ASA PBS vote food for thought

ClearedToThe

ClearedToThe

Well-Known Member
First, can someone please point me where the documentation is that states something to the effect of "ASA must be the 2nd lowest cost DCI carrier by 2011(?) or is subject to...". I have been unable to find that language anywhere in the Skywest, INC annual report.

Second, just looking at Republic, Pinnacle, and Skywest, I have come up with the following figures from the respective annual reports.

Holdings Company Labor Cost as a % of operating expense
RAH 21%
SKYW 23%
PNCL 27%
(I did not have time to look at other carriers percentages, but this should be fairly representative)

My point is this...ASA is pushing very hard to get PBS to pass since they are leading everyone to believe "the sky is falling" with respect to our labor costs not being competitive. Now granted, the SKYW figure contains both ASA and Skywest Airlines figures (as listed in the SKYW annual report). But the table above would indicate otherwise that ASA's labor costs are so out of control.

However, since the figures presented are just a percentage, the SKYW overall operating expense (the denominator in the percentage calculation) could be very high, thus artificially making the labor percentage low. Now if this is the case, management is barking up the wrong tree initially in lowering their operating expenses by going after the pilot group for consessions in the form of PBS. What they should ALSO be looking at is EVERYTHING ELSE that is a part of their operating expenses - which they do not seem to be doing. The do, however, seem to be trying to squeeze as much as they can out of the pilot group (read: the easiest way to get their operating costs down).

I ask that when you consider your choice for voting on PBS that you look at the cold hard numbers in the company financials in comparison to the other DCI carriers in making the most educated decision - not just the weekly emails from the union and the company.

Fire away...
 
The Sky is always falling when Management / The Company wants something. Without serious language PBS will become a nightmare. It happened at Mesa, obviously -- apparently Unstacking means "your ass is ours, son!"
 
ClearedToThe said:
I ask that when you consider your choice for voting on PBS that you look at the cold hard numbers in the company financials in comparison to the other DCI carriers in making the most educated decision - not just the weekly emails from the union and the company.
Click to expand...

The company has not sent a single email discussing or even mentioning PBS. That was part of the deal with the union, ALPA is the only point of communication with the pilot group on PBS.

The most convincing argument for voting PBS in is we will definitely get PBS in our next contract. We may as well vote it in now and fix the issues in the next contract instead of taking our chances with it later. I'm kinda on the fence about it, but definitely looking forward to the road show.
 
I find it very hard to believe that 9E's labor accounts for that much of their operating expense. Where did you get the data? Not saying you're wrong, I'd just like to double check it from our end.
 
kellwolf said:
I find it very hard to believe that 9E's labor accounts for that much of their operating expense. Where did you get the data? Not saying you're wrong, I'd just like to double check it from our end.
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It could be that their other costs are lower (or they have less pass thru costs), therefore labor is a bigger percentage.
 
With skywest and ASA having two separate lists it doesn't bode well for the more expensive of the two. Whipsaw city...
 
wheelsup said:
With skywest and ASA having two separate lists it doesn't bode well for the more expensive of the two. Whipsaw city...
Click to expand...

The nature of the beast is that is that Skywest Airlines will always be cheaper than ASA for one reason...ASA has a union and Skywest does not. PBS will not change this. If ASA is 3% more expensive (with PBS) or 5% more expensive (without PBS), ASA is STILL more expensive. The only thing PBS will do is screw over the more junior half of the ASA pilot group.

In summary, contrary to what the kool-aid promises, PBS will NOT allow ASA to grow and gain more flying AS LONG AS asa is owned by Skywest Inc - it will STILL go to Skywest Airlines.
 
kellwolf said:
I find it very hard to believe that 9E's labor accounts for that much of their operating expense. Where did you get the data? Not saying you're wrong, I'd just like to double check it from our end.
Click to expand...


We don't pay leases on 124 -200's. It's all in how the accountants play with the numbers.
 
ClearedToThe said:
The nature of the beast is that is that Skywest Airlines will always be cheaper than ASA for one reason...ASA has a union and Skywest does not. PBS will not change this. If ASA is 3% more expensive (with PBS) or 5% more expensive (without PBS), ASA is STILL more expensive. The only thing PBS will do is screw over the more junior half of the ASA pilot group.

In summary, contrary to what the kool-aid promises, PBS will NOT allow ASA to grow and gain more flying AS LONG AS asa is owned by Skywest Inc - it will STILL go to Skywest Airlines.
Click to expand...

:yeahthat:
 
ClearedToThe said:
First, can someone please point me where the documentation is that states something to the effect of "ASA must be the 2nd lowest cost DCI carrier by 2011(?) or is subject to...". I have been unable to find that language anywhere in the Skywest, INC annual report..
Click to expand...

I remember digging for it but can't remember finding it. I know it exists but I was thinking it was fall of '09.
 
Ok, found the appropriate filing and either it's not there or it is one of the **s. For your reading pleasure:

http://edgar.sec.gov/Archives/edgar/data/793733/000110465905043902/a05-16042_1ex1d2.htm

About halfway down is Article 11. Term and Termination. The only part of that left to the imagination is E. (1) (xi). Maybe it's there but who knows?

Also on further reading, it looks like the contract rate is renegotiated every 5 years and that will come up in September of this year (I was a year off earlier). See 'rate setting' in Article 3, section J. Maybe Delta gets good leverage if ASA hasn't brought labor costs down?
 
ClearedToThe said:
It is from their annual report on the investors section on the pinnacle holdings website.
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The 2007 one? That's the latest one I saw. But, like Ken said, if you don't have a lot of other costs, I could see it being 27%. The only overhead we've got on our airplanes is the leases on the -900s. The way the former NWA agreement is written, most of the costs are just passed along to NWA (the New Delta). So, if they just straight up take those out of the equation, well, then I'm surprised labor is ONLY 27%. We don't pay for fuel unless we want extra above what's required for the flight. We don't pay for 124 of our 140 airplanes. I'm not sure if we pay for spare parts and inventory expenses, but that may be another cost.
 
You're asking yourself the wrong questions. Who cares whether PBS makes the company cheaper to operate? That's not your concern. That's management's concern.

Your question should be "is PBS good for the pilots?" Normally, I would say "no." However, your MEC did an incredible job in negotiating your PBS LOA, and I think the answer is "yes" in this case. That's all that matters. Who cares about the company's costs?
 
I suppose the concern is when the Union is the one displaying the concern for the company.

Appears there is more to ASA's staffing issues, and it's not the company keeping it where it is.
 
ATN_Pilot said:
You're asking yourself the wrong questions. Who cares whether PBS makes the company cheaper to operate? That's not your concern. That's management's concern.

Your question should be "is PBS good for the pilots?" Normally, I would say "no." However, your MEC did an incredible job in negotiating your PBS LOA, and I think the answer is "yes" in this case. That's all that matters. Who cares about the company's costs?
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There's whats best for the pilots now and what's best long term. If not voting PBS shrinks the airline by 50% over the next 5 years I would bet those that lost their jobs would rather have PBS.

Unfortunately the folks at the commuter level really have no leverage the way each individual contract is written. Become expensive and you lose your job. Or in TSA's case even if you're cheap you're still not cheap enough.
 
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