Here comes the ax!!!

sherpa

sherpa

Well-Known Member
From the latest CJC update from our new integrations director of ops

“Somewhere around 400-500 aircraft will come out of the network as regional contracts start to expire in 2012. Competition for those contracts really starts now, so we are strengthening our team to make sure both airlines are in the best possible position to compete.”

What he means to say is "Run for the exits! This segment of the industry is screwed"

Here's to hoping we're all outta here (to somewhere better) by 2012

~sherp
 
We have been getting emails like this from our director of flight ops since the beginning of time. He is quick to send out doom and gloom emails but never sends any that are good news. All part of the plan to scare us into giving them anything they want. It's working for the "well you should just be happy to still have a job!" crowd.
 
Maybe because I am always on the lookout for it, but my first thought was that they were starting this campaign to get us to not shoot too high for this contract. To this I say, there is a cost to doing business. pay me. you figure you the rest. not my problem. my pay is my problem.
 
sherpa said:
Maybe because I am always on the lookout for it, but my first thought was that they were starting this campaign to get us to not shoot too high for this contract. To this I say, there is a cost to doing business. pay me. you figure you the rest. not my problem. my pay is my problem.
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If you don't shoot high for your contract, that's money in the pocket for the guy who wrote that.

Your compensation is very small part of the cost structure of an airline, but a very convenient rheostat to tinker with from management's perspective.
 
Doug Taylor said:
Your compensation is very small part of the cost structure of an airline, but a very convenient rheostat to tinker with from management's perspective.
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I have a very difficult time believing that. Especially, in a labor driven business such as air travel. Without diving into income statements, I would venture to say that the cost of the pilot labor force fully burdened is a very significant weight on the income statement and gross margins (if classified in the cost of sales - operating margins if in the G&A line).
 
Labor is evil right up until you need them to purchase your product.

I KNOW, I KNOW, Merit, Labor is the devil!
 
Ya know Merit... EF&I says differently.

But you don't trust Unions 'cause labor is evil and all so I guess that doesn't really mean anything to you.
 
I'm at the commuter hotel in NYC and it's so full of evil, the skies have darkened, just like Mordor in Lord of the Rings.

Oh... Wait, it's sunset. WOO!!
 
Doug Taylor said:
I'm at the commuter hotel in NYC and it's so full of evil, the skies have darkened, just like Mordor in Lord of the Rings.

Oh... Wait, it's sunset. WOO!!
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No wai d00d, it's the Stay Puft Marshmallow Man coming! We're talking about old testament kinda stuff here! Fire! Brimstone! Cats and dogs, living together!
 
"That's the scariest thing you could think of?!" :)

The hotel is so evil, there was an FO from another airline that sat in the front seat and wore his FREAKING hat for the 20 minute ride inbound.

The captain would say something and he's just answer: "WHuhh?"
 
The hotel is so evil, there was an FO from another airline that sat in the front seat and wore his FREAKING hat for the 20 minute ride inbound.
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At my company, yeah, very scary. But then again people who live in hotels are creepy.
 
meritflyer said:
I have a very difficult time believing that. Especially, in a labor driven business such as air travel. Without diving into income statements, I would venture to say that the cost of the pilot labor force fully burdened is a very significant weight on the income statement and gross margins (if classified in the cost of sales - operating margins if in the G&A line).
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Depends on your definition of "very small part." AirTran's total CASM is about 10-11 cents, depending on what fuel prices are doing for any given quarter. The total, all-in, pilot CASM (PCASM) is 0.82 cents, or about 7-8% of total costs. If we achieved every single thing we were asking for in contract negotiations, our total CASM would go up about 0.2 cents. When you look at CASMs across the industry, none of them are close enough for increases in PCASM to make a difference. The problems are really all fuel-related. The carriers that do the best job managing fuel expenses are the ones that keep their CASMs low. Why? Because fuel is nearly half of an airline's total CASM with current fuel prices.

Sorry, but labor isn't the problem. We don't cost nothing, but we aren't a big piece of CASM, either.
 
Airline Pilot labor costs may be smaller but total airline labor costs are the 2nd largest cost to airlines. Labor is also the largest variable cost to airlines. Labor used to be the highest cost but that now belongs to fuel. However fuel is a fixed cost so management puts a bullseye on labor when fuel rose to what it is today and remains somewhat unpredictable.
 
Fuel is not a fixed cost. You're regurgitating management nonsense. One only needs to look at SEC filings from the different airlines to see how much all-in fuel costs really vary from carrier to carrier. It all comes down to hedging strategies, tankering programs, operational practices, etc. A management team that claims it is unable to reduce fuel costs is nothing more than a lazy and incompetent management team.
 
Trip7 said:
Airline Pilot labor costs may be smaller but total airline labor costs are the 2nd largest cost to airlines. Labor is also the largest variable cost to airlines. Labor used to be the highest cost but that now belongs to fuel. However fuel is a fixed cost so management puts a bullseye on labor when fuel rose to what it is today and remains somewhat unpredictable.
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Fuel is not a fixed a cost. Do some research.
 
ATN_Pilot said:
Depends on your definition of "very small part." AirTran's total CASM is about 10-11 cents, depending on what fuel prices are doing for any given quarter. The total, all-in, pilot CASM (PCASM) is 0.82 cents, or about 7-8% of total costs. If we achieved every single thing we were asking for in contract negotiations, our total CASM would go up about 0.2 cents. When you look at CASMs across the industry, none of them are close enough for increases in PCASM to make a difference. The problems are really all fuel-related. The carriers that do the best job managing fuel expenses are the ones that keep their CASMs low. Why? Because fuel is nearly half of an airline's total CASM with current fuel prices.

Sorry, but labor isn't the problem. We don't cost nothing, but we aren't a big piece of CASM, either.
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Interesting-never knew labor was that small a part of a carrier's CASM...

I'm curious though....I know it varies from carrier to carrier and of course what price of jet fuel is at any given moment, but how much of an airline's CASM is directly related to fuel costs? I've heard before that fuel is about 50% of an airline's total cost, so in AirTran's case, that's about $0.05, but that seems a little high to me. Anybody know for sure?
 
sherpa said:
From the latest CJC update from our new integrations director of ops

“Somewhere around 400-500 aircraft will come out of the network as regional contracts start to expire in 2012. Competition for those contracts really starts now, so we are strengthening our team to make sure both airlines are in the best possible position to compete.”

What he means to say is "Run for the exits! This segment of the industry is screwed"

Here's to hoping we're all outta here (to somewhere better) by 2012

~sherp
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Yay, now you guys get the wonder that is MG as the leader of the "integration," whatever that is. Look out for the memos.....
 
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