How To Survive

BoeingBoy

Veteran
Nov 9, 2003
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Many of you may have read some or all of the Unisys Transportation Management Consulting "Scorecards" that I have referenced in other posts. They are generally good at pointing out problems, but (as someone pointed out) give few solutions. That may be a little of the "If you want our solutions, they hire us." attitude or it may be because solutions are complex and what is required for one carrier may not be what is required for another.

Having said that, I think that the following quote from Scorecard 11 fits our situation. As usual, it doesn't give a recipe for success, but I think it does summerize why we haven't "turned the corner" yet.

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"No breakthrough in any given area is enough or, put another way, there is no magic bullet that will bring legacy carrier costs into balance with those of the new-generation airlines."

"It isn’t hopeless by any means, but it isn’t easy. The action required is more than just an all-out attack on every cost; it is a complete strategic restructuring of how each company does business."
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We have not yet had a plan for the complete strategic restructuring of how we do business. Maybe the forthcoming "plan" will lay this out.

The floor is now open for debate.....

Jim
 
Well, I told you a couple of weeks ago what USAir ought to do....maybe Siegel read my post and will incorporate bunches of it into the new "plan". Somehow I doubt it.

I am not a WN employee and I have no dog in this fight, per se. If I had money to bet I would bet on PHL looking a lot like BWI in 5 or 6 years, maybe 10. Still, that is not inevitable.

I read some of the other posts along this lines about how "I will not nonrev on WN, I will not be friendly to them...they are coming to take my job." Being sullen and nasty is not the way to win. Braniff tried that. It lost them a lot of public sympathy and affection in their hometown, Dallas. Besides, I don't think they are after anyone's job at U. What they are coming for is to provided lower cost, high quality air transportation to a great big underserved overpriced chunk of America. It's not the fault of WN employees nor their management that U's managers, past and present, have been too smart to accept the truth.

At this juncture I tend to agree with a lot of the U employees who post in that they have given up enough in wage concessions.

So, if you don't take more away from employees in the form of wages, how do you compete effectively with WN?

The first step is to quit drinking the "they offer a sorry travel experience and only poor trashy people will fly with them" KoolAid.

I think that is what got Wolf et al into trouble in BWI and maybe even before that out on the West Coast. The real truth is WN offers a really good product and even if you matched their price penny for penny...they are going to carry some people who like the way they do business. I was in line behind someone at the store the other day (WalMart, if you must know) and the guy in front of me whipped out a Southwest Airlines Visa to pay for his purchase. I said..."Oh, you must be a Rapid Rewards member too....gone anyplace lately?" which got him to going on and on about how Southwest was the most wonderful airline in existence and he and his family were going to Washington State for the holidays on RR tickets. The lesson you have to take away is that saying Southwest is bad does not make it so. They fly modern Boeing jets. There are 6 seats across in Y. Your planes are just the same. Their coach cabin probably offers a little more legroom. You have assigned seats. They don't. That's not as big a deal as airline management would like people to believe. On short flights they always seem to manage a beverage service. Your folks don't. They offer a lot of nonstops from hublets to other hublets.....to go anywhere on U I might have to either be O&D in CLT, PHL, or PIT or change at one of the above. Their complaint ration with the DOT is stellar, and not just because their passengers expect less. They do a very good job on the basics, and their customer service people do a very good job of soothing aggravated passengers.

That hasn't told you how to take them on, but I'm getting there. Step One, then, is acceptance. They offer a really good product at a good price. If you can't accept that, you really are in trouble.

So, then, the answer is how do you contend with them? You have two choices....either offer the same product at a better price or offer a better product at the same price.

USAirways' costs prohibit option 1, there is no way on Earth to get your costs down to what their's are. None. Nada. So we have to look at option 2.

What can USAirways do to make their product better than Southwest's? This is where your management needs to quit thinking like management and start thinking like a passenger. So far, they have demonstrated a real inability to do this.

If I am a passenger....what do I want when I travel? Safety and reliability go without saying....but then for all airlines certificated to fly in the US and operating under the aegis of the FAA...safety being equal can be presumed. That's a wash.

Price and flexibility. We, the passengers of this world who cough up our money to pay for airplane tickets.....don't want to get hosed. If I buy a ticket on Southwest.....an el cheapo advance purchase ticket....and my wife gets sick or grandma breakes her hip and I have to cancel on real short notice....I don't need to fork over $100 "change fee" or worse yet, lose the entire value of my ticket. It's okay not to give me my money back.....I knew it was nonrefundable. But you ought to give me the full face value of my ticket towards any other travel for up to a year. Fair is fair is fare. Pun intended. If I find out that a sister in law is in a coma, and I need to fly 500 miles to provide some moral support to the family (or worse yet attend a funeral), the last minute trip should not cost me $1000. You guys could really learn something from the way Southwest prices their product. The spread between cheap seats and full fare just isn't all that much. Granted, I would much rather have the cheap seat....but I will suck it up and buy a full fare ticket when I want to get somewhere. In my case, it's 600 miles over to Dallas. About 9 hrs in the car. The advance purchase seats range from $60 to $85 each way. If I find ot Wednesday that I have Fri-Sat-Sun-Mon off, then going for the full fare of $141 isn't the end of the world. How much does U charge on 600 mile flights for a walk up fare? For that matter, what do you guys get for a 250 mile flight on a walk up basis?

Yes, U needs to cut costs some more. RJs aren't the answer, all they really do is allow you to lose less per planeload. The ASM cost on those rascals is actually higher. Plus they are no competition (in terms of comfort) for the 737. Cutting employee wages isn't the answer. I think I would start cleaning house at the corporate offices....my bet is you have far too many Asst VPs and VPs and people who do nothing to actually conduct the business of the airline (bust bags, pour drinks, sell tickets, answer the phones at res). The savings there might be minimal, but it would certainly send out a message that management is serious about saving the company instead of making a buck or two running it into the ground.

All this interlining and "we need to sell tickets on Expedia and Orbitz" and Galaxy TwoWorld alliance code share crap ought to stop. That stuff doesn't really do anything for your bottom line. It allows your management to puff its chest out and think its a bigtime worldwide carrier. To succeed, you need to do things that accrue to the bottom line. Sell your tickets yourself.......have a good enough product at a good enough price to where you dont need Orbitz selling them for you and skimming some of the money. You need passengers to fly U because they want to fly U....not because they thought they were getting on United.

USAirways can only handle quality control within USAirways. Thus when you code share, you are responsible for someone else's screwups. You guys don't need that much fun. Sink or swim under your own banner. Figure out who USAirways wants to be, then become that carrier.

Focus on capitalizing on USAirways' strengths...those that haven;t been frittered away already. You have a really healthy network of feed in 3 solid markets on the East Coast. You have a position in some really stout markets that WN cannot or will not touch...DCA, LGA, BOS. Look at those markets, figure out where you can go from there to carry the most folks, price your product sensibly, and let the money flow in.

You cannot be all things to all people. To continue to try and do so is foolish. USAirways is not apt to become a global powerhouse carrier nor will it reinvent itself as a LCC. It's still possible, though, to find a definite niche, jump in it, and survive. Good Luck.
 
ELP_WN_Psgr,

As a U employee (pilot) I applaud you for a very constructive and well thought out post. Offering alternatives is a refreshing ray of sunlight here.

I agree with you, we must realize and accept, not just Southwest (that they do have a good product-different but still good in pax eyes), and its place in the industry as a reality, but also our place and the current climate (economic and industry sector) as well.

We have to do what we do, and excel in our own way. Other legacy carriers do it, we can too. The public does not care about 99.99999% of the issues that are whined about on these boards. They just care about affordable, quality airline service.

We will compete on or cost basis, offering a product customers want (read-excel in what we do), or we will disappear. No one really cares out there, which path we take; the void will be filled if we go away, like vultures swooping in on road kill.

Once again, great post!