Change is in the Air for Midwest Airlines

[Polar742]

I'd really take a look at a couple things.

First, of course, is the F100 fleet. It fit a very specific niche, and why it's not around.

Second, Midwest was a standalone operation of 9 airplanes. Try to come up with some numbers. You can figure out what the airplane generated in revenue based on the company's pre-bankruptcy numbers. I think you'll be surprised, from a budgeting standpoint, adding in all the fixed costs, of how short the revenue stream would be for the airline.

Third, PSA is a WAYYYYYYY strawman argument. They never had a stand-alone operation. At the peak they ran about what? 30 Dorniers or so? They had a large enough fleet size to support the operation. Also, they had the USAir network to rely on for revenue generation, so should they have been a "money losing" operation, USAir could have subsidized it.

Finally, HAL. Another niche airline in an extraordinarily unique situation. They have a great airplane, their initial operating experience was beyond expectatioins with it. My question is this: When Boeing decides the 717 will compete with the 737 replacement in 10 years, the 717s will be about 20 years old or so. I wonder how long Boeing will provide product support for that airframe, or do so at a reasonable cost. After all their job is to sell new jets.

Appearantly HAL's 717 is critical mass, so we can say that unless MidEx had 15 airplanes, they couldn't have been self-sustaining.

 

[kellwolf]

I don't see where I said anything remotely close to that, nor imply that. I think I have repeatedly said that RAH is a mainline and the contract should reflect that.

Kinda sounded that way, but it's possible I misread stuff, too. I've been known to have issues with reading comprehension from time to time.

What I think is important is realizing there are other factors driving the cost argument outside the labor CBAs. That is the entire point. That and with an orphan fleet of 9 jets, even if the pilots worked for free (again hypothetical), I don't see how the airline could have survived. I'd say F9 is a good case for existence at 30ish jets.

Honestly, I'd rather see a company fail than accept below board wages for the same flying. All it does is slam the roof down on those of us that don't want to be at a regional for the rest of our lives. This could also be stemming from my disgust at some of our 99% here at Pinnacle that were screaming STFD, but now that we're getting close to a possible strike are now saying "Eh, it's not THAT bad."

Where else I fail to see any good is your threat at the end of the statement. I don't see what that contributed to the discussion. What purpose does that serve?

See the above disgust. It's bleeding over into other avenues, it would seem.

 

[mxflyer]

If that was his actual quote, homeboy needs to hire a better publicist because you KNOW that's going to end up on a t-shirt.

:laff: I want one :laff:

 

[falconvalley]

Appearantly HAL's 717 is critical mass, so we can say that unless MidEx had 15 airplanes, they couldn't have been self-sustaining.

Perfect example of where the company was headed. They had 25 of them. They also had about 6 MD-80's or so, that they kept retiring and bringing back. Now they have 9 aircraft. It just so happens that RAH was able to purchase them for a bargain. How it got to this point is a long story, but it certainly isn't because of any "RJ" or "RJ pilot". RAH positioned themselves correctly when no one else did. Say what you want about TH. He really did want the airline to survive on its own. That's why he supported the sale to TPG, rather than AirTran. It's become clear that Midwest wasn't going to make it, even with the monetary support of TPG. So, the argument isn't about cheaper labor. Heck, he had it with Skyway. Skyway's payscale was even lower than RAH.

 

[meyers9163]

So, the argument isn't about cheaper labor. Heck, he had it with Skyway. Skyway's payscale was even lower than RAH.

Care to state your reason why? Last I checked there was a major difference between what the 717 guys are getting, and what an RAH guy flying a plane with just about the same number of seats will get? Also there's a huge difference between what the FA's are getting, dispatchers etc etc. So how can you say its not about doing things cheaper which would include labor?

 

[Polar742]

Apparently my point was missed.

My point was this: labor costs are but one component, and on this website that seems to be the only focus. I am not advocating anyone working for free, or at subpar wages or taking a contract for growth.

My hypothetical was merely to show that in a zero sum game for pilot costs Midwest would not have survived. To further illustrate that, I gave the extreme example of them working for free. In fact, some Aloha pilots did just that.

A greater point is that the MidEx guys did the right thing by not voting in concessions.

But, that again, this revolves an entire argument over the same crap I see on here time after time after time. It really makes this place tiring to read too. I don't think most people on here advocate working for peanuts, or that the RAH pilots have a contract reflective of their position in the industry. Sure lower labor costs contribute to the success rightly or wrongly, but there are other efficiencies also that contribute.

I was merely pointing out that there are other, bigger parts of the budgeting process, in MidEx's case, that overshadowed everything else that guaranteed the company would not have survived.

A fleet of 9 small domestic airplanes can not survive. The fleet is not at a point where it can be self-sustaining. The market for domestic has little to no pricing power, so even an airline like MidEx, with their premium service, would not have been able to generate enough revenue just to cover the basic costs. It's really that simple.

You can't compare an orphan fleet that is part of a bigger organization, although, historically speaking, those have not fared well in the long run. In an organization like a wholly-owned Express, all they have to do is show up when their told and run flights, even in the days of at risk flying.

It's a completely different game when a standalone airline doesn't have startup capital to keep expanding to push through to past the bucket sucking up cash and reaching a critical mass for self survival. Costs of marketing, a reservation system, hangar/office space, airport leases and what not are all borne by a very small number of airplanes, making the unit cost of each enormous.

Throw into that a parts supply that is not defined, and a product that competes with a manufacturers current offerings, and the reciepe for product support gets cloudy.

 

[meyers9163]

I guess we will see what is up BBs sleeve to get these planes full. I mean it sounds like the 50 seaters arent even full right now. I was on an IND-MKE and had 4 people on it including myself. Spoke with our gate agents in DAY and they seem to say the same about the loads out of DAY. So even with a lower cost now due to the pilots and other things, how do you get the load factor up? Should be interesting to say the least.

 

[falconvalley]

Polar can say it way better than I can. Yes, the companies want labor for cheap. What company doesn't? I'm just saying that it's not the primary goal of said companies. It's a popular goal right now because these things are being negotiated. You can consider it always a goal of every company to get labor for the cheapest possible. So, it's not really a big conspiracy. It's just big news. My point about Skyway was that if TH really had the primary goal of the cheapest labor, he had another certificate to work with. He turned that certificate in. In this case it's really all about the demise of Midwest and the fact that RAH made a move on them.