US Airways to Add Aircraft

[BoeingBoy]

US Airways renews call for dramatic cost cuts
Airline puts focus on winning work rule changes from unions

Wednesday, April 21, 2004
By Dan Fitzpatrick, Pittsburgh Post-Gazette

Hours after telling his board that David Siegel was out as chief executive officer, US Airways Chairman David Bronner dialed up the airline's four major unions with a familiar message: Dramatic cuts are still necessary.

Article

Jim

 

[ClueByFour]

The charts that accompany this article are interesting, and should be required reading for this forum (no matter what your position on any of the hot button topics o' the day).

 

[mweiss]

Interesting, indeed. Two facts come out pretty clearly:

1) Labor costs at US are still the highest among the nine listed airlines.
2) Non-labor costs at US (5.6 cents) are even more out of whack than the labor costs. It's over 20% higher than the next highest (AS's 4.6).

There are a few more subtle observations that I will make based on those data:
3) There is more than one successful business model in the current marketplace. AS has higher costs than HP, but still is profitable.
4) HP has successfully cut labor costs and non-labor costs; only WN has lower non-labor (3.3 cents vs. 3.9 cents).
5) Since US's labor contracts aren't appreciably higher than the competition, the work rules at US must be horribly inefficient. So much for "cool, northern efficiency."

 

[ClueByFour]

US is currently under enough pressure from GECAS to put RJs at Mesa, yet it's somehow going to come up with financing for mainline aircraft?

Bronner, who is "going to do it with or without the unions" is going to fund them?

Dorothy at 11.

 

[BoeingBoy]

mweiss,

"the work rules at US must be horribly inefficient"

Or it could be the system we work within is horribly inefficient.

Jim

 

[USA320Pilot]

Dan Fitzpatrick reported the meeting was a "positive step in protecting jobs, careers and communities and seeking to grow the airline in a way that is competitive on a sustainable basis," said board member Bill Pollock, who also is chairman of the US Airways pilots union. It "was a pretty encouraging day."

USA320Pilot comments: It's my understanding that if the company and the unioins agree on a plan to lower US Airways unit costs to an acceptable level than the company would regain access to the capital markets.

Regards,

USA320Pilot

 

[mweiss]

I equated the two, but perhaps I shouldn't. "Work rules" to you means contractual, doesn't it? OK, then...yes, the system is horribly inefficient.

 

[BoeingBoy]

Hey, just call me sensitive

Any time you see "work rules", it usually means contracts.

Jim

 

[BoeingBoy]

Here's a novel idea for adding mainline A/C....

Scrap all the RJ orders except 150 or so CRJ-701's and Emb-170's - they're the lowest unit cost RJ's allowed under scope. Use these to replace the Saabs, 328's, and many of the ERJ-145's - they're higher unit cost. Keep some B1900's for EAS cities - don't need more capacity there. Keep the Dash-8's - for my money they're the most comfortable for turboprop markets.

Now use some of the financing that was originally for the other 300+ RJ's to acquire 50 or so mainline jets - 320 series for domestic and some widebodies for more international. Fly the heck out of the 320's in point to point longer haul flying - NE to Fla, NE to out west, and Caribbean. Low unit costs for all these new seat miles - I would guess 7.5 cents if the average segment length was in the jetBlue range (1200-1300 miles).

Lets GECAS off the hook for a good chunk of the financing they're so worried about. Pretty quickly lowers our overall unit costs, since all the non-labor costs and much of the labor cost would be spread over more seat miles. Growth would do wonders for morale.

Jim

 

[geo1004]

5) Since US's labor contracts aren't appreciably higher than the competition, the work rules at US must be horribly inefficient. So much for "cool, northern efficiency."

Inefficient labor work rules coupled with the relatively short distances of US's flights is not a good recipe.

 

[delldude]

USA320Pilot comments: It's my understanding that if the company and the unioins agree on a plan to lower US Airways unit costs to an acceptable level than the company would regain access to the capital markets.

Regards,

USA320Pilot

an acceptable level...in whose book??

 

[cavalier]

an acceptable level...in whose book??

This should do it, maybe..


http://www.dpw.state.pa.us/index.asp

 

[El Gato]

mweiss,

"the work rules at US must be horribly inefficient"

Or it could be the system we work within is horribly inefficient.

Jim

Hey BoeingBoy, why don't you tell us all how many hours YOU flew last month?

 

[BoeingBoy]

El Gato,

No problem - 6:30. Unfortunately for you, you picked a bad month - I had back surgery for a ruptured disk and only flew the 31st (the first day of my first trip back after the surgery)

Now, this month I'm projected for 81:55 block & pay. I've still got one 4-day trip left so that could change.

Ok, your turn - how many hours have you been unproductive at work this month?

Jim

 

[robbedagain]

Dan Fitzpatrick reported the meeting was a "positive step in protecting jobs, careers and communities and seeking to grow the airline in a way that is competitive on a sustainable basis," said board member Bill Pollock, who also is chairman of the US Airways pilots union. It "was a pretty encouraging day."

USA320Pilot comments: It's my understanding that if the company and the unioins agree on a plan to lower US Airways unit costs to an acceptable level than the company would regain access to the capital markets.

Regards,

USA320Pilot

and will there be any hope for those of us still at the outsourced places calle mainline express cities? and we're the ones that shouldnt have to give up more as we have taken a real hard beating