Cost Item

[mrplanes]

So far this year US Airways has spent an average of 83 cents per gallon on fuel.

So far this year Southwest has spen an average of 71 cents per gallon on fuel.

For next year US Airways had hedged 30% of its fuel purchases.

For next year Southwest has hedged 90% of its fuel purchases.

This information is factual and documented by the US Airways ALPA MEC.

I'm pretty sure that paying and hedging for fuel, the second largest cost item for this company, is a management function. How is it that our management does not have the foresight or leverage to pay the same or less for fuel than Southwest? I will reiterate once again: The cost problems are management problems. Not the employees. Our management is inept. This is yet another example of that characteristic. How much money are they pissing away on fuel? Multiply 12 cents times the gallons used this year and you will have the answer. That answer is the difference between profit and loss WITHOUT any productivity improvements. Could this be why other "legacy" carriers are profitable and we are not? Seigel must go.

mr

 

[pitguy]

Saving money like that requires leadership.


Dave the New Lorenzo must go away now.

 

[insp89]

mrplanes, Thanks for the info..Refreshing to hear facts every now and then instead of the usual "doom and gloom " drivel that Siegle and company always pump out.

 

[repeet]

mrplanes Posted on Dec 13 2003, 07:29 AM

I'm pretty sure that paying and hedging for fuel, the second largest cost item for this company, is a management function. How is it that our management does not have the foresight or leverage to pay the same or less for fuel than Southwest? I will reiterate once again: The cost problems are management problems. Not the employees. Our management is inept. This is yet another example of that characteristic.

Thank-you mrplanes.

I get the impression that the employee's diatribes on this board are viewed as class warefare rhetoric. I know several cleaners, stock clerks, and mechanics with BAs. A couple of them with two or more.

Despite Mr. Glass's delusions, most of us are Republican, conservatives, and to the bane of the Unions legislative intentions, NRA members.

Capital expenditures, provisioning, and positioning are indeed management responsibilities. We on the frontline have seen such a vacuum in this area, for so long, that resignation to this incompetence is deeply ingrained into the corporate culture.

Yet this present administration has set a new low in negligence. This time, even with the sacrificial dedication of the employees to do the impossible with nothing, this company may not survive.

And yes, we the fifty thousand plus, current and past employees will hold the greedy and incompetant, past and current administrations responsible for the murder of our careers.

We also vote and lobby.

And in case management has forgotten:

 

[PITbull]

Repeet,

Well said!

 

[CLTBWIDAYSYR]

Despite Mr. Glass's delusions, most of us are Republican, conservatives, and to the bane of the Unions legislative intentions, NRA members.

And just so everyone here is aware, there are some of us here who have always voted Democrat and Labor, are not socially conservative or members of the NRA, and know just what Republican leadership has gotten we heavily unionized aviation types: NOTHING. To know an airport was named for Ronald Reagan after what he did to PATCO is an abomination.

 

[carl71]

the post is a good one...and i couldnt have said it better...maybe management shouldnt take their head out of the sand where it has been buried for the longest time, and take a good look around..You can only get so much water from a sponge and it runs dry. :blink:

 

[FWAAA]

So far this year US Airways has spent an average of 83 cents per gallon on fuel.

So far this year Southwest has spen an average of 71 cents per gallon on fuel.

For next year US Airways had hedged 30% of its fuel purchases.

For next year Southwest has hedged 90% of its fuel purchases.

This information is factual and documented by the US Airways ALPA MEC.

I'm pretty sure that paying and hedging for fuel, the second largest cost item for this company, is a management function. How is it that our management does not have the foresight or leverage to pay the same or less for fuel than Southwest? I will reiterate once again: The cost problems are management problems. Not the employees. Our management is inept. This is yet another example of that characteristic. How much money are they pissing away on fuel? Multiply 12 cents times the gallons used this year and you will have the answer. That answer is the difference between profit and loss WITHOUT any productivity improvements. Could this be why other "legacy" carriers are profitable and we are not? Seigel must go.

mr

The biggest reason USAir did not hedge their fuel purchases to the extent of most other airlines is their Ch 11 bankruptcy. Having spent 2002 and the first quarter of 2003 in Ch 11, there were real limits on the amount of hedging transactions available to management. UAL is currently in the same mess.

A long-winded explanation of the reasons for this failure will appear in the 2003 10-Ks of both USAir and UAL. To some extent, AMR was uncovered early this year on its fuel purchases (compared to WN) because of its precarious financial situation. Vendors required AA to pre-pay over $500 million for expenses (like fuel) that AA usually obtains on credit.

I'm no USAir management apologist. It is a very poorly run airline with very poor managers. But this failure was out of their hands once the company declared bankruptcy.

See why AMR management really wanted to avoid filing Ch 11 earlier this year? Bankruptcy does impose costs on businesses apart from just the lawyers' and accountants' fees. Borrowing becomes more expensive and cost-saving tools (like fuel hedging) are simply unavailable.

 

[tadjr]

How much are we hedged for 2004 then?

 

[jack mama]

US has not heged fuel for years...this is not a Siegel thing...now why he hasn't changed this philosphy i don't know. but from what i remember from the past in the wolf days we hedged 0 %, so 30% is an improvement.

 

[tadjr]

US has not heged fuel for years...this is not a Siegel thing...now why he hasn't changed this philosphy i don't know. but from what i remember from the past in the wolf days we hedged 0 %, so 30% is an improvement.

Granted it IS an improvement, but doesnt anybody see WHY the employees are so upset? Here is SOMETHING that could be saving us money and its not being taken advantage of . If the company were doing all of these little things to save money right off the bat, I might be willing to see what else they had to talk to us about, but to constantly complain that its the salaries that are hurting us, and leave something as big as this UNTOUCHED? That I believe is why everyone is so adamant about no more givebacks. Do something with "everything else thats on the table" and then we can maybe talk. Until the company has looked at EVERY other way to save money or increase revenue, no thanks.

 

[Justaramper]

Being that oil is around $33/barrel, why would you hedge at this high price... Wait for it to come down...

 

[insp89]

tadjr, Good post !

 

[jack mama]

tadjr,
we have no way of knowing if 30% is the max they can hedge or not, given our finanical position...why do you assume they aren't already doing the best they can.

 

[TVLOOPS]

A question about hedging fuel. I understand about what happens when fuel cost rise. What I would like to know is when the price of fuel drops below the hedged price.

Example: Say UAIR hedged 30% of their fuel at $33. The price drops to $25. Does UAIR now still pay $33 for 30% and $25 for 70%?