Us Airways Already Owns Lcc's

[OldpropGuy]

US Airways already owns, and has had for years, it's own low cost carriers. Why does management continue to ignore the Wholly-Owneds, who have proven in the past they can profitably feed the mainline jets? I'm sure that the answer is not outsourcing the flying to the contract carriers.

Currently only PSA, and eventually MDA (which would not exist if we were not so far behind the rest of the industry), are scheduled for RJ's while PDT and ALG are withering on the vine!

Use the resources which we already have available. The competiton continues to drain away the lifeblood of our once great airline while we just quietly watch, waiting for "the new business plan."

Maybe it's just me!!!!!!!

 

[dfw79]

Perhaps the future business plan will involve the reduction in the number of feeder carriers and the combination of several of the owned carriers. Heck they could combine all wholly-owned airlines of US Airways Group into one. Then again, I'm not sure how many mainline people would like to go to one list. I mean...they are a wholly owned as well.

 

[TBONEJ4J]

According to Mesa's own SEC filings, it's CASM is about 14.5 cents.
Not only that, but they made a profit in the last quarter.

Hey Dave, before you go bellyaching about how mainline costs are 40% above the LCC's, can you explain why US Airways is providing phenomenal growth to an outside lift provider with such high CASM's? CASM's more than 40% above last quarter US Airways CASM's?

WHY?

Did I miss an Economics lesson where the logic of this was explained?

Or do economics and financials not count when applied to a small-jet flown by MESA?

Not only is US Airways paying the costs for the MESA operation, there is enough left over for them to make a profit!

How can this scam artist question CASMs of a little over 9 cents, while distributing all the flying to a ridiculously high cost carrier such as Mesa. What would MESA's CASMs be if they actually sold there own tickets and provided there own customer service? 20 cents?

Keep all the small Jet, low-cost flying at the wholly-owneds. I'm sure they can do it for a lot less than 14.5 cents per seat mile. At least then the profits will stay in the Group and could be used to get more A330's for the benefit of all US Airways employees and furloughees.

Why is nobody outraged that US Airways is pouring it's own lifeblood, money, into a High Cost / Low Pay customer service product disaster bottom-feeder like Mesa while the wholly-owneds with their dedicated US Airways Group employees die a slow pathetic death? (Not including PSA I suppose).

Am I missing something?

 

[airlineorphan]

According to Mesa's own SEC filings, it's CASM is about 14.5 cents.
Not only that, but they made a profit in the last quarter.

Excellent point TBONEJ4J,

I think this reveals something about the ways in which a holding company can hide profit when it has 13 (14? 15?) subsidiary, contracted-out, affliate, etc. carriers in a complex constellation. Given the chicanery of corporate accounting over the last couple years, it would not surprise me at all if there were a fair bit of profit lurking out there, shifted around so employees could have the hell scared out of them by dire Friday messages from Mr. Siegel.

If ENRON and WorldCom could inflate their earnings, it's not a stretch to imagine a company like US Airways could inflate their losses by shifting a few things around their shell game.

On the other hand, if Mesa is making a profit with that kind of CASM, then they (or US Airways Group) may be working the pricing system differently than at the rest of the cobbled together thing they call US Airways. It would be very interesting to follow the money. Anyone up for mucking through a lot of SEC filings?

You are absolutely right, of course about the impact on Mesa profits of the utilization of US Airways (often expressed) agents, etc. And after the cheapo maintenance provided by Raytheon subcontractor S.M.A.R.T. on the Air Midwest (Mesa subsidiary) CLT flight last winter, the whole thing gives me pause.

In solidarity,
Airlineorphan

 

[Light Years]

Wholly Owneds are the way to go. Obviously the employees of a WO have more of an interest in the company and its fate than some contractor.

Also, we are making all of these Mesas, Chautauqua and TSAs profit while we're not! And what do they do with the money? Buy more jets- for the competition!

 

[fr8tmastr]

I remember reading an article from J.O. at Mesa in which he was talking about his operation and how every 8 years he has paid for a new batch of airlplanes. I dont remember the years enough to bet on it but 8 is close enough for my point. US air gives MESA a contract for 50 rj's for 10 years Then MESA makes enough to buy those 50 RJ's and make a profit to boot. So therefore, when US airways says they cant afford to buy RJ's that is not really true. AS they DO buy these airplanes, the only diff. is when the note is returned to the owner the title says Ornstien not Siegal Outstanding operation "Dave".

 

[usramperTPA]

Wholly Owneds are the way to go. Obviously the employees of a WO have more of an interest in the company and its fate than some contractor.

Light,

I totally agree with you on this point, vendors are not the answer to our problems. Sure they do the work and provide the service cheaper, but they don't always provide the best customer service that we WO's can and do. The vendor is only a middle-man between us and the customer, so most of the time they do not provide the same personal service that we do. Their attitude is "we get paid whether the flight goes or not" or even "it's not our customer, so why give a s##t!" Maybe I'm wrong, but this is the general perception I've always gotten from the non-WO outfits and even some of our other vendors.

 

[TBONEJ4J]

......"we get paid whether the flight goes or not" or even "it's not our customer, so why give a s##t!"........

This is not a codeshare with these 'vendors'. This is a Franchise. That's the US Airways Logo painted on the tail and the passengers are welcomed aboard a US Airways flight.

If those 'vendors' don't give a s##t, every US Airways employee needs to be worried. The passenger might have a wonderful experience on the A330 from FCO to PHL, and then gets the 'don't give a s##t' product from Mesa or Chautauqua on the connecting flight home. Which one will they remember when they book their next flight?

 

[Light Years]

I think the contract carriers are one of the biggest threats to this airline and its employees. What can we do?

"next week on 20/20... it says US Airways, but who is really flying your plane?"

 

[cavalier]

I think the contract carriers are one of the biggest threats to this airline and its employees. What can we do?

"next week on 20/20... it says US Airways, but who is really flying your plane?"

What's happening is scary for the working men and women who have no real education or at least a trade in this country. The airline industry is not immune to this phenomena that is prevalent everywhere as we go into a new world economy, and this of course will be much to the chagrin of the American workers. This new world economy will drag the American worker down and at the same time bring up the third world countries. It's happening folks, all you need to do is open your eyes to see it. It started with NAFTA/GATT. This makes business owners extremely wealthy bringing them beyond their wildest dreams and at the same time brings down the working class. All the bitching and moaning, union solidarity and fighting by us, the workers, will only go so far. This is something that will not be changed as the flood gates were opened several years ago with the famous saying they we would hear a “giant sucking sound as our jobs leave this country“. That little funny talking Texan man was correct, because it’s here and now. There will still be workers left of course, but the numbers of the ones left standing will pale in comparison to only a few years ago. Yea, LUV and other carriers make what we do and even more, but there is a lot less of them making it too. This is reality like it or not. I personally think it stinks, but it is reality none the less and it's staring the U employees in the face.

 

[PITbull]

Cav,

YOur statments are very profound. What helped many of those workers who never received higher secondary education.... were the unions and the ability of workers to act as a "collective voice" in the work place. Now that the unions (for the moment) are getting slapped around, folks need to enroll in some kind of trade or secondary education.

I tell my children this frequently. Take advantage of living at home and get educated, eduated, eduated. I tell my son, "Go and get a degree, and when your finished with that, go get a "trade" as well. I tell him that ad nausem and so often that it has become his "main stay" in his personal goals.

The reason many of the employees of U have to take a back seat is becasue many of their peers never received more than "high school" diploma. U understands their work force and has taken advantage of this fact. This is why they have been able to put the fear of God in their workers, because they know and have studied their vulnerbilities in the market place. For many who have degrees and voted no (because they knew that could find work else where for the same amount) were silenced and deafened by their vote becasue they were out voted and out numbered by those who had much fear and never plannedahead just in case the "status quo" for them could change.

I suggest, everyone start moving and planning ahead now, for just in case. This way no one will ever be able to control your path in life or destiny with threats of taking your livlihood.

 

[BoeingBoy]

I agree with basically everything posted in this thread - except one. Our w/o express are not LCC's in the traditional sense, i.e. LUV, JBLU, etc. Because they (the w/o's) operate smaller a/c, their CASM is higher than U's mainline and considerably higher than the LCC's.

That aside, I agree that the w/o's SHOULD have gotten the RJ flying from the start for many of the reasons given by others in this thread.

If I could have been "czar for a day" when the negotiations that allowed all these RJ's were taking place, I would have added two restrictions:

1) U can have all these RJ's IF & ONLY IF they are flown by the w/o's, and
2) the w/o's and mainline are combined into one bargaining unit with one seniority list (I'm speaking only for the pilots on this one - the other employee groups might think differently)

Unfortunately, I don't believe Dave & pals would have liked the idea. They would rather provide Mesa & the other contract express a profit because they can probably operate the RJ's for less than the w/o's while making that profit, given the pay, benefits, etc of the Mesa's vs the w/o's.

Additionally, Dave & pals LIKE having multiple w/o's so they can pit them against each other (and against the contract carriers) to get concessions. Hence Dave's statement during bankruptcy that the first w/o to negotiate concessionary contracts with all employee groups would get RJ's first. Piedmont was the first to do that. However, PSA is the first w/o to get RJ's since their new contracts result in the lowest costs of the w/o's.

I'm sure Dave would have predicted dire consequences if faced with the additional restrictions I've listed (he threatened liquidation without those restrictions). I would have been tempted to call that bluff. My union chose the "live to fight another day" philosophy. Unfortunately, "living to fight another day" only works if you actually fight another day. Always seeing another day as being sometime in the future merely results in being surrounded by the shambles of peoples lives.

 

[Light Years]

Another benefit in mgmts eyes to the"Express Alliance" aside from the obvious whipsawing and protection from labor action or shutdowns (see Midways demise, no big deal compared to the Comair strike) is the sellable US Airways.

When this company is sold they want it to be as small as possible. They want a skeleton fleet and workforce to be easily merged into another carrier. They dont want 500 mainline jets and 800 RJs and related employees for integration. They want just a mere suggestion of US Airways if you will. The surviving carrier can pick and choose which contracts they will renew.

I'm always harping on this on here but I truly believe this is one of the biggest issues facing US employees. We are not a global or even national airline- we should have been, but the parade of poor decisions had US a glorified regional even pre 9/11. <THIRTY TO ONE HUNDRED SEAT REGIONAL JETS CAN FLY ALMOST ALL OF US AIRWAYS DOMESTIC ROUTE SYSTEM> This is the business plan and it is being done WITHOUT US. This is the same as the Airbus farmout- our very airline is being farmed out. HALF of our flight attendants and pilots have been laid off and replaced by contractors- are the senior folks not seeing this? CWA is having thier stations converted to mainline express and some stations are staffed by these commuters on the ground as well.

As extreme as it sounds, no more should be given until these other airlines are off the property and our employees are brought back. We need RJs right now so keep the codeshares in place until they can be replaced, keep one or two small turboprop operators around for EAS and small town service. MDA and the WOs should be merged into a single division of US Airways and eventually be the single operator. Two contracts per work group- long haul and short haul. Furloughees can flow back to the long haul division when the time comes. With the planned growth in RJs there should be no reason to furlough a single employee of US or its subsidiaries. I'll go out on a limb here and say that I'd even be willing to give the 100 seaters (replace 737s with EMBs) to the lower cost division for the sake of competition (it's inevitable that the other majors will get there, and its an effective tool against the LCCs)- with the promise of mainline growth (transcon, transatlantic, Latin America, building of new markets).

The labour cost excuse is over. We've given. We ARE low cost employees for our size and age as a carrier. If they were serious about lower employee costs, why are the lowest paid employees laid off and the highest still there? Why is our management so highly compensated for a unanimous failure of a company? Why is the company so ineffiecient? The key, as we've all noted is work rules. The airline could be more efficient. But this would have to be an effort between management and labor. If they continue to alienate, abuse, and get rid of employees, and try to divide and conquer by stealing and outsourcing our work, the end is near.

 

[PITbull]

Boeing Boy,

Couldn't agree with you more on every single comment you made on your above post, specifically, and with emphsis on your last paragraph.

 

[PITbull]

Light years,

The answer to your last paragraph is because of union contracts whose sole premise is based on preserving "seniority, junior folks basically took our place. If management had the choice and there were no unions on the property, they would have furloughed by least productive in their view, probably older employees in age and service whose prospects to replace that employment would be more diffiult because of age.

Your thoughts and implication of merging the w/o is in talks with management with MDA as we speak, so that eventually having one seniority list on MDA would then be a "gate way" to mainline, of course having exhausted all the mainline furloughees first. This creates major debate with management for some odd reasons, but none the less, a worthy fight and pursuit in negotiations with the committees