We need cheap fares to compete....

[MCI transplant]

As I've posted before, airline deregulation has been good to the-now 300 million Americans and not so good for the several hundred thousand employees of the legacy airlines. Of course, 31 years ago, the legacies employed fewer employees than they do today, despite the widespread job losses suffered in the past eight years. But non-airline Americans have benefitted from much lower airfares (in real terms).

IMO, government has no place deciding which airlines can fly which domestic routes and determining the fares. Others will disagree. I think they're out to lunch, but everyone is entitled to their opinion.

And yes, I agree that the failing airlines should have been allowed to fail. For eight years now, the lifeboats have been overloaded - time to toss some out so the others might thrive. But sadly, that hasn't happened.

<_< ------ As a "frequent flier", with really no real personal stack in this matter, I can understand your position.------ You've got a good deal going for you, and don't want anything put in place that would change that!------ What your saying is that you'd rather stand back, as a spectator, and watch the Industry implode in on itself! -----Enjoy it while you can, because there will come a time when the price of that ticket will be a whole lot different!

 

[FWAAA]

As a "frequent flier", with really no real personal stack in this matter, I can understand your position. You've got a good deal going for you, and don't want anything put in place that would change that!

It's amazing how you misunderstand my position and how much you've misstated my feelings on this issue. It really calls into question the reading comprehension here.

I've been fortunate and can afford to fly no matter the fares, so fare hikes would have limited impact on me. I don't live paycheck to paycheck. But many of our country's 300 million citizens could not afford to fly if the regulated fares still existed (adjusted for inflation for the past 30 years). Society is better off with cheap fares and unregulated price competition even if that makes life suck for the several hundred thousand who came to expect outsized salaries in the old regulated environment.

What your saying is that you'd rather stand back, as a spectator, and watch the Industry implode in on itself! Enjoy it while you can, because there will come a time when the price of that ticket will be a whole lot different!

As I've posted numerous times, the industry is plagued with overcapacity. There are far too many airlines offering expensive seats and too few offering cheap seats. That's why the cheap seat airlines have grown and the old legacy expensive seat airlines have shrunk. Not only have they shrunk, they have had to resort to price matching the cheap seat airlines at every turn.

I've posted numerous times that everyone would have been better off if US and UA had folded in 2001-02. Their pieces (the valuable ones) could have been snatched up by the stronger carriers. Same with DL and NW, although had US and UA folded in 2001-02, DL and NW might not have ended up in Ch 11.

You frequently post that there will come a time when ticket prices are finally a lot more expensive. When will that occur and what will cause it? Legacy airline execs would love to hear the answers, as they've wanted higher ticket prices for more than eight years now, with only limited success.

 

[MCI transplant]

<_< -----FWAA---- No, I don't think I've misinterpreted your position. And I do respect it! The Airline Industry will always need people like you that "don't live pay check to pay check"!---- But the problem here is that, we the people, who keep you, and yours, safe on every trip you take, are!---- As I stated earlier, a lot of people feel that cheap fares (Air travel) are a God given right. If the Government perceived, in all it's wisdom, that to be true, It should subsidies the Airlines! ( And God forbid! Neither one of us would want that!) ---- You referred to "out sized salaries", do you have any idea the time, resources, and expense, involved in becoming, say a Pilot? Or an AMT? Do you know, or care, about the responsibility (Liability) taken on daily by these people? ------ I didn't think so!

 

[FrequentFlierCA]

You have lost pricing power to Southwest precisely because labor costs are too high. You're being paid on regulation-era wage scales and the company is having to compete with deregulation upstarts like JetBlue, whose lower costs allow them to constantly under AA on price.

 

[aamechntx]

You have lost pricing power to Southwest precisely because labor costs are too high. You're being paid on regulation-era wage scales and the company is having to compete with deregulation upstarts like JetBlue, whose lower costs allow them to constantly under AA on price.

Labor cost? C'mon man. Whats the difference in pay? I got in trouble for posting the latest collective bargaining agreement between AMFA and LUV's mechanics. Please research it for yourself to compare the outsized salaries. Every employee at LUV, with maybe the exception of the pilots make more in overall compensation. They have become a legacy carrier too. Can you not admit that just maybe AA's business model is slightly flawed?

 

[JimJimmyJim]

You have lost pricing power to Southwest precisely because labor costs are too high. You're being paid on regulation-era wage scales and the company is having to compete with deregulation upstarts like JetBlue, whose lower costs allow them to constantly under AA on price.

How much should we make if we are so overpaid? $9, $10 an hour? What do you think would be fair FrequentFlierCA?

 

[FA Mikey]

Labor cost? C'mon man. Whats the difference in pay? I got in trouble for posting the latest collective bargaining agreement between AMFA and LUV's mechanics. Please research it for yourself to compare the outsized salaries. Every employee at LUV, with maybe the exception of the pilots make more in overall compensation. They have become a legacy carrier too. Can you not admit that just maybe AA's business model is slightly flawed?

The difference in pay is small and even higher in some cases. The differences are in work rules more than pay.

SWA has lower costs because of less restrictive work rules as well as, the fact that they have a simplified system with a single AC type for crews and maintenance.

 

[FA Mikey]

How much should we make if we are so overpaid? $9, $10 an hour? What do you think would be fair FrequentFlierCA?

Its always a laugh to see the management type complain of the over compensated masses.While at the same time saying nothing of the greedy executives who make obscene salary's and other perks and rewards. Too bad unions cannot stack the companies negotiating team with their friends, and pals, like executives do with the executive compensation committees.

 

[Rogallo]

because labor costs are too high.

You are lacking knowledge or comprehension of the thing specified.

 

[Barfbag]

Its always a laugh to see the management type complain of the over compensated masses.While at the same time saying nothing of the greedy executives who make obscene salary's and other perks and rewards. Too bad unions cannot stack the companies negotiating team with their friends, and pals, like executives do with the executive compensation committees.

You can't have one without the other, the fact is that we ( Americans ) are spoiled.

We, ddn't cry ( about CEOs) when housing prices were climbing and 401K were almost 801K, and jobs were being exported to Mumbay, and elsewhere.

I didn't see Labor unions marching on DC, for higher air fares, during those fat years.

Labor unions don't care about us, the airline worker, they each have their own agenda.

Labor wants air prices down, and could care less about your future, your homes or your kid's college education.

Like McDonalds, Airline Transportation is fast becoming Temporary employment, where only the youngest come and spend a few years before going on to better carreers.

 

[jersey777]

What planet have you been on? The APFA has been fighting for flight attendants since 1977. During times of boom and bust. Even when airfares were historically high we have had to fight for everything we have. Do you have any idea how far we have come due to Unions? It is due to the my union that we have decent pay, retirement and work rules. It wasn't until 1973 that males could be flight attendants. In 1977 we practically had NO retirement package to speak of. It wasn't until 1995 that we received full pay for deadheading...the list goes on and on. NONE of this was done outside of hard fought negotiations. Unions are what made the middle class!!!!! AND...their demise is what is leading this country to rely on the government for health care and retirement benefits.

 

[Barfbag]

What planet have you been on? The APFA has been fighting for flight attendants since 1977. During times of boom and bust. Even when airfares were historically high we have had to fight for everything we have. Do you have any idea how far we have come due to Unions? It is due to the my union that we have decent pay, retirement and work rules. It wasn't until 1973 that males could be flight attendants. In 1977 we practically had NO retirement package to speak of. It wasn't until 1995 that we received full pay for deadheading...the list goes on and on. NONE of this was done outside of hard fought negotiations. Unions are what made the middle class!!!!! AND...their demise is what is leading this country to rely on the government for health care and retirement benefits.

Again; every union has their own agenda, until that changes expect airlines wages to continue to drop, the entire industry is on free fall unless ALL labor unions speak as one. Passengers have no brand loyalty, Southwest, Delta, whatever, who ever has the lowest fares wins, so you and all of us who thought of this business as a career loses.

 

[FA Mikey]

There own agenda is to the members of that union. Employee wages are not the down fall of the this industry. Bankrupt carriers who have been allowed to continue to fly, sucking the life out of those who had decent balance sheets and sound business practices. Had those been allowed to die, the industry would be in a stronger position today.

Unions may have made the middle class, in industries where we make and move real products, like cars, and steel, and in railroads and airlines. But the fat cats had a better idea. Make this a country of consumers and not producers. They get rid or weaken the industries that contribute to a producing industrial economy. Then enrich themselves by moving the middle class jobs to third world counties. concentrate the wealth among themselves and play with it in stock and future and energy markets.

 

[MCI transplant]

<_< ----Unless something is done to brake the downward spiral of the Industry we will end up with two, or three, mega-multinational Carriers. The likes of Southwest, and or, Jetblue many be one of them. Or they will be merged, or bought out, by one, or more, of those still standing! At that point, competition will be dead, and so will "cheap tickets!" ------- It many take a few years, but either way, it's going to get interesting! :unsure: ------Just one man's opinion!

 

[Bob Owens]

You have lost pricing power to Southwest precisely because labor costs are too high. You're being paid on regulation-era wage scales and the company is having to compete with deregulation upstarts like JetBlue, whose lower costs allow them to constantly under AA on price.

Thats a lie. Our wages are 40 to 50% lower than they were during the regulated era. SWA pays a lot more than any of the legacies, even Jet Blue pays more.

Labor costs are only one factor in what drives CASMS. You can have higher "labor costs" and still end up having lower CASMs. Several of AAs competitors have lower "Labor costs" but higher CASMS, because they pay other companies to do work that they could do. When you pay money to another company to do work for you it doesnt get counted as a "Labor cost". In the end it still goes into your CASMs.

Whereas competitors like UAL have sent out a lot of their work their maintenance costs went up, not down, sure the labor part of their maintenance costs went down but the total costs went up.

SWAs advantage is not with what they pay their workers, they pay them the best, its with the entire structure of the carrier. They keep costs down with a simplified fleet, secondary airports and effecient scheduling. Thats why the legacies cant compete on price, while SWA serves New York by paying $235 to land their max capacity 737 in ISP, AA pays $4000 to land their three class 777 in JFK. So SWA pays around $1.50 while AA pays around $13.00 per head on the landing fee.