Is This A Reason That Uair Is Losing Money?

[avek00]

While US' costs are too high, the unions are by no means "sucking the company dry". The bottom line is that US' employees are collectively too senior to work at a cost structure competitive to the likes of B6 and WN. The wage scales aren't out of line with the industry, but the seniority mix of the company is, meaning that US' costs will be higher because a large portion of the workforce will automatically top out under any reasonable compensation plan.

The two means to reduce US' per-unit labor costs down to acceptable levels are 1) growing the airline, or 2) merging the airline with a less-senior workforce. W&G realized this during the 1990s, and tried hard to merge US with another airline, and of course nearly succeeded with the sale to United. Siegel and Lakefield made/are making efforts to try to grow the airline somewhat, albeit with smaller jet equipment. While I believe that it is too late to salvage US as a viable standalone entity for the long haul, I do believe that a modest growth plan can keep the company's head above water long enough for a merger or sale to take place by decade's end.

 

[sfb]

Well, that hypothetical auction is sort of what Priceline does, but I think that sort of system wold be extremely complicated for selling every single seat on the airplane. You'd have to decide how much inventory to make available each week for each flight, come up with reserve prices (and probably a guaranteed buy price), etc. And folks would still be able to play the system, since you'd still be getting that discounted seat for $1 or $5 more than the next-highest bidder if it's done eBay-style.

PineyBob is absolutely correct when he says, "SWA sells a higher percentage of full fare tickets than any legacy carrier. [T]hat's partly because on SWA full fare is never more than $299 each way. And that is there [sic] secret to success." If you listen to LUV analyst calls/presentations, you'd hear that they sell roughly 35-40% of their tickets at full fare. Moreover, they intentionally structure their fares and availability to disfavor connecting itineraries, since it is far more profitable for them to carry non-stop passengers. I don't see that as being anything more than smart business, and it's certainly far more intelligent than the pricing policies which have led to the network-airlines-prohibited practices like hidden-city ticketing. People like WN's pricing because you don't have what I call the "oh my God" factor in the pricing (as in what you say when you see the "Y" class price). A lot of folks are willing to pay $50 or $100 each way more for the flexibility of a refundable ticket!

I'm not exactly sure how they managed to price a ticket on WN from "Rochester" unless they really meant Buffalo. But I was able to find a trip "later this month" from BUF-FLL round-trip for $228.40 on WN. And they neglect to mention that the $400 ticket on WN is the fully-refundable walk-up fare. In any market, the amount you pay for a flight will vary based on how flexible your travel plans are. And if you're a business traveler, that refundable $400 fare is an excellent value. US's unrestricted "B" fare on the route (the one thatr BBB wishes people would buy) is over $1,300 round-trip.

I'm not sure I'd say there's a "myth of cheap fares" on Southwest. I'd say that thinking that Southwest is always cheapest is incorrect, just as Wal-Mart isn't always cheapest, either. But Southwest's fares are always reasonable, and they're always generally low (but not the lowest). It's pretty unlikely that you will walk away feeling cheated because you paid too much.

One thing about the way Southwest does business without interlining -- in general, it has been my observation that they bust their humps to operate as many flights as they can (when possible) to get people to their destinations without stranding them. Obviously, if the weather makes it impossible (i.e. let's say PVD is closed), you're going to strand people, but the same would happen to US. People get stranded when they misconnect and miss the last flight of the night at any airline's hub. On Southwest, you might be delayed but it's very likely you'll get to where you're going (especially since they'll need the plane to be there anyway). It's my understanding that many/most of their cancellations happen on routes where they have lots of flights, so it's relatively easy to just rebook someone on a later flight. I also imagine that they'd get a lot more complaints than they currently do if they were stranding a significant number of their passengers on a daily basis...

 

[Phantom Fixer]

The Truth:

UAir's friggen costs are too high, and the unions are sucking the company dry..

U's costs are too high due in part to the short-sighted leadership it's always been hamstrung with.

The leadership comes and goes......and it always departs with its pockets full. Just how does this come to roost on the unions doorstep?

U's labor unions are not reponsible for the retrograde attitude that leader after leader can't seem to break away from.

U's labor force is not responsible for U leaving the west coast to WN , where PSA once flurished....it is also not responsible for leaving the Florida market open to whomever wanted to come play? , where Piedmont had flurished.

Anyone that lays the ills of U's situation on the labor groups? is either daft , grossly mis-informed or just another stooge from upper management trying to continue to soften up the hostages of thier continued short sightedness an stupidity.

Which catagory best discribes your position in this? :down: