this must kinda suck, eh?

[ QUOTE ]
methinks airline management needs to take a few pages out of Bethune's "from worst to first" about how Continental turned around after being in Chapter 11. ....Why not improve the product so that people actually are willing to pay a bit extra for it. Sounds logical to me. I'd pay a little extra to not be treated like a cow.

[/ QUOTE ]

Yeah, that all sounds great but.... the first advantage Continental has is they got their costs down considerably through their trips to BK. They have already faced what everyone else is experiencing now.

They improved service, but it had gotten really bad at their airline, so it needed to be done. Bethune was one who absolutely refused to increase leg room, saying it reduced revenue. Not surprisingly the airlines that did are putting the seats back in. People just aren't willing to pay more for it.

Also they headed out on international routes and reduced their exposure to LCCs. As Bethune has said often it is all about pricing power, and the majors don't have it.

I admire Bethune and the steady leadership he has shown at CAL. But it isn't a matter of just "fixing service" then charging more. Bethune's book was more about promoting CAL/himself than revealing any great truth.

People almost always say they'll pay more for this, that and the other. But when it comes to doing it, they pay the lowest fare they can find.
 
Best of luck to Amber, Doug, and everyone out there that will be affected by this news. The entire industry is such a mess right now, even the fractional pilots and corporate pilots I see everyday are struggling with new contract talks. Even with all the bad things happening we have to try our best to keep a positive outlook.

To all the younger people and aspiring airline pilots on this board, take note of what you are hearing. The career pilots on this board have a lot of great insight to real world aviation. It doesn't always turn out like the fancy brochure you got from that big name flight school. Not to discourage anyone from following your dreams, just be prepared for the challenges you may face along the way.

Again, best of luck to everyone affected by the cuts. Hang in there.
 
Guys....not to change the subject from Delta, but I came across this story about United. Looks like the concessions the pilots already have given is not enough..........pay cuts, no retirement, etc, etc isn't enough. Here's an excerpt and the link (bold is mine):
banghead.gif


"Even though our unit revenue performance was on par with our peers, the pricing environment prohibits us from recouping high fuel costs," said chief financial officer Jake Brace. "Given the urgency of United's situation and the stark financial reality in the entire industry, United believes that it will have no choice but to seek significant additional labor savings beyond terminating and replacing our pension plans."

http://www.miami.com/mld/miamiherald/business/10039595.htm?1c
 
Ugh!. This is really depressing stuff. I'm in shock to see these things happening in our once great Country.
We lost all manufacturing, we only make movies, music and porn. We will soon be a nation of prostitutes like Thailand.
This blows.
banghead.gif
 
[ QUOTE ]
[ QUOTE ]
unless of course, it was all a setup just to get what they want and then they'll start making money hands over fist, but i'm not really seeing or hearing that.
grin.gif


only time will tell...

[/ QUOTE ]

Please hang in there Kristie. Doug is sharp and will always make things go right.

[/ QUOTE ] hey hey, don't get me wrong.. I've been managing the bills for years now and we're doin just fine (have always stayed within or under our "means")... and i'm not too too worried about the money (just pissed off), we always make it work, i've got my job and we both have our side businesses.. doug has a ton of business ideas and i've got a couple of them which i'll be starting up here shortly. They'll only help in the long run! i'm more worried about what work rule/scope changes are in the TA (that's usually where management goes for the throat because it's not equated in $$ but in time) than anything else and so far, from what i'm hearing, it seems like the TA is quite one sided towards what management wanted.

and then the other thing i'm worried about is whether or not there's a "cutbacks" clause in there so as to dissuade what happened in the 90's (ie: gave money back, DAL profited a lot afterwards and didn't give any back to the pilots).

I'm also hoping to NOT see a stoppage in the monthly cap (from what i hear, they may have done away with the cap)... as in pilots working over duty time and getting fatigued more than they are!

like i said.. we'll see!

what's really interesting is that the TA's been talked about for over 24 hrs now, yet not one pilot has seen the actual raw verbage regarding it.. so everyone and their mother is STILL up in the air as to what's been considered "approved" by the MEC... isn't that bizarre? you'd think they'd start showing the TA around since the vote is only 2 weeks away (or less)
crazy.gif
 
[ QUOTE ]
Ugh!. This is really depressing stuff. I'm in shock to see these things happening in our once great Country.
We lost all manufacturing, we only make movies, music and porn. We will soon be a nation of prostitutes like Thailand.
This blows.
banghead.gif


[/ QUOTE ]that's where i come in and say VOTE PEOPLE! tuesday's the day.. put your ballot where your mouth is and get out there and let's change how things are going! the last how many years have really really changed the way we do things today and tuesday's vote is going to hopefully tell government what they NEED to hear...that the changes made were not all good (of course, that's IMO).

we can change it, but you gotta use your right to VOTE and get out there and do your duty!!

put your ballot where your mouth is and VOTE with your head!
grin.gif
 
WSJ does an excellent synopsis of how Delta's moves post 9/11 took them from financially strongest to weakest in the industry.

http://online.wsj.com/article/0,,SB109901331437659429,00.html?mod=yahoo_hs&ru=yahoo

Bottom line: When times get tough, you can't borrow your way to prosperity.

(I can never get these long links to post properly)
banghead.gif
 
[ QUOTE ]
WSJ does an excellent synopsis of how Delta's moves post 9/11 took them from financially strongest to weakest in the industry.

http://online.wsj.com/article/0,,SB109901331437659429,00.html?mod=yahoo_hs&ru=yahoo

Bottom line: When times get tough, you can't borrow your way to prosperity.

(I can never get these long links to post properly)
banghead.gif


[/ QUOTE ]

Does this one work?

WSJ article

(I can't tell if it's the right link since I'm not a WSJ subscriber and therefore can't access anything on the site.)
 
[ QUOTE ]
Does this one work?

WSJ article

(I can't tell if it's the right link since I'm not a WSJ subscriber and therefore can't access anything on the site.)

[/ QUOTE ]

Yeah that's the ticket.
 
[ QUOTE ]
We lost all manufacturing, we only make movies, music and porn. We will soon be a nation of prostitutes like Thailand.
This blows.
banghead.gif


[/ QUOTE ]

Well at least it will save me my annual trip to Thailand.
smirk.gif
 
[ QUOTE ]
DAL profited a lot afterwards and didn't give any back to the pilots).



[/ QUOTE ]

What do you think that huge raise DL pilots got in 2001 was? What do you think the past 3+ years of industry leading pay have been? That was your giveback for the profits of the 90's.

Unfortunately, we have now entered the not so profitable 21st century. Few airlines are making money (even JetBlue is talking loss in the 4th qtr) and it's probably going to be like this for a while.
 
Just wanted to address one thing I keep reading everywhere from airline management to people on this board, that people will always go where they get the lowest fare. That is COMPLETE bunk! If that were true we'd all be driving Kia's, Yugo's, Chevettes, and Escorts!

The only time people shop solely based on price is when they consider a product homogeneous, like milk. I battle this everyday in the insurance business. Many people view insurance as a product that is the same with every company, price being the only difference, BAH! There are huge differences between contracts that can mean thousands of dollars difference at claim time, even on personal lines policies. The problem is people don't realize the difference. Once you show them what's different about a policy, they're willing to pay more if they consider the difference worth the extra cost.

Delta should capitalize on this. They're a "legacy" carrier, a "Lexus" of the airlines. Instead of these cheesy ads showing a plane flying and touting how many destinations they offer world wide, how about an ad showing a guy getting on a plane and greeting the pilot & co-pilot who look like they just graduated high school, cracking jokes, etc? Then have a caption like, "Who's flying YOUR airplane? Fly with the BEST, Delta." IMHO, the key to price differentiation is to BRAND yourself. Capitalize on Delta's strengths and point them out to the public to make them willing to spend more to fly Delta. Certainly Delta has one of the best, most experienced bunch of pilots in the business. Wouldn't you agree, Doug?
wink.gif
Instead of cutting pay more to try and get lower fares, why not brag, "We pay more to have the best, most experienced pilots in the world. Who do you want flying your loved ones?" This is kind of like Michelin's theme of, "Because so much is riding on your tires," with the baby sitting in the tire. Now how many people pay extra for Michelin's because they're know to be quality? Guess what's on my Jeep?

Personally, I think they should start an ad campaign that touts their strengths, pump up their employee's to go above and beyond to make customers happy (even the unreasonable ones), and brag that you pay more to get more.

But hey, what do I know? I'm just an insurance guy with a marketing background!
wink.gif


Heath
 
The most suspicious part of this situation is the 5 year waiting period. If, (granted a big 'if'), the price of oil returns to historically normal levels, ~$38-42 a barrell, the airlines will be profitable again. This could happen next Wednesday, 03 Nov 04, it could happen next year after the elections in Iraq, or realistically, it could never happen.

However, if oil drops, and stays, the airlines will return to profitability. With a ban on pilot pay increases for 5 years, the people who will be rewarded are the folks occupying the managerial positions of Delta, et al. This is grossly unfair, especially in light of the work rule changes for pilots that will almost certainly still be in effect.

In light of the 'Blogging' story from earlier, I can certainly understand a certain host's reluctance to speak. This is completely understandable, though the fact that he has this concern is completely unjust.

Tangent, but what a wasted opportunity: as management of a major airline, why not demonstrate some transparancy with regards to the WHOLE financial picture? This is a radical idea, but why not operate as the military does with regard to pay and incentives? I can easily find out a ballpark figure of what everyone in the Air Force makes, from the newest E-1 to the Chief of Staff. This would eliminate discord amongst employees that is brought about by pay ambiguities. Also, this would make determining the true financial position of the organization clear for all stakeholders.
 
[ QUOTE ]
[ QUOTE ]
DAL profited a lot afterwards and didn't give any back to the pilots).



[/ QUOTE ]

What do you think that huge raise DL pilots got in 2001 was? What do you think the past 3+ years of industry leading pay have been? That was your giveback for the profits of the 90's.

Unfortunately, we have now entered the not so profitable 21st century. Few airlines are making money (even JetBlue is talking loss in the 4th qtr) and it's probably going to be like this for a while.

[/ QUOTE ]I thought that was called "renegotiating the standard contract" since the contract was well overdue and DAL had to up something to prevent an uproar. It's not like DAL willingly gave those raises after making all that profit..it's not like they came back to the pilots and said "hey, we've been doing good.. i think we should give back to our employees for helping us out".. they didn't do that (altho they did give themselves some heafty bonus's huh?), those raises etc didn't happen until it was time to renew the contract (and even that contract was years overdue - remember, they even had to bring in a mediator because mgmt wouldn't budge on many of the issues, esp work rule/scope issues). all of the changes in the 2001 was like pulling teeth out of mgmts mouth. they didn't want to upgrade the work rules/scope.. they didn't want a "no furlough clause" and they sure as heck didn't want to give raises...the pilots were willing to take some of the work rule changes that mgmt offered too.

plus, maybe i should point out that the past 3 years have been "we want our money back, we want $800mil"... for the past 3 years, the pilots have been fighting this very thing, the pilots offered to give $750mil 6 months to a year ago but by that time, mgmt changed their tune from $800Mil to $1Billion - so the measly $750Mil was no longer good enuff (huh?)... DAL, at the time, only wanted the concessions to guarantee a lower standard of all pilots throughout the majors - to US Air, AA and United pilot pay rate (DAL was considered the last of the legacy carriers paying out at industry standard)... now, US Air was already in trouble.. I'm thinking if not for 9/11, AA and United wouldn't have been in trouble.. DAL was doing ok at the time (altho they weren't great pre 9/11) and just wanted to lower the standard and get rid of the pension/retirement payments and to match all the other airlines so when they bring on new talent, they save a ton of $$ (ie: the bottom line)... that's all it was about. now, it's about bankrupcy because of mis-managed funds and high fuel costs (IMO). it just wouldn't surprise me if an article came out claiming that yes, DAL mis-managed money to make it look so bad that the pilots had no choice but to come down. but that's just my opinion. to me, it's not so much about the money anymore, it's about the work rules.. what new work rules is DAL going to impose? longer duty hours, less layover time thereby creating longer periods away from home & family as well as increasing fatigue (ya think?) - we know the pension will be frozen which is sad for the folks close to retiring (people work damn hard for their retirement and this is how they're thanked?). but anyways, i digress.. everyone has their own opinion as to what's going on and why...

Jetblue's loss is due to fuel costs.. it seems that everyone's loss is due to the cost of fuel now a days.. if they just raised their prices and told the customers that the increased price is due to fuel (notice how nobody's bitching about SWA's new price structure?), maybe they wouldn't be in this world of hurt. I dunno.. i'm not business mgmt but it sounds fairly common sense.
 
[ QUOTE ]
Just wanted to address one thing I keep reading everywhere from airline management to people on this board, that people will always go where they get the lowest fare. That is COMPLETE bunk! If that were true we'd all be driving Kia's, Yugo's, Chevettes, and Escorts!

The only time people shop solely based on price is when they consider a product homogeneous, like milk. I battle this everyday in the insurance business. Many people view insurance as a product that is the same with every company, price being the only difference, BAH! There are huge differences between contracts that can mean thousands of dollars difference at claim time, even on personal lines policies. The problem is people don't realize the difference. Once you show them what's different about a policy, they're willing to pay more if they consider the difference worth the extra cost.

[/ QUOTE ]

I think you are making the case against your argument. Between carriers most people do consider the product homogeneous. There is not nearly the difference between airlines as there is between insurance policies. And that determination is made by people who fly and know the products, not by what they see on TV.

The airlines have spent millions, if not billions, in marketing trying to differentiate themselves based on service. I would say it is the primary focus of most marketing. Yet they consistently find that there is tremendous price elasticity with differences of just 10 or 20 bucks driving passenger choices. The only thing that has mitigated that over the years has been frequent flier programs, but even those only effect consumer choice slightly. One of the big factors has been schedule, or frequencies. That has lead carriers to compete on frequency and is directly responsible for the explosive growth of RJ service.

Airline seats should be looked at as a perishable commodity. Your insurance policies have a shelf life. Airline seats don't. They are tremendously subject to supply and demand.

The dream is that slick marketing and premium service is the solution. Instead the truth is that supply has to diminish relative to demand and that carriers have to have competitive costs. When they do things will move back into the black, but it has to be remembered that the industry has no history of long term profitablity, even during the supposed golden years of regulation. The industry will always operate with razor thin margins because if profits occur to any extent supply will be brought into the market.

This shakeout has been inevitable since deregulation. There are plenty of Eastern and Frontier and TWA and Pan Am and Braniff (and CAL for that matter) employees that would say: "welcome to the real world". The only reason it hasn't happened sooner is the unusually long and sustained business up cycle that occured through the 80s and 90s.
 
[ QUOTE ]
Few airlines are making money (even JetBlue is talking loss in the 4th qtr) and it's probably going to be like this for a while.

[/ QUOTE ]

One airline is. Southwest. And guess what they don't do to their employees?

They don't shaft them. They have good employee relations.

When are the geniuses in the boardroom going to realize that one of the elements of a successful company is good employee relations? How many billions of dollars in bonuses is it going to take to get them to realize that?

As for the reward for the profits of the 90s, give me a break with the industry leading pay comment. That was a negotiated contract and if it wasn't something that was affordable, it shouldn't have been inked.

Typical corporate America BS. The execs screw up, and the employees get shafted.

Workers of the world unite! You've got nothing to lose but your job that's going to be offshored to Bangalore anyway.

And Heath, the problem with airline service is that people DO view that as a commodity. The thing that the legacy carriers have that the LCCs do not is their route system. You've got to promote that. I can't hope on Southwest or JetBlue and fly from IAD to NRT or SFO to SYD or ORD to HNL. I can on a legacy carrier.
 
[ QUOTE ]
The most suspicious part of this situation is the 5 year waiting period.

However, if oil drops, and stays, the airlines will return to profitability.

[/ QUOTE ]

This is another example of finding wrong reasons. The reason that some airlines are in trouble is that there is a hugely competitive market out there with supply exceeding demand and forcing prices below the costs of some carriers. If fuel went to $5 a gallon it would help in the short term but more supply would flood in and high cost carriers would again be screwed.

The truth is that even at $55 a barrel oil (and it will likely go higher long term) labor at most carriers is still the highest cost. As the head of ALPA has said, there is no solution to long term airline health that doesn't involve consolidation of airlines, reduction of the number of hubs, and competitive cost levels. This is why ALPA has conceded that the old style pension programs are not viable going forward.
 
[ QUOTE ]
Ugh!. This is really depressing stuff. I'm in shock to see these things happening in our once great Country.
We lost all manufacturing, we only make movies, music and porn. We will soon be a nation of prostitutes like Thailand.
This blows.
banghead.gif


[/ QUOTE ]

We have not lost all manufactoring abilities in this country, what the hell kind of talk radio stations are you listening to? We will not be a nation of prostitutes anytime soon, besides, I do not go down....

This is still a great country with plenty of chances for everybody to find employment, even in aviation....
 
[ QUOTE ]
The thing that the legacy carriers have that the LCCs do not is their route system. You've got to promote that. I can't hope on Southwest or JetBlue and fly from IAD to NRT or SFO to SYD or ORD to HNL. I can on a legacy carrier.

[/ QUOTE ]

Good point. The problem has been that every hub carrier serves virtually every market pair through their hubs. I just had to buy tickets ATL-DEN. I got fare offers from virtually every domestic carrier in existence.

That's been the overlooked factor. Even in markets where there are no LCCs the legacies are ripping each others throats out competing to fill seats.

And they do promote it. How can you avoid it? Just pull up a city pair and they are all there.

This is why even the ALPA leadership concedes there has to be fewer legacy carriers and about half as many hubs.
 
[ QUOTE ]
As for the reward for the profits of the 90s, give me a break with the industry leading pay comment. That was a negotiated contract and if it wasn't something that was affordable, it shouldn't have been inked.

[/ QUOTE ]

Agree it shouldn't have been. Delta management was clearly unable to deal with the pilots. For what it 's worth, when that deal was signed (before 9/11) I told my family it was the last good contract and probably wouldn't last to expiration before concessions were given. The health of the industry was clearly bad at that point. 9/11 and oil prices were just some of the final nails.
 
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