Gordo Bloviator Buffoon - It's The Government's Fault CO Lost Money

Aug 20, 2002
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Valhalla
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Winning is defined as outperforming your competition and we clearly have, Bethune said. If we had comparable losses to those who announced quarterly results earlier this week and adjusted for our size, we would be announcing a pre-tax loss of $200-$340 million.

Doesn't this sound like Gordo knows the exact number of skeletons he had to hide somewhere in the accounting department?
 

exjetgurl

Member
Aug 31, 2002
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[P]Gee whiz Gordo! He''s on a roll. Read the latest in Air Transport World:[/P]
[P] [/P]
[P][STRONG][FONT face=Arial color=#990000]Continental''s chairman blames the government for the company''s losses[/FONT][/STRONG] [BR][FONT face=Arial,Helvetica,Geneva,Swiss,SunSans-Regular color=black size=2]In announcing the airline''s quarterly net loss of $37 million, Gordon Bethune said the company would have been profitable had it not been for added security costs, lost revenue and increased taxes imposed by the government. [A href=http://rdr.sbml.cc/Click?q=d3-GZOkQJP56BgYh6GK7ipM2DAm target=_blank]Air Transport World[/A][FONT face=Arial,Helvetica,Geneva,Swiss,SunSans-Regular color=#666666 size=2 xmlns:url=http://www.jclark.com/xt/java/java.net.URLEncoder] (10/18)[/FONT][/FONT][/P]
[P][A href=http://www.atwonline.com/indexfull.cfm?newsid=2394]http://www.atwonline.com/indexfull.cfm?newsid=2394[/A][/P]
[P] [/P]
[P] [/P]
 
Aug 19, 2002
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The JFK
www.usaviation.com
[P][FONT size=3]Joe Brancatelli had an interesting piece on Super Gordon back in August.[/FONT][/P]
[P][A href=http://www.zyworld.com/brancatelli/branc082202.htm]http://www.zyworld.com/brancatelli/branc082202.htm[/A][/P]
[P][FONT size=3][/FONT] [/P]
[P][FONT size=3]It's funny how he is hailed as a Genius for beating First Call estimates when he knows exactly how much the loss is going to be and Always overstates the projection so he looks like a genius when the actual loss comes in below that.[/FONT][/P]
 

N513AU

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Aug 20, 2002
219
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[blockquote]
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On 10/18/2002 2:34:44 PM exjetgurl wrote:


Gee whiz Gordo! He's on a roll. Read the latest in Air Transport World:[/P]


[/P]


[STRONG][FONT face=Arial color=#990000]Continental's chairman blames the government for the company's losses[/FONT][/STRONG]
[FONT face=Arial,Helvetica,Geneva,Swiss,SunSans-Regular color=black size=2]In announcing the airline's quarterly net loss of $37 million, Gordon Bethune said the company would have been profitable had it not been for added security costs, lost revenue and increased taxes imposed by the government. [A href="http://rdr.sbml.cc/Click?q=d3-GZOkQJP56BgYh6GK7ipM2DAm" target=_blank]Air Transport World[/A][FONT face=Arial,Helvetica,Geneva,Swiss,SunSans-Regular color=#666666 size=2 xmlns:url="http://www.jclark.com/xt/java/java.net.URLEncoder"] (10/18)[/FONT][/FONT][/P]


[A href="http://www.atwonline.com/indexfull.cfm?newsid=2394"]http://www.atwonline.com/indexfull.cfm?newsid=2394[/A][/P]


[/P]


[/P]
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[/blockquote]

Well, in a sense, he's right. More than the terrorists, more than the Iraqis, the reason for our mess is deregulation. Instead of a stable industry, that focuses on service and safety, we are interested in shipping cattle around with little regard for their comfort or safety. Cheapest is best.

True, our immediate problems were caused by scum like Wolf and Gangwal, but the horrible losses are being incurred because we can't charge people reasonable prices for tickets. They think they can fly to LAX for less than it takes to drive. Your car doesn't fly at 9/10th of the speed of sound, nor does it cost millions of dollars. It doesn't require years of training to fix it or fly it. Nor does it serve you even peanuts and coke. But, the public has got horny over the $39 round trip Southwest specials, forgetting that the reason why there are $39 specials are because a businessman is being charged $1800 for the same flight. Now the businessman thinks he should pay $39 too and THE MATH DOESN'T ADD UP.

So, in the end, thank Jimmy Carter. Maybe his Habitat for Humanity friends can build some homes for those of us who are homeless and jobless because of his silly little idea.
 

sfb

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Aug 21, 2002
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Huh? Why is the public responsible for purchasing discounted airfares which the airlines are willing to sell? For that matter, where is the government at fault there. If the airlines can't find enough passengers to fill their airliners at fares which the traveling public is willing to pay, then it's their own %&$* fault. They need to either reduce their capacity to increase their average yields or get their costs down. No one forced the network carriers to add capacity willy-nilly and agree to industry-leading contracts.

It's not Southwest's fault, either. They run an efficient operation and generally MAKE MONEY on those cheap discount fares. It's the choice of the major network carriers to try to match those fares or simply keep their fares slightly higher and entice passengers with a product of greater value. And Southwest doesn't charge $1800 to make up for their discounted seats, either.

Gordon *is* right about the effect of increased government taxes (like the September 11 Security Fee) -- tacking $5-10 on an average fare of $200 or so absolutely does reduce demand. Folks are willing to pay up to a certain total amount to travel by air; it doesn't matter to the passenger who gets what. The security fee (not to mention other costs borne by the airlines) absolutely hurts EVERY airline's revenues.

Herb Kelleher wrote a piece on the SWA website about how the government is failing in this regard -- for example, by not implementing tort reform to protect the airlines from third-party liability in case of terrorist attacks. Consider this -- is US Airways or Continental (or any other airline) truly responsible for damage on the ground if a TSA screener fails to detect a weapon, and a terrorist (or group thereof) manages to hijack a jet and crash it into a shopping mall? But the lawyers always go after the deep pockets. Consider that American and United were VICTIMS of the 9/11 attacks, and yet they might have been placed in the position of compensating thousands of other victims -- does that make sense?

As for spinning projected earnings -- if you have a good handle on where your earnings are going to be, it certainly makes sense to pre-announce such that you'll come in on the high side -- you might have to take your medicine when you give the earnings guidance, but you'll be rewarded down the line. That's just effective spin-doctoring. If you don't do that, you're a dolt.
 

Bob Owens

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Sep 9, 2002
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I doubt that the 5 to 10 dollar difference really changes demand. Lets see I want to go to Aruba on vacation, What! 210 dollars no way, 200 is the most I'll pay. Thats it, I'm not going! How likely is that? Demand is down because people are spending less on most discretionary spending. The airlines need to charge a price that covers the cost. If they cant do it then start cancelling the service and park more airplanes. When cities start to lose service maybe they will reduce landing fees and leases. When hotels, resturants and tourist attractions sit empty maybe they will pressure local lawmakers to make servicing their community more appealing.
 

geo1004

Senior
Aug 22, 2002
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The fact that now someone is trying to blame Jimmy Carter for the mess US Airways is in today made me split my sides with laughter!


Accept the fact: The pricing model for all of the major carriers is BROKEN and does not fit today's marketplace. The failure of any major airline to recognize and react to this problem is, in fact, the problem.

Jimmy Carter... ha, ha, ha!!!
9.gif']
 

TomBascom

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Aug 20, 2002
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[blockquote]... because a businessman is being charged $1800 for the same flight. Now the businessman thinks he should pay $39 too and THE MATH DOESN'T ADD UP.[/blockquote]

Gee, I guess the businessmen were paying attention in math class after all.
 

Busdrvr

Veteran
Aug 20, 2002
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[blockquote]
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On 10/21/2002 8:50:40 PM Bob Owens wrote:

I doubt that the 5 to 10 dollar difference really changes demand. Lets see I want to go to Aruba on vacation, What! 210 dollars no way, 200 is the most I'll pay. Thats it, I'm not going! How likely is that?
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[/blockquote]

Bob, maybe you go on vacation alone, but SOME people take thier families. Taxes account for about $50 on a $200 ticket. Multiply that by four or five for a family going to the Magic Kingdom. At what price point do they drive? Demand is elastic. will five bucks make or break the plans for everybody? NO, but it actually does for some folks, and in this low magin business a few less pax makes a HUGE differance.
 

Busdrvr

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Aug 20, 2002
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[blockquote]
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On 10/21/2002 8:36:01 PM sfb wrote:

Huh? Why is the public responsible for purchasing discounted airfares which the airlines are willing to sell? For that matter, where is the government at fault there. If the airlines can't find enough passengers to fill their airliners at fares which the traveling public is willing to pay, then it's their own %&$* fault. They need to either reduce their capacity to increase their average yields or get their costs down. No one forced the network carriers to add capacity willy-nilly and agree to "industry-leading" contracts.

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[/blockquote]

This downturn has been like no other due to the fear factor Even during the Gulf War, break even load factors never approach 75%, much less the nearly 90% levels of today. As for capacity increases, it was just a couple a years ago people were complaining about the fares they had to pay on redeye flights because the capacity was too low. The problem with reducing capacity now is that it has to be industry wide or the cheaters benefit. A 20% reduction in capacity may reduce cost by 10%, so a slimy little low fare airline can keeps it's capacity up or even increase it's capacity and enjoy an even larger cost advantage. that's why most successful airlines have gotten that way by growing as agressively as possible.
 
C

chipmunn

Guest
Bob:

A $1 difference in the ticket fare between airlines can make an enormous difference becuase of CRS airline priorities.

Chip
 

TomBascom

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Aug 20, 2002
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Grow up guys. There's nothing slimy about low cost carriers. They have a business model that works. The majors don't.

All of the name calling and propoganda perpetuates the misunderstandings about why the things that they do work. You need to take a good hard look at what their product really is vs what you imagine yours must be to match their prices. If you understood why people like these guys (and even pay more to fly them) and so dislike you you'd have the key to turning it around.
 

RES4LUV

Member
Aug 20, 2002
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[blockquote]
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On 10/22/2002 8:50:33 AM TomBascom wrote:

Grow up guys. There's nothing "slimy" about low cost carriers. They have a business model that works. The "majors" don't.

All of the name calling and propoganda perpetuates the misunderstandings about why the things that they do work. You need to take a good hard look at what their product really is vs what you imagine yours must be to match their prices. If you understood why people like these guys (and even pay more to fly them) and so dislike you you'd have the key to turning it around.
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[/blockquote]

Thanks Tom, I wonder how many res agents hear I love you guys several times a day at the NON-cheating,UN-slimy MAJOR AIRLINES?

Bus-According to you we should change our business plan so we can lose money too. Are you serious?
 

KCFlyer

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Aug 20, 2002
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[BLOCKQUOTE] [/BLOCKQUOTE]
[P]Hmmm- deregulation has been in place for 24 years and airlines haven't figured out how to handle it yet? Here's a pretty good article about someone who tried to shift things for the better about 10 years ago. Imagine what the industry might be like today had this concept lasted. [/P]
[P][A href=http://www.zyworld.com/brancatelli/branc050902.htm]http://www.zyworld.com/brancatelli/branc050902.htm[/A][/P]
[P]As far as deregulation being the cause of the problem...how many of you would have an airline job if the industry was still regulated? There's been a lot of low fare carriers who have come and gone, only a few stayed. During that time, the other guys grew pretty rapidly themselves. [/P]
 

PHL

Veteran
Aug 20, 2002
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Well, what were all the airlines doing with those billions of dollars they profited in the late 90's? There really should have been a concerted effort after the Pan-Am/Lockerbie bombing to really beef up our airports' security. That was 12 years before 9/11/01. It should have been a wake up call, because the European airports certainly did not sit idle and hire barely high-school educated people and pay bottom dollar wages for the Argenbrights of the aviation world to be our last line of defense before boarding a plane.

Now, I'm not suggesting that simply paying screeners more would have prevented 9/11, but there has always clearly been a certain level of apathy towards domestic air travel security. There really needed to be a concerted effort starting in the 90's - especially with the Gulf War. But, in favor of profits and growing themselves, the airlines paid the LEAST attention to securing the skies they fly.

Gordon can look in the mirror, along with all the other airline CEOs of the profitable 90's, if he wants to point the finger at 'what went wrong'.
 

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