Here we go again

[NewHampshire Black Bears]

Hmmm, did I say that?
I have said:
Don’t like what’s offered? Quit and walk away.
Don’t like where the industry is going? Change carriers.
If everybody walks, oh well.
BUT! Strike, when you know it will put 50,000 other employees out of work; employees who have decided for themselves that it is in THEIR best interest to try and stick it out, and you’re acting like a spoiled three-year-old throwing a tantrum because all of the lollypops are gone.
Want to act like a thug? Strike.

MB

===========================================================
MMB,

I think your post should read,

"But strike, when you know it will put 50,000 other employees out of work; EMPLOYEES who have DECIDED for THEMSELVES that it IS in"THEIR BEST INTEREST" TO "STAY" non-UNION" !!!!!!!!!!!!!!


NH/BB's

 

[MMB]

===========================================================
MMB,

I think your post should read,...

LMAO.
Yes NH, I know you like unions. Were you ever a shop steward? I was in the IAM at BeachCraft. The shop steward put me on probation for working through a break.

BTW, how did you make out with this last storm?
Too bad it didn't get a little farther north. The ski resorts could sure use a little more of the white stuff. My daughter asked to go skiing for Christmas. I called a couple places and was told, (are you ready?) "It is raining here, but we'll give you parkas and you'll have the slopes pretty much to yourself!" My son wants to go in a couple weeks for his birthday. Wonder how it will be then.

MB

 

[luv2fly]

BUT! Strike, when you know it will put 50,000 other employees out of work; employees who have decided for themselves that it is in THEIR best interest to try and stick it out, and you’re acting like a spoiled three-year-old throwing a tantrum because all of the lollypops are gone.
Want to act like a thug? Strike.

MB

And they could decide it is in their best interest to have a collective bargaining agreement as well. It is their choice not to do so, and as such, they are subject to any imposed working conditions by the company.
Your choice is whether or not to accept those imposed conditions. A collective group has the ability to try and influence those rules. Sometimes it is successful and sometimes it is not.
Striking is a legal provision normally governed under the RLA. The legality of a strike will be determined by a court, and if it determined that it is legal, a strike would be a lawful means of self help.
If you have a problem with that, then so be it. Perhaps you should lobby to change it.
Good luck with that.

Don’t like where the industry is going? Change carriers.
If everybody walks, oh well.
MB

Do you not see the irony of your statement?
Don't like where the industry is going?
If the industry is changing, what good would changing carriers do?
Your solution is to walk away. Mine is to try and do something about it, otherwise it continues to infect the rest of the industry.
Your argument is clearly anti-union. I'll be the first to admit their are inherent problems with collective bargaining, but right now, I see more of a need for unions than in recent years.

 

[Ch. 12]

Your solution is to walk away. Mine is to try and do something about it, otherwise it continues to infect the rest of the industry.
Your argument is clearly anti-union. I'll be the first to admit their are inherent problems with collective bargaining, but right now, I see more of a need for unions than in recent years.

Luv-

If the industry were going gangbusters, I might agree (though I'm still stuck on being somewhat "anti-what-unions-have-become...not-what-they-were-meant-to-be" myself)...but seeing that the industry is losing billions, I don't think that now is the time to pick the battle for building self-fortunes. I feel that executives should be taking cuts now (instead of payouts) and also feel that every other employee has to realize that they need to take cuts as well. Airfare is still declining on an inflation-adjusted dollar every year and supply and demand are all screwed up. To get all of that in order, jobs need to be cut. But the mentality is that we need to protect jobs and mgmt needs to go other places to cut costs. Then when wages come into play, mgmt needs to look other places. What is left? Aircraft which are the assets that make the most money. If we want to sell aircraft to make money as airlines (b/c hands are tied by threats of strike if cuts are sought in the obvious areas), why not just fold the airlines and become aircraft brokers. That seems to be the only way to make money if people are fighting so hard to maintain wages that the industry cannot support.

 

[luv2fly]

Luv-
That seems to be the only way to make money if people are fighting so hard to maintain wages that the industry cannot support.

I don't necessarily disagree with much of what you said. Airlines after all, are in the business to make money, although at times it seems they go out of their way not to.
I do, however, disagree with the statement above.
What the industry truly cannot continue to support is providing a product far below its manufacturing price.
Current fuel prices have driven yields lower and yet it seems that each week one airline will annouce a new round of fare wars which is subsequently matched almost gleefully by the others. That is what the industry cannot afford.
I love Airtran's advertising campaigns. Specifically their fuel trucks in ATL that ask, "if all the airlines pay for the same fuel, why do some charge more than others?"
Why does a package mailed via UPS or FedEx now cost more than it used to?
Does it cost you more to operate your personal vehicle?
Airline employees are being asked to subsidize a multitude of bad business decisions. That is what has gotten us here. Not labor. You know, people like to talk about the new reality of the airlines. It's not the way it used to be and we all know that to be true.
Pilots, mechanics, flight attendants, etc. have all had to accept the "new reality" of the industry, but ponder this. Isn't it possible that we have now reached a point where labor has had enough? Once again, this is usaully where anti-labor proponents jump in with the "just leave" argument. Well, lets say for a moment, we all did. What then? Would DL simply close its doors or would it be forced to deal with what all of us have already learned? The new reality, that someone isn't going to spend years of training and personal sacrifice to do a job that pays no dividend.

 

[Ch. 12]

I don't necessarily disagree with much of what you said. Airlines after all, are in the business to make money, although at times it seems they go out of their way not to.
I do, however, disagree with the statement above.
What the industry truly cannot continue to support is providing a product far below its manufacturing price.
Current fuel prices have driven yields lower and yet it seems that each week one airline will annouce a new round of fare wars. That is what the industry cannot afford.
I love Airtran's advertising campaigns. Specifically their fuel trucks in ATL that ask, "if all the airlines pay for the same fuel, why do some charge more than others?"
Why does a package mailed via UPS or FedEx now cost more?
Does it cost you more to operate your personal vehicle?
Airline employees are being asked to subsidize a multitude of bad business decisions. That is what has gotten us here. Not labor.

Yet another over-simplyfied view of airfares. I am running out of breath by constantly having to re-tell the story of economics and elasticity of demand. Raise gas prices by 80% and lose 10% of your business. Raise airfares by 10% and lose 80% of your business. I am not talking if just one carrier does it...I mean if ALL carriers do it. People will just not fly. Part of that is capacity...there is way too much...and part is the highly inelastic nature of airline tix. No back to the capacity issue. You blame it on mgmt decisions but whose mgmt do you think is at fault? DL? AA? UA? No...it is those like FL, B6, and WN that continue to balloon an already overly served market. When WN expands on your peak routes, is it a wise business decision for DL to decrease service by the same % just to maintain a capacity status quo? Insert any LCC into WN's spot and any legacy into DL's spot and it is the same story. No...DL did not choose to have "over capacity" in the industry but we have no real barriers to entry into either the industry or into markets. So please don't blame DL mgmt for fare or capacity issues. Stupid retention bonuses that don't retain but still pay out billions? Yeah...blame EVERY legacy for those...but don't blame the things that are not the fault of these carriers.

I find it humorous that you mention FL's ads b/c they are insinuating that every carrier should be charging less (as if they are the saving grace). It is that kind of mentality that is further dumping this industry. So you like the ads of those who purpotrate the low fares but you don't like the resulting low cost battle?? That is the reality we are in.

 

[luv2fly]

People will just not fly. Part of that is capacity...there is way too much...and part is the highly inelastic nature of airline tix.

BS. There are of course markets that will be more subject to price elasticity than others. Leisure markets for example. You cannot make a blanket statement that raising ticket prices 10% will result in a 80% reduction your business. Talk about oversimplified.

You blame it on mgmt decisions but whose mgmt do you think is at fault? DL? AA? UA? No...DL did not choose to have "over capacity" in the industry but we have no real barriers to entry into either the industry or into markets.
Yes I do, and I blame it on all of them. DL did choose to contribute to the over capactiy. Not only did it do that, it did it with a glut of regional jets with CASM's approaching 20 cents. Now we have surplus of nice little corporate jets being sent to the desert with no market for them.

I find it humorous that you mention FL's ads b/c they are insinuating that every carrier should be charging less (as if they are the saving grace).
I am glad you find it humorous. I call it effective advertising. Perhaps our management team should paint "Selling our hedges seemed like a good idea at the time" on the side of ours.

 

[Ch. 12]

(Luv2Fly)BS. There are of course markets that will be more subject to price elasticity than others. Leisure markets for example. You cannot make a blanket statement that raising ticket prices 10% will result in a 80% reduction your business. Talk about oversimplified.

I merely oversimplified the percentages to prove a point. You oversimplified the profitability issue by saying that carriers simply need to raise fares. My point is the market will not follow. ALL markets are highly elastic though yes...some are more so than others. There is no conspiracy as to why fares are low. Pax simply won't pay higher fares.

Yes I do, and I blame it on all of them. DL did choose to contribute to the over capactiy. Not only did it do that, it did it with a glut of regional jets with CASM's approaching 20 cents. Now we have surplus of nice little corporate jets being sent to the desert with no market for them.

Now here is where emotion gets the best of you. Yes...mainline jobs are going being replaced by RJs and I am not an advocate for that. But DL's RJs are not expansion...they put them in in place of larger mainline jets. What do you think adds to the overcapacity problem more? DL replacing 3 MD80's on ATL-OMA with 4 CRJs or B6 adding 77 A320's (with 233 to come) and hundreds of 190's where they (B6) had never flown at all before? Sure...EVERY airline should reduce capacity but that is the result of us having many new entrants who add millions of seat miles a year. Why do all of the other carriers have to retreat just to make room for LCC expansion? Perhaps this is where a partial re-regulation of the industry might be needed. Would it really be all that bad to have some controls on capacity out there? But don't blame your employer just b/c you are upset with them.

I am glad you find it humorous. I call it effective advertising. Perhaps our management team should paint "Selling our hedges seemed like a good idea at the time" on the side of ours.

That makes no sense. First...hedges are not a sure thing and WN actually loses $$ when fuel is priced low. Hindsight makes a wonderful armchair CEO but doesn't help deal with the unknowns in the future. Yes...I do think your take on FL's advertising is humorous b/c in one sentence you say that the carriers should be raising fares (which is really not that easy...there is no conspiracy, honest) but then you praise the fact that FL advertises that all carriers should be reducing fares and that they are sticking it to the pax by charging the current rates. Which is it.


Finally...I have asked before but never recall getting a reply...why is your handle "LUV" if you are not with WN? Just curious.

 

[luv2fly]

But DL's RJs are not expansion...they put them in in place of larger mainline jets.

Leo was a proponent of frequency. That frequency added seats. Increased frequency yielded more seats and increased capacity. Yes, in many markets we did subsitute equipment. Sometimes it was replacement, sometimes it was enhancement. We contributed to the flooding of the market in order to preserve market share.

That makes no sense. First...hedges are not a sure thing and WN actually loses $$ when fuel is priced low. Hindsight makes a wonderful armchair CEO but doesn't help deal with the unknowns in the future.

Hindsight would reveal that over the past ten years or so most of these CEO's and their management teams have failed miserably, and yet the ones who consistenly pay the price are the employees. Your assertion makes me believe you view their history as if they have been some type of innocent bystander. There has never been a better argument for performance based pay.
As far as WN, it appears to me that they have dealt with their unknown's quite well. I suppose you will now just tell me they have been lucky for the last 25 years.

Finally...I have asked before but never recall getting a reply...why is your handle "LUV" if you are not with WN? Just curious.

I don't recall you ever asking. My apologies for not answering. My handle goes back a good ways to an old site of HH's called plane business. It was prior to me coming to DL and I just kept it. Might I ask the same?

 

[Ch. 12]

Leo was a proponent of frequency. That frequency added seats. Increased frequency yielded more seats and increased capacity. Yes, in many markets we did subsitute equipment. Sometimes it was replacement, sometimes it was enhancement. We contributed to the flooding of the market in order to preserve market share.

Well the answer is in your remarks...DL and other legacies had the option to either maintain a presence or give it away to new, unhindered competition. Again...should DL scale down just to make more room for new carriers? I still think that the industry needs some sort of regulation as far as new entrants go. Virgin America shouldn't even be considered by the gov't right now but it will get its certification and add to the market flooding soon. What is wrong with that picture? There is a time when the gov't must focus less on protecting the consumer (who is REALLY winning by getting ultra-cheap, inflation-proof fares to anywhere) and more on protecting the carriers that are necessary for there to even be an airline seat consumer in the first place.

Hindsight would reveal that over the past ten years or so most of these CEO's and their management teams have failed miserably, and yet the ones who consistenly pay the price are the employees. Your assertion makes me believe you view their history as if they have been some type of innocent bystander. There has never been a better argument for performance based pay.

Nope...my assertion is meant to in no way portray airline execs as being innocent bystanders. They (Leo) have made truly bad decisions but to praise a tactic like hedges after the absurd upswing in oil prices (NOBODY could have predicted them to rise THAT high) is the arm-chair CEO I mention. Many complex factors are involved in the industry decline with the basic one being Income Statement 101. RASM has been flat or on the decline for years b/c of a flooding of capacity (new entrants) and an unwillingness of the public to spend more on airfare today than they did 30 years ago. At the same time, CASM has increased significantly due to increasing wages and debt loads. Debt is mgmt's fault (to oversimplify) and wages are labor's fault (to oversimplify). Regardless of whose fault it is, though, no industry can survive flat unit revenues on increasing unit costs for multiple decades.

As far as WN, it appears to me that they have dealt with their unknown's quite well. I suppose you will now just tell me they have been lucky for the last 25 years.

Nope. I've been an advocate for WN and how they have used hedges. But like I said, they do make less revenue when the oil price is not sky-high. The great thing with the hedges, though, is that they know what their maximum loss will be even if fuel goes to $1. They mitigate risk and that is wise. But yes...they did get lucky with the hedges during a period when fuel went so high. To be locked in at a rate that is somewhere near half of the market rate is pretty damn lucky. Not even the best economists could have predicted natural disasters and oil industry greed to the level that it occurred in 2005. WN's story is far different from what DL and the others are going through b/c they have a much smaller workforce doing much more work on somewhat more pay. IOW, their unit cost for labor is lower. On the other hand, they have generated a generous cash flow that has kept them away from the debt issues plagueing the rest of the industry. OTOH, they are much of the reason for today's glut of capacity b/c they continue to expand aggressively in a time when that just doesn't make sense. I love WN as a business model but from an industry perspective, they just are detrimental right now.

I don't recall you ever asking. My apologies for not answering. My handle goes back a good ways to an old site of HH's called plane business. It was prior to me coming to DL and I just kept it. Might I ask the same?

Thanks. I do remember Holly's site from the days that it was free. Seeing as I have to keep my own costs down (as a fellow DLer, you understand) I quit going there once it cost $$. Mine stems from being Kind of bankruptcies (they seem to follow me). "Ch. 12" is for "Chapter 12" or what follows Ch. 11. Many mistake it for Channel 12 but it is Chapter 12!

Thanks for a decent "discussion" here. It's refreshing after reading many other threads that don't go so intelligently. Best of luck @ DL!

 

[QA4Jet-A]

Wow, That was some interesting reading. I thank both of you for your thoughts and insight. I will admit, I work for the Airline that has the funny slogans on the Fuel truck in ATL. There is one point I did find interesting though and that had to do with LCC's adding capacity to routes. My question would be then, Why is DL adding additional service to ATL/BMI? Especially with an RJ Fleet?
Just a thought... Your usual professional responses are welcome, Thanks. B)

 

[NewHampshire Black Bears]

This is a (somewhat) "shocking" example, but here goes;

I think this "example" goes DIRECTLY to the Pilots of DL/NW, and the NW F/A's.

If a person has been diagnosed with a Dangerous Cancer, which left untreated, will produce his demise in 6 months, What to do ??

A. Have surgery that will give him a 50/50 chance of survival(from both the disease AND the surgery),

Or

B. Do nothing, with gaurenteed results, 6 months later ??

IMHO, Breaking VALID union contracts is the same as a DANGEROUS DIAGNOSIS !!!!!!!!

Again, (in my opinion,) saying to DL/NW management, "We will do Vitually ANYTHING, to keep DL/NW afloat, INCLUDING LARGE layoffs,
BUT
We WILL NOT work without our VALID contract, PLAIN and SIMPLE !!!


NH/BB's

 

[B.O.B.]

It seems Delta is dumping more aircraft. I can't believe they're dumping their favorite Pond Flyer, the 767-300er.

4 767's going buh-bye!

 

[Ch. 12]

Wow, That was some interesting reading. I thank both of you for your thoughts and insight. I will admit, I work for the Airline that has the funny slogans on the Fuel truck in ATL. There is one point I did find interesting though and that had to do with LCC's adding capacity to routes. My question would be then, Why is DL adding additional service to ATL/BMI? Especially with an RJ Fleet?
Just a thought... Your usual professional responses are welcome, Thanks. B)

Thanks for asking. When I mention adding or reducing capacity, I mean on a network level. There will obviously be some areas that see a few more seats from DL but in the end, they are reducing overall capacity (which is obviuos by all of the equipment that they are giving up and the major scaling back at CVG). On the other hand, there will obviously be some areas where WN/B6/FL reduce capacity but on the whole, they are greatly increasing it.

 

[FWAAA]

It seems Delta is dumping more aircraft. I can't believe they're dumping their favorite Pond Flyer, the 767-300er.

4 767's going buh-bye!

Nope. I hear that they are non-ERs. Very sensible move. Has no impact on DL's international expansion - just means fewer 763s used domestically. Probably fewer ATL-MCO 767s, that's all.