A Viable Approach To Concessions...

[ELP_WN_Psgr]

mweiss mentioned to me, in a different related thread, that one of the threads dealt whith "what employees ought to do" and he would be interested in seeing my take on it.

Well, much to my chagrin there are about a dozen threads dealing with the topic...so I am unable to find the one upon which he wanted me to post my sage advice.

Thus, I will start a new one. mweisee, this one's for you:

If I were the labor groups that still seem to have a reasonable amount of good judgment (this excludes the pilots) I would offer some concessions, to kick in ONLY after management had met certain non-negotiable demands:

1. A complete and total rationalization of the fare structure based upon mileage and ASM cost. If your ASM cost is 12 cents, there is no way in heck a 300 mile flight should cost close to 500 clams. The problem is your management or lack thereof has perpetually looked at the cost side of the equation rather than the revenue side. Rational fares mean more walkup traffic (rather than a plethora of cheap seats sold) means more revenue means greater demand means more flights means more employees means a growing airline means junior people can be brought back in to the workforce means average labor costs go down meaning less draconian wage concessions are necessary.

NOTE: "Go-fares" implemented in certain markets operated by an airline with ugly colored planes doesn't count. The idea is right, the location is wrong. Go ahead, bite the bullet, and do this systemwide, do it now, and do it right. You really have nothing to lose.

2. Relocation of corporate headquarters from Arlington VA to either Pittsburgh or Charlotte. Accompanying this will be a 10 or 15% reduction in the wages paid to all management personnel earning in excess of $60K per year, since the cost of living in either of those places is substantially less than in the DC metro area.

3. Implementation of a company-wide policy that dictates that all management personnel, whether on business or for pleasre, will travel in Y only. Only to transact company business will upper level management be permitted to travel positive space. For their pleasure travel, for their commuting convenience....it will be strictly space available.

4. Implementation of a company policy that limits hotel and meal per diem rates to the amounts authorized for federal government employees. Basically, that puts the big bosses in a La Quinta or Holiday Inn Express. And you know, there is nothing wrong with that. If they are TRULY serious about saving the company, they ought to be willing to make the sacrifice. There is nothing magical or special about those people that dictates they stay in a suite at the Radisson etc etc.

5. Consolidation into USAirways all the wholly owned carriers. This MAA/PSA/Piedomont/et al nonsense is confusing at best and ridiculous under any circumstances. It's ALL USAirways. One set of managers. One batch of res agents. Now that the whooly owned folks are all under the USAirways umbrella, no more giving routes and traffic and money away to Mesa. if it is worth operating and generates revenue, operate it yourselves. If it isn't, let it go.

6. Okay, now time for the concessions. To heck with America West contracts. After management has met these demands, it is time to give up some thing in return. And here is what USAirways folks ought to be willing to accept, since management has acted in good faith by doing the aforementioned things. The contracts you ought to be willing to live with are Southwest's contracts, with an adgustment to total seniority pegged at 65%. For example, if you are a USAirways FA with 20 yrs service, you should suck it up and take the Southwest Airlines contract for an employee with 13 years. A gate agent with 11 years ought to get what Southwest pays their 7 yr gate agents. Mechanics and pilots and everyobody else....likewise.

Now...will what I have suggested save the company? Beats my pair of jacks. I do know, however, that it would be a whole lot more equitable (and a lot more palatable) than what USAir320pilot keeps throwing out there. The bottom line is that if USAirways continues to treat employees as liabilities, they are going to continue to behave as liabilities. If they are included in a COMPANY WIDE plan of salvation, there is still a chance.

The kicker is...Management has to make the first move. Concessions do not start until not less than 30 days after management has done everything on their list. Like I said elsewhere...talk is cheap.

 

[RWerksman]

2. Relocation of corporate headquarters from Arlington VA to either Pittsburgh or Charlotte. Accompanying this will be a 10 or 15% reduction in the wages paid to all management personnel earning in excess of $60K per year, since the cost of living in either of those places is substantially less than in the DC metro area.

I think this might be one of the most outstanding posts I have ever read here. Thank you for making it.

I do have one question though. Do you think that the above quoted circumstance will happen? It makes sense for U to vacate CCY, and pay management less (and most likely less to lease office space) but I fear that there might be other things not taken into account -- such as existing lease agreements and relocation costs. If I were management, I am not sure that I would be willing to uproot myself and my family in addition to taking a substantial pay cut and possibly having to pay relocation costs.


On the flip side, if something like this does happen, and in my opinion, that would be huge step in regaining not only a better cost structure but possibly a better working relationship with most union goers.

 

[ktflyhome]

Actually, ELP WN: After 14 years of service, No flight attendant gets any hourly increase at all. Everyone is "topped" out.

 

[ELP_WN_Psgr]

Okay, so your topped out 14 yr flight attendant drops to 9.1 yrs of seniority and is no longer topped out.......

 

[ktflyhome]

ELP WN: I like what you have to say. Very thought provoking and makes a lot of sense.

I keep seeing comments made about moving CCY to another location. The thought going through my mind is WHY would they unless they plan on being around??

 

[wings396]

With all of the "Concession" Talk going on AGAIN, let's hope the company doesn't take any more from the 30K a year and less crowd. The Mainline Express wages are already lower than Comair, CO's Express Jet ($3.50 an hour) and the UA Express operators. There isn't an Airline out there paying $13 an hour to it's top scale employees. We have been hit hard enough already with a $7 an hour Concession.

 

[pitguy]

After this round 3 of concessions is over then what will they want for round 4?

 

[wench]

I'll reiterate my opinions, we give and keep on giving.


WHEN WILL THIS ALL END OF THE EMPLOYEES GIVING?

WHEN THE LAST ONE IS OUT THE DOOR>>>>

ENOUGH OF GIVING ALREADY>>

GEEZ< WHat ever happened to a cost of LIVING RAISE???????????

I TOOK A $7.00 per hr to stay in my city now I'm on the prowl..

 

[C54Capt]

WN,
In theory your ideas are at least something to think about for long term survival of US, but I'm not sure converting US to a LCC is the ultimate answer. The LCC business model is based on growth, not defending a niche and providing trademark service. It would be sad to see an airline such as U fade in to the crowd of airborne Greyhounds. Not that there is anything wrong with that (Seinfeld).

 

[Winglet]

The main sticking point is that Lakefield doesn't want just concessions from the mechanics . . . . . he wants to get rid of them almost altogether. I'm sure they'll do the "right" thing, though, and vote yes to massacre their ranks so that A320pilot can stuff his wallet with $130k a year.

 

[RWerksman]

WN,
In theory your ideas are at least something to think about for long term survival of US, but I'm not sure converting US to a LCC is the ultimate answer. The LCC business model is based on growth, not defending a niche and providing trademark service. It would be sad to see an airline such as U fade in to the crowd of airborne Greyhounds. Not that there is anything wrong with that (Seinfeld).

I agree with you about his ideas being something to think about for the future of U. How does this equate to changing U into a LCC?

 

[JS]

I agree with you about his ideas being something to think about for the future of U. How does this equate to changing U into a LCC?

ELP_WN suggested copying Southwest's fare structure. That means changing US Airways into a LCC.

You can't have a hub-and-spoke carrier with international service, service to small cities, and a decent frequent flier program (e.g., complimentary upgrades) with nothing but Southwest fares. It won't work unless the employees become volunteers.

You can match LCC fares (after all, it is post-1978), subject to availability, but it is not necessary to shoot yourself in the foot and sell every seat in every market for $99 or so.

By the way, ELP, the suggestion that management ride space available only in economy is ridiculous. It's SPACE AVAILABLE. That means it costs the same to sit in First or Coach -- nothing.

Sticking management with cheapie per diems and cheap hotels when they are on the road amounts to a drop in the bucket. US Airways needs substance, not fluff.

 

[ELP_WN_Psgr]

WN,
In theory your ideas are at least something to think about for long term survival of US, but I'm not sure converting US to a LCC is the ultimate answer. The LCC business model is based on growth, not defending a niche and providing trademark service. It would be sad to see an airline such as U fade in to the crowd of airborne Greyhounds. Not that there is anything wrong with that (Seinfeld).

C54:

This is where folks' thinking gets terribly muddle headed -

Folks all think there is some great divide between Southwest and the other so-called greyhound LCCs and their own precious legacy carrier.

The raw unvarnished truth is there is not a dime's worth of difference between them, except for maybe Southwest gives passengers more legroom, they don't block the aisle with the patented aisle blocking device (a drink cart), and you can usually get a second beverage. True, you get an assigned seat on

caveat: yes I know about MRTC and AA does offer a little bit more space.

This is all about survival and desperate times call for desperate measures.

Pterodactyls would probably still like to be flitting thru the warm skies out here by El Paso but evolution had other ideas.

Things are at the point of either evolve or perish. No place for sentamentalism or longing for the days of All-American Airways and bumping around Wisconsin in a Nord 262.

The future is now.

 

[ELP_WN_Psgr]

I will reply to JS' comments. I disagree with his remarks, for the most part. I do, however, totally respect his right to his opinions.

ELP_WN suggested copying Southwest's fare structure. That means changing US Airways into a LCC.

In truth, there is no LCC/non-LCC. They are all airlines. Either you transmogrify yourself into an airline that makes money or you perish. It's really that simple. That doesn't mean you have to become WN. It should tell you, however, that you would do well to emulate the things that make them money.

You can't have a hub-and-spoke carrier with international service, service to small cities, and a decent frequent flier program (e.g., complimentary upgrades) with nothing but Southwest fares. It won't work unless the employees become volunteers.

I don't believe that. However, I will agree wholeheartedly that you cannot be all things to all people. Rather than a network carrier, capable of hauling people from Zanesville, OH to Rutland, VT.....U might do very well to focus themselves on flying to and from places where there are adequate volumes of people to generate traffic at the prices the market will bear. See, that's where the real balancing act is. Going places where there are enough passengers to pay a price which, when multiplied by the number of pasengers, exceeds the cost of generating the passenger revenue.

You can match LCC fares (after all, it is post-1978), subject to availability, but it is not necessary to shoot yourself in the foot and sell every seat in every market for $99 or so.

This is where everyone got silly. In fact, I would be the first to suggest that USAirways ought not sell every seat for $99. WN sure as heck doesn't. If you read airliners.net....they are constantly derided for being deceptive in that CO, UA, AA (fill in name of favorite legacy carrier) has lower fares. Where WN makes their money is by selling a lot of walkup tickets at prices that don't cause passengers to come down with a case of the vapors (or worse). But $954 RT between Buffalo and Philadelphia is not going to cause passengers to say "to heck with the car, let's fly up there this weekend." That's the real deal - the walk up fare ought to be higher than your el cheapo fare. The walk up fare ought to be at a level that puts some money towards the bottom line. But setting sky high prices does nothing for you if it scares passengers away from the airplane and in to the automobile.

By the way, ELP, the suggestion that management ride space available only in economy is ridiculous. It's SPACE AVAILABLE. That means it costs the same to sit in First or Coach -- nothing.

My suggestion that you do that was not to generate revenue or to be punitive. However, if management is bumping a fare paying passenger out of any cabin it's a bad thing. No, my recommendation that you stick the bigwigs in Y is TO LET THEM KNOW WHAT GOES ON IN THE REAL WORLD. Far too often people get isolated in their own little world, and they forget what things are like where the little people live. And it is the little people that will make or break any service-oriented industry. There are not enough people out there willing to pay F fares and buy club memberships to keep your company afloat. If your company is to survive, it will survive based solely on the patronage of the regular folks in the main cabin.

Sticking management with cheapie per diems and cheap hotels when they are on the road amounts to a drop in the bucket. US Airways needs substance, not fluff.

There is no substitute for leaders setting the example, regardless of what business you are in. The amount saved is inconsequential....the fact that employees could see that their leaders (as opposed to managers) care enough about salvaging their ailing company to make a few personal sacrifices would speak volumes. Perhaps this is a genetic thing....... In places where the per diem cap is $99 for lodging I am quite content to sleep in a $60 room at LaQuinta......when I could get an intermediate car I opt for the ever-popular Dodge neon for $25 if it will do what I need it to. Whether its a drop in the bucket or not, money I don;t spend when i don't need to is money I will have to spend on something perhaps more worthwhile later.

Okay, I will let this set for a while and watch people debate/deride my commentary (not to mention character flaws). I do have to leave you with one cogent idea, one that for whatever reason airline management just cannot seem to get through their thick skulls: FEED THE RICH AND GROW POOR, FEED THE POOR AND GROW RICH.

 

[gogogadget]

What cracks me up is that you all think that you can just miraculously step into a time machine and turn back your age! These LCC's are kicking everyones butt because they do not have the top end pay and benefits of the larger more mature airlines!

To balance things out you need a picket full of cash, no retirement costs, and people that only make entry level salaries. How is that going to happen. Heck ALL of usairways employees have been steadily working at the company (in some way shape or form) longer than the ceo of JBLU's entire career. Think about it. In order to turn back the clock you would have to strip your employees down to at least a third of ranks and keep the same pay while working those remaining old geezers until the pacemaker quits!

Productivity, pay and working conditions like it was back in the good ole days. FA's would be Stu's again and pilots would be gods!

Gotta luv it!

Hope you can change and be YOURSELF and not someone else. That is what makes a good identity and what makes people remember! But who knows. This world of gotta have it now, silicone implants and plastic surgery USAirways may be the next candidate on SWAN!