Virgin America Cometh

[SpongeBob]

From Alaska's intranet Q&A site:

Q. I see in the news that Virgin America has obtained the funding needed to file an application with the FAA. What is Alaska's reaction going to be to prevent the carrier from taking our market share?

A. Clearly, more low-cost seats chasing customers is not a good thing for an industry already struggling with excess capacity, low fares and high fuel costs. The arrival of Virgin America into the domestic market will likely be met with vigorous price competition and a spat of frequent flier promotions. Should we find ourselves under attack from Virgin America, Alaska Airlines will be ready. Our growth plan for 2006 has 12 new 737-800s arriving, with four aircraft retiring. The new planes will be used to build frequency in existing markets, connect markets without nonstop service and add a new destination or two. The aircraft will also allow us to defend our markets. And our Mileage Plan program is a great weapon to keep loyal customers flying Alaska. Finally, a continued focus on cost reduction will ensure we remain a tough and much-feared competitor. (Dec. 14, 2005)

 

[NewHampshire Black Bears]

From Alaska's intranet Q&A site:

Q. I see in the news that Virgin America has obtained the funding needed to file an application with the FAA. What is Alaska's reaction going to be to prevent the carrier from taking our market share?

A. Clearly, more low-cost seats chasing customers is not a good thing for an industry already struggling with excess capacity, low fares and high fuel costs. The arrival of Virgin America into the domestic market will likely be met with vigorous price competition and a spat of frequent flier promotions. Should we find ourselves under attack from Virgin America, Alaska Airlines will be ready. Our growth plan for 2006 has 12 new 737-800s arriving, with four aircraft retiring. The new planes will be used to build frequency in existing markets, connect markets without nonstop service and add a new destination or two. The aircraft will also allow us to defend our markets. And our Mileage Plan program is a great weapon to keep loyal customers flying Alaska. Finally, a continued focus on cost reduction will ensure we remain a tough and much-feared competitor. (Dec. 14, 2005)

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Sponge,
You left out the part that AS is "in the rack" BIG TIME with AA. (Code sharing)

(Then again, that may even infuriate Branson further. Branson HATES AA!!)

Oh well, He"ll just have to get over it !!!!

NH/BB's

 

[Guest]

"Finally, a continued focus on cost reduction will ensure we remain a tough and much-feared competitor."
More paycuts are coming!

 

[SpongeBob]

"Finally, a continued focus on cost reduction will ensure we remain a tough and much-feared competitor."
More paycuts are coming!

Doubtful.

Now that ALPA is out of the binding arbitration provision for Contract '07 and considering the way things came down from Arbitration Richard Kasher in May '05, better known as the 'Kasher Crasher', the pilot group is in NO mood for paycuts short of the courthouse steps. In my opinion, an unlikely scenario.

AMFA just signed a long term deal (~5 years) and look for AFA to have a ~5 year deal sometime in the next year, more likely within about six months perhaps less. Neither of these contracts contain/will contain pay cuts.

I expect the ALPA negotiations in May '07 to focus on productivity and retirement. The salient points will be how much $$$ in pay rates is Alaska Airlines willing to put on the table to "buy" prefential bidding and what percentage contribution to the 401K is necessary for the pilots to agree to freeze the best funded A Plan (~90+%) in the passenger industry. I have heard that FedEx has the best funded A plan among all airlines, not sure about UPS but likely up there pretty close.

-Sponge

 

[Guest]

what percentage contribution to the 401K is necessary for the pilots to agree to freeze the best funded A Plan (~90+%)

I would not agree to anything less than about 15%.
I have heard (correct me if I'm wrong)that it is in the best interest of management to keep the pension funded because their pension is in the same pot as the pilots.