindling", "airline workers are threatening to strike for 90% increases and holding the Hard Working American hostage". No one, not even our weak ass unions will let everyone know that we are simply trying to get back to where we were.

 

[firstamendment]

I think what Bob is saying is that there are many (both inside and outside the industry including some in our management) who say that "business travelers" are a disappearing breed. Obviously, that is false.

I suspect that what those folks are really saying is that the number of people willing to pay full fare walk-up prices (10 or more times the lowest fares) has declined and will probably never come back to levels experienced in the past.

As Art and others have said so well, rational fares does not mean dirt cheap fares. A legacy carrier should be able to realize, on average, some amount of yield premium for the extra's they offer. And those extras include the ability to upgrade to first class, use of the club facilities, interline agreements, etc. Eliminate all those extras and the only basis to compete with the LCC's is price, and a legacy carrier is hard pressed to do that due to the higher costs associated with even an efficient legacy operation (and our's is hardly efficient).

Jim

[post="235668"][/post]​

You are right on with the fair fares. I guess many of us have somehow gotten the impression that everyone wants cheap, cheap, cheap. I see here that is NOT true. <song> Lakefield can you hear me? Bronner can you here me?

Regardless, this airline needs some cash infusions to upgrade AND clean up. If I see one more flaking paint job. And speaking of F/C, please put some class back into it. I am ashamed of the total lack of attention and that carbohydrate basket. :angry: Or maybe an upgraded plastic wine glass and cup for F/C.

Again, $$$

 

[Art at ISP]

Bob,

With all due respect, while I agree with you about companies trying to "adjust" wages, the fact of the matter is that it is happening in other industries as well. When revenues don't support expenses, something has to change. I agree TOO much of that change has been on labor's back, and I feel much more could have and should have been done to retain revenue, but let's face it---there is some fault on ALL sides here.

The airline industry is not alone, it's just in the spotlight right now.

My best to you all......

 

[Bob Owens]

Bob,

With all due respect, while I agree with you about companies trying to "adjust" wages, the fact of the matter is that it is happening in other industries as well. When revenues don't support expenses, something has to change. I agree TOO much of that change has been on labor's back, and I feel much more could have and should have been done to retain revenue, but let's face it---there is some fault on ALL sides here.

The airline industry is not alone, it's just in the spotlight right now.

My best to you all......

[post="235693"][/post]​

Is it? Show me one group of workers outside the airlines where they all took at least a 25% paycut.