JDean3204
Well-Known Member
Yeah I knew that, but it was just a pretty great comment. I should have used the sarcasm tag....??
When you make the news...
- Thread starter SurferLucas
- Start date
Yeah I knew that, but it was just a pretty great comment. I should have used the sarcasm tag....??
denverpilot
Well-Known Member
Or ... Operating Income still isn't what you want it to be. Because it's not a net number.
Profit margin... gross or net?
Can they lower margin and not lose investors? What's the expected churn rate?
Like I said, zero effs given what they pay, and the article is still far stupider than even this conversation.
I never said they weren't successful.
But if anything, the numbers you guys are sharing prove that cancelling flights is working out pretty well for them.
Sounds profitable. Think they'll make a 24% profit this year?
Soku39
Well-Known Member
pete2800
'Member?
They made a good margin last year while operating most of their flights, so that means cancelling flights in large quantities this year "is working out pretty well"? That's an interesting variation on the post-hoc fallacy you have going there.
What's the churn rate if they cut into their profit margin? I don't know. What's the expected rate of loss of investors when people start to see operational dysfunction on a large scale? What's the impact on their customer service awards they value so highly?
Is it really your position that the highest margin airline in the nation shouldn't be concerned about short-staffing themselves so badly that they cancel a large percentage of their schedule? It's the schedule that makes them that margin...
No, I don't expect them to make 24% this year. Too many self-induced wounds. Too many things have happened that were "stupider" than last year.
Roger Roger
Bottom of the list
Sad to read as for a long time Horizon was one of the good regionals.
JDean3204
Well-Known Member
I'm only in training so I've yet to hit the line, but so far I'm impressed. They train us very well in the Q400, they actually want us to know what we're talking about and are happy to help us out and most guys have been here for years. I'm sure the feeling on the line is rough right now, but I am happy to be here especially since they have a commuter clause lol
But I may be crazy because I was happy at SeaPort, an airline that pretty much all pilots "hated".
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denverpilot
Well-Known Member
I'm not arguing any of it. Again, zero effs given. It's their business to run. I just found the little whiny article entertaining, is all.
You're posting numbers and saying they're really good at making a consistent profit margin, so my assumption is that they know how to make a consistent profit margin.
You're also touting that they're maybe even the best at it, compared to other airlines, or at least way up there, so if they have an off year, they'll what?
Fall down to match their lesser competitors? Uh oh.
Darn, it sucks to be tied for first. 24% margins are kinda the low end in my business sector, so ...
Tell the story however you like it. It's your story. Either you like their numbers or you don't.
How much revenue do you suppose the 300 cancelled flights has cost them down at the regional? Is it even going to move the needle on the overall firm? Which competitor will swoop in and carry those passengers? Anybody even ready to handle it in their operating area where they're canceling them?
pete2800
'Member?
They have, yes. Which makes it all the more frustrating when errors in staffing factors destroy operational effectiveness. When you're an airline and you can't move airplanes, there's a problem.
Yes. But when one of the largest airlines in the world has consistently ramped up capacity in your main hub over the last couple of years, mis-steps can be costly.You're also touting that they're maybe even the best at it, compared to other airlines, or at least way up there, so if they have an off year, they'll what?
Fall down to match their lesser competitors? Uh oh.
That may be. But in airline world, 24% is well outside of normal. It's not even close to normal. Historically, if an airline could make ANY money they were doing well, and if they could sustain even a 5% margin they were over-achieving. Years ago, the management mantra here was "If we can make it to 10%, we'll have arrived." Everyone laughed and laughed...
No... You don't get to act like this is all a subjective thing that's just up to my interpretation now.
I'm comparing real numbers. Whether I "like" them or not couldn't matter less. I'm comparing the numbers to those of the competition. The competition has chosen to manage in such a way that they're not suffering from a huge shortage of labor. The competition still has plenty of investors, and seems to be performing just fine on wall street.
Meanwhile, over here we've decided that not flying planes is a more effective way to run an airline than flying planes.
300 cancelled flights? Try about 60 per day, all summer long. This is not a large company. That's a significant amount of flying. As I stated above, the major competitor has been building a robust network here for several years, and has a new aircraft type inbound for this location. The capacity is available, or will be available shortly.
First the excuse was a seemingly false differentiation between income and profit, then it was inflation, then it was a false equivalence between different situations and potential financial outcomes, now it's lack of competitor capacity. None of these things have anything to do with what's happening: Airline is unable to fly planes. Considering that's the only product that airlines deliver, I'm going to go ahead and assume that's a negative outcome.
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Hiboglossi
The Most Depressing Person
You know, that's something I wondered about when this article came out. It seems odd to me that AS/QX management would allow this at such a crucial time, when that large airline has been increasing their capacity rapidly over the last few years and now serves most of the same destinations from your main hub. I could be wrong, but it seems like cancelling this many flights could drive away customers to that competitor.
Didn't the 1985 pilot strike at United, which of course forced them to cancel most of their flights, allow American to gain a much stronger foothold and much greater market share at ORD than beforehand? I can't help but wonder if so many Alaska-branded cancellations will give Delta the same opportunity at SEA.
Yes, we are living in very peculiar times right now when virtually every airline in the nation is profitable. This is mostly thanks to the fact that oil is unusually cheap right now, and that we seem to be at an economic crest. But oil prices will revert to the mean eventually and it's been almost 8 years since the last recession, so we are just about due for another one. It seems to me that cancelling so many flights and unnecessarily inconveniencing so many passengers will significantly hamper the company's ability to weather hard times, which will probably be here again any day now.
Then again, most of Alaska's managers are probably significantly more intelligent than I am, and are paid very well to make the decisions they make, so they must make sense somehow.
denverpilot
Well-Known Member
I hadn't heard 60/day. That's pretty big.
But...
You assume they're errors. You also assume they think they have a shortage of labor.
The base assertion is that "an airline unable to fly planes" is bad. If those flights aren't profitable, not flying them actually helps the numbers. (And no, I have no idea if they're cancelling profitable or money-losing flights but if you or I had to cancel something and had a choice of what to cancel...)
Everyone has avoided answering the question of whether or not Horizon by itself is profitable without AAG. Or if the cancelled flights are profitable.
Those other things aren't excuses. They're questions that the author should have asked. Was he bumped off of a half full airplane?
And yes, your story is your story. They haven't told you (or me) why they're willing to cancel flights instead of adding staff. But if your number of 60/day is accurate, it sure looks it could be strategic, and not a mistake.
The assertion by the author of the story was that it's over what they pay, but I see no indications that they're short of applicants for the jobs when they are hiring. Have you? Everyone has avoided that topic, also. No shortage of applicants. No reports of partially full training classes when they run 'em.
Actually they could've paid the pilots more and shareholders would have made more. They tried to nickel and dime them, demanded concessions when there was a shortage of pilots willing to work for low pay, especially in expensive areas like Seattle and then had to cancel numerous flights going back to this Christmas season where they had to cancel as many as 10% of their flights on certain days due to pilot staffing issues. That had to cost them a ton in addition to this summer and I guarantee you much more than a 10% raise would've costed for their pilot group. I can go source it all for you, but the MBA idiots in charge went penny wise and pound foolish and costed the company a hell of a lot more. Too bad the idiots in management never got shown the door.
denverpilot
Well-Known Member
I've worked for places like that and am not arguing that may or may not be true, but nothing presented thus far has indicated that it's not profitable. So far, all the numbers presented, look like they are beating everyone else in the business.
I simply started by reading the article as a proper skeptic and making fun of it, and then folks keep quoting me and making up things they think might have happened or might happen, but none have proven any of it yet.
So I'll play Devil's Advocate. Why not? It's an interesting discussion but none of us have all the data they have. I chuckled at the "they're a public company so we all can read it"... no. Plenty of data they may have internally that applies, and isn't required to be disclosed. Specifically the profit-per-route/flight numbers.
Again, were the flights that were cancelled profitable ones, and how much profit was lost?
How big was the number compared to the overall size of the company? 1%? 10%?
"That had to cost them a ton" hasn't been proven yet. It's a nice story, and even plausible, but unproven.
Would they have been 10% more profitable if they flew those flights? Jump from 24% to 34%? Putting them so far above the rest of the industry domestically that it would be amazing?
Or would they have only jumped from 24% to 25% after including the full costs of adding staff? Or gone down?
I'm just responding because folks think I'm arguing that they're right or wrong. I'm not. I'm arguing that numbers are how businesses run things. They aren't cancelling flights in a vacuum.
Your predictions may even be right. Horizon may lose marginal money cancelling flights.
Their parent company may not care. It may cost enough to add staff or pay staff more, that the losses flight cancellations cost are cheaper.
No dog in he fight. Just pointing out that there's no numbers behind the sentiment and stories of doom that they should pay better or hire more.
Let us know how much more profitable you think they'd be if they'd have flown those flights, and why. I'm interested. But mostly because folks keep quoting me and dragging me back into the topic.
The article writer and folks who say they should hire or pay more, and not cancelling those flights, haven't proven their assertions. I'm fine with that, but I'm not convinced by stories of doom.
Those are a dime a dozen in the airline biz. I don't think a company with a 24% margin in that biz is going anywhere. All they have to do is point at that number and the number of their competitors, even if they really have made a mistake. They'll have more time than competitors inches from bankruptcy, to correct it.
They did absolutely make a mistake. If you think demanding a price cut or more for your money in a market with a decreasing supply of what you're trying to acquire is a good or smart thing to do then we can just end the conversation here. They had to rush back and pay their pilots more and in the mean time they lost a year of recruiting and some experienced pilots. I think the deal they made was bad and wasn't enough to retain their experienced pilots and a lot of their pilots will look to take the bonus and move on to another airline as Alaska couldn't be bothered to reward them with some sort of flow for their loyalty which further exacerbates their pilot situation as they'll have to train even more pilots for a dying aircraft in the Dash 8 and many of those need at least a year before they'd have the time to upgrade to captain. I had a co-worker who was set to go to Horizon, back when they started this dick waving with their pilot group to demand concessions. I believe they cancelled her class and this was in late 2015 so she ultimately went to Skywest. Their approach to staffing made no long-term business sense, just like PSA and the American regionals (Envoy and Piedmont) who they ended up having to throw money at their pilots after trying force Envoy to take concessions and shuffling some planes around as a result just 2 years or so prior.
I think it's poor business when you can make 24% percent profit on your revenue stream to not seek to maximize that with as many flights as possible. Many of their costs are fixed so I don't see why that 24% percent profit would have to diminish much if at all and would most likely increase with additional flying rather than parking planes. We're not talking about them going out of business, just a boneheaded decision by management that cost them a lot more than they saved. I've worked for more than my share of companies that went cheap and paid several times more in the long run in lost utilization and higher expenses over the long term and I don't see how you can even remotely rationalize their decision making if you've been following Horizon or the regional pilot market for the last two or three years.
SKYROCK
F RAN CO FILE B RAN IFF HI RAM AB IFF
gets it. mail them your feces instead of a resume. you guys and girls control this. its yours. supply and demand applies to labor and this is yet another example of corporate/union psychopathy and paying unnecessary people large quantities of money
when they deserve nothing. Pi RATES SOC RATES
You are the people spreading your legs and asking for more regional sodomy when, in fact, you ARE in control. Get rid of ALPA. Its fraud.
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denverpilot
Well-Known Member
Because there's no evidence they're having any trouble filling classes at all when they open hiring? Ever.
It's not a rationalization, it's observation. Nothing changes. Been that way since the 90s. Been watching for a lot longer than "two or three years".
Plenty of folks eating ramen working their way to the mins to apply there. And apply everywhere else.
When Horizon can't fill a class, let me know. I'll be amazed. I still won't have any dog in the fight, but I will be amazed.
Who knows? Maybe I'll have students flying for them by then, even.
I doubt AAG is going anywhere. That they even still have a wholly owned regional, is in and of itself, a throwback to the 90s. They're even flying dang near the same equipment other than much nicer avionics, as they were in the 90s.
I think my ride as a young field engineer into Pullman to install telecom equipment at the university in 1993 or 1994 was a Dash-8. If the flight had been cancelled back then, my boss nor my customer would have been surprised, and I'd have spent an extra night in Seattle, probably drinking coffee and buying an umbrella because I never traveled with one.
Just a tool kit with equipment worth more than the FO made in a year. Especially if I had to bring the digital test gear along. The rental car was worth more than what the FO made too. Hasn't changed. (Well, the test gear got cheaper. Thanks China...)
They've been doing the same thing up there since before I had gray hair. And making a profit doing it. Right or wrong, they've not played the bankruptcy car wash card in decades, which is more than most in this crazy biz can claim.
They've been ultra conservative on pay since clear back then. It seems to work for them. MarkAir didn't survive a fight with them. Maybe someone else will.
I last flew on them for work almost a quarter century ago, and the pilot complaints about them on modem dial-up message boards were the same back then.
You could cut and paste the messages here today, into a document side by side with ones back then, and they'd read the same.
Those "cheapskates" as they've always been called, seem to survive.